TC Energy pulls the plug on Keystone XL: Update

Adds reaction from Alberta, Sierra Club, other details

TC Energy officially cancelled its 830,000 b/d Keystone XL crude pipeline project today, after US president Joe Biden rescinded a key cross-border permit earlier this year.

The company made the decision after a comprehensive review of its options and in consultation with its partner, the government of Alberta, Canada, TC Energy said today.

The cancellation is a victory for environmental groups which have fought the project for more than a decade.

TC Energy suspended construction on the $8bn Keystone XL earlier this year and took a $1.8bn (C$2.2bn) after-tax impairment in the first quarter related to the project.

"The company will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project," TC Energy said.

The company installed about 90 miles (145km) of Keystone XL pipe in Canada in 2020 but none in the US except for a 1.2-mile border crossing.

The company said earlier this year that it was assessing options on its Keystone XL assets including selling the steel purchased for the line.

Chief executive François Poirier today thanked all those involved in the project including the government of Alberta, local communities, indigenous groups who purchased a stake in Keystone XL, shippers, labor groups who signed deals to work on construction, and others.

Through the Keystone XL project, TC Energy developed "meaningful Indigenous equity opportunities" and a plan to operate the pipeline with net-zero emissions throughout its lifecycle, he said. "We will continue to identify opportunities to apply this level of ingenuity across our business going forward."

The government of Alberta has reached an agreement with TC Energy for an orderly exit from the project and partnership. The two parties will continue to explore all options to recoup the government's $1.1bn investment, Alberta said.

"We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancellation of the presidential permit for the pipeline's border crossing," said Alberta premier Jason Kenney. Alberta will continue to play an important role in a reliable, affordable North American energy system, he said.

Environmental groups and some Indigenous groups who fought the project for years praised the end of Keystone XL as a vindication of their efforts.

"This is a major victory for our movement, and it won't be the last," said Sierra Club executive director Michael Brune.

"For 13 years, an international movement of frontline communities in the US and Canada, Indigenous leaders, and environmentalists fought back against this terrible proposed project at every turn. Today, we can say...that our efforts were a resounding success," he said.

Biden rescinded the cross-border permit within hours of taking office in January to fulfill a campaign promise, saying that the project is not in the US national interest because the US and the world "face a climate crisis."

Keystone XL galvanized environmental organizations who joined forces with Indigenous groups to oppose more pathways for crude because of climate change concerns and worries over possible spills. The high-profile Keystone XL opposition foreshadowed other anti-pipeline movements including efforts to stop Energy Transfer's 570,000 b/d Dakota Access pipeline (DAPL). Another large cross border crude pipeline project — Enbridge's 760,000 b/d Line 3 expansion — is facing protests this week in northern Minnesota.

TC Energy proposed Keystone XL more than a decade ago to offer another option to move western Canadian crude to the US. The line would have moved crude from Hardisty, Alberta, to Steele City, Nebraska, where it would have connected with other TC Energy pipelines to Cushing, Oklahoma, and the southeast Texas coast.

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 former president Donald Trump's administration.

The project was delayed again last year when a US district court vacated a key water permit.

By Eunice Bridges