Keystone XL legal challenge won't help Alberta, experts say
CALGARY -- A group of attorneys general from 21 U.S. states have sued President Joe Biden over his decision to rescind the permit for the Keystone XL pipeline, but experts say it's not the news Alberta is hoping for.
The coalition, led primarily by attorneys general from Texas and Montana seeks to undo the president’s attempt to effectively cancel the $8 billion project aimed at transporting 800,000 barrels of bitumen each day from Hardisty, Alta. to Steele City, Neb.
In his filed complaint to congress, Texas Attorney General Ken Paxton accused Biden of acting “with complete disregard for the constitutional limits on his power.”
The complaint goes on to say the president “lacks the power to enact his ambitious plan to reshape the economy in defiance of Congress’ unwillingness to do so.”
Construction along the 2,735 kilometre (1,700-mile) route has since been suspended by Calgary-based TC Energy Corporation, which had plans to make the pipeline a part of a larger system of lines that would run through several U.S. states.
Biden’s executive order to cancel the Keystone XL project is an attempt to focus more on the environment and address climate change while creating greener jobs.
However, his order has since left thousands of workers unemployed, including an estimated 1,000 laid-off employees at TC Energy.
KENNEY: ‘THIS IS VERY ENCOURAGING’
Alberta Premier Jason Kenney thanked the 21 U.S. states who are challenging what he called a "rash" decision made by the Biden administration.
At a Thursday press conference, Kenney noted that the province has been in ongoing discussions with several states governors and attorney generals’, most notably Texas and Montana.
“We’ve been in touch with officials in Texas and other U.S. states and we’ve been encouraging their efforts,” Kenney said.
This is their own initiative and I appreciate knowing you have nearly half the American state governments who are standing up for their citizens, for jobs, for energy security, and also for the Canada-US relationship.”
Kenney was unable to comment on the prospects of the success when it comes to legal efforts south of the border, but is continuing to retain legal counsel and talk with TC Energy on best steps forward.
For now, the premier believes Alberta has a strong cases to make under the investor protection provisions of Section 11 in the North American Free Trade (NAFTA) agreement, which have since been grandfathered in and brought forward in the new Unites States Mexico Canada (USMCA) agreements.
Speaking on Section 11, Kenney cites that if a government approves something and an investment is made on that basis, then government cannot go back retroactively and change the rules.
“If it does, then it owes compensation to the investor,” Kenney said. “That’s a pretty basic principle of international trade law and it’s one that I think we have a very high prospect of success with.”
Alberta's investment in the Keystone pipeline included $1.5 billion in equity investment and a $6 billion loan guarantee in 2021.
The province has six months to file under section 11 and says it will be doing its legal due diligence.
A 'PURELY POLITICAL' MOVE
Mount Royal University political science professor Keith Brownsey told CTV News on Thursday that investor confidence in the U.S. for Canadian firms in the fossil fuel industry is generally low given the Democrats hopes of reaching certain climate goals and lowering greenhouse gas emissions.
At the same time, Brownsey called Paxton’s move to sue Biden ‘purely political’ given the fact that some of the 21 states involved in his complaint to Congress are not affected at all by the Keystone XL pipeline.
“That’s pretty rich coming from a Republican and we’ve just come off four years of Donald Trump, so while I take the complaint seriously, I don’t take the motives of this particularly seriously,” he said.
Brownsey went on to say that the Keystone XL pipeline won’t get built anytime soon. He noted that Alberta has no political standing and only the option to lobby Congress.
“There is hope, but not for us,” Brownsey said. “There is a chance the pipeline could be built in five years, but that time frame is further down the road than any corporation could tolerate.
“Both sides will battle this out in the courts and one side may win a few battles here and there, but it’s simply going to delay and stall the Keystone XL to the point where it is not viable.”