Shares in Keystone XL (KXL) owner TC Energy fell after reports Biden will cancel a permit for the long-delayed pipeline over concerns about fossil fuels contributing to climate change, which would be a blow to the Canadian energy sector.
Kenney urged Trudeau to reach out to the incoming Biden administration in the next 48 hours to reaffirm the importance of the bilateral relationship. Biden is slated to take the oath of office on Wednesday.
“This is the 11th hour and if this really is the top priority, as it should be, then we need the government of Canada to stand up for Canadian workers, for Canadian jobs, for the Canadian-U.S. relationship, right now,” Kenney told a news conference.
Trudeau’s government has previously urged the president-elect not to halt construction. Natural Resources Minister Seamus O’Regan said in a statement on Monday that Canada would continue to push for KXL with the Biden administration.
Kenney said Canada would have a strong case to seek damages from the United States under their free trade agreement if Biden revokes the pipeline permit. Alberta’s financial exposure is just over C$1 billion ($783 million), Kenney said, after the province invested in KXL last year.
“All we ask at this point is that President-elect Biden show Canada the respect to sit down and hear our case,” Kenney said.
KXL is intended to carry 830,000 barrels per day of oil sands crude from Alberta to Nebraska but has run into fierce opposition from U.S. landowners, Native American tribes and environmentalists. Outgoing Republican President Donald Trump had supported the project.
KXL owner TC Energy said in a statement that the pipeline squares with Biden’s vision of a cleaner energy future that creates jobs. TC promised on Sunday that KXL would run fully on renewable power by 2030.
Dennis McConaghy, a former TC executive, said canceling the KXL permit would be an easy way for Biden to win environmental plaudits.
“There are so many policies where he is not going to be able to give supporters what they want – so screwing Canada becomes relatively easy to do,” McConaghy said.
RBC Capital Markets analysts said investors would watch closely to see whether TC Energy abandons the project altogether or reapplies for permits.
KXL was first proposed 12 years ago, when it appeared that oil sands would rapidly outgrow export pipeline capacity.
Two other export pipeline projects, the Canadian government-owned Trans Mountain Expansion and Enbridge Inc Line 3 replacement, are proceeding, however, reducing the need for KXL.
U.S. Gulf refiners have turned increasingly to Canada in the past year, with output dropping off in Venezuela, another heavy oil-producing nation.
TC Energy was trading down 4.6% at C$53.99 in Toronto. 29dk2902l