Biden to rescind Keystone XL permit: Update 2

Adds Jason Kenney comment starting in 13th parargraph.

President Joe Biden will rescinda cross-border permit for TC Energy's 830,000 b/d Keystone XL crude pipeline today, possibly marking the end of the road for the long-delayed project.

TC Energy said it is suspending the project in light of Biden's action.

Biden was expected to revoke the Keystone XL presidential permit within hours of taking the oath of office today, one of several planned executive ordersto reverse policies from president Donald Trump.

Biden and Vice President Kamala Harris were officially sworn in at a ceremony at the US Capitol.

TC Energy said it will review the Keystone XL permit decision, assess its implications, and consider options. "However, as a result of the expected revocation of the presidential permit, advancement of the project will be suspended," the company said.

The $8bn pipeline began construction last year and was not expected to be placed into service until 2023. TC Energy proposed the project more than a decade ago to offer another option to move western Canadian crude to the US. The line would move crude from Hardisty, Alberta, to Steele City, Nebraska, where it would connect with other TC Energy pipelines to Cushing, Oklahoma, and the southeast Texas coast.

Blocking Keystone XL has been a major goal of environmentalists as a symbolic measure and because halting the pipeline would increase the cost of developing oil sands that have relatively high carbon-intensity.

"A decade of fighting in the cornfields, dirt roads and halls of Congress led us to this moment where an unlikely alliance of faces and voices were heard by President Biden," said Jane Kleeb, founder of citizen group Bold Nebraska, one of the main groups opposing the project. She also said opponents are "filled with hope" that the rejection of Keystone XL is the first of many projects that will be cancelled and replaced with a clean energy plan.

TC Energy said Biden's decision to revoke the Keystone XL permit "would overturn an unprecedented, comprehensive regulatory process that lasted more than a decade and repeatedly concluded the pipeline would transport much needed energy in an environmentally responsible way while enhancing North American energy security."

TC Energy had taken steps that it hoped would make it legally and politically harder to block the project. The company last year completed a short border-crossing section that is covered by the presidential permit. It also signed contracts with unionized pipeline contractors in the US and finalized an agreement to allow indigenous groups to buy up to $763mn (C$1bn) in equity in Keystone XL. The company on 17 January also announced the pipeline would have its operations powered entirely by renewable energy by 2030.

Rescinding the presidential permit for Keystone XL could frustrate efforts to repair US relations with Canada, whose prime minister Justin Trudeau supports the project.

Alberta premier Jason Kenney said he is "deeply disturbed" at Biden's decision and called it "a direct attack" on the largest sector of the Canadian economy.

"This is a gut punch for the Canadian and the Alberta economies," he said today. The Biden transition team did not give Canada the opportunity to make the case for the project, he said. "That's not good faith. That's not how you treat a friend and an ally."

Kenney said the US should open the door to a constructive dialogue on how to move Keystone XL forward. Otherwise, the province would resort to legal action, and Canada should impose meaningful trade and economic sanctions, he said.

Alberta invested $1.1bn in the pipeline last year.

Oil industry groups say the pipeline has been subject to exhaustive environmental reviews and should be completed.

The project was first proposed in 2008, but it has been delayed repeatedly. Former US president Barack Obama in 2015 blocked Keystone XL after years of review, citing environmental concerns. The project was revived in 2017, with a cross-border permit from the Trump administration.

By Eunice Bridges