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Keystone XL pipeline developer pulls plug on controversial project

The move comes just months after President Biden revoked a Trump-era approval

The firm behind the $9 billion oil pipeline officially scrapped the project on June 9, more than a decade after political wrangling over its fate began. (Video: Reuters)

The firm behind the Keystone XL pipeline officially scrapped the project on Wednesday, months after President Biden revoked a cross-border permit for the controversial pipeline and more than a decade after political wrangling over its fate began.

The pipeline, which would have stretched from Alberta’s boreal forests to the refineries along the U.S. Gulf Coast, became the center of a broader controversy over climate change, pipeline safety, eminent domain and jobs. Those same concerns have spawned similar battles to stop pipelines in states including Montana, Minnesota and Virginia, part of an effort to keep fossil fuels in the ground.

The Keystone XL project also took on special significance because of the sea change in public and business attitudes toward climate change. The process of extracting bitumen-like oil from the thick tar sands consumes enormous amounts of energy — a combination of strip mining and underground steam injection — and exacerbates the impact on the planet’s atmosphere.

TC Energy said in a statement that it decided along with the government of Alberta to end the multibillion-dollar pipeline.

Activists who have spent more than a decade hoping to bury the project for good reacted with joy at the news Wednesday.

“When this fight began, people thought Big Oil couldn’t be beat,” said Bill McKibben, who led sit-ins against Keystone XL in 2011 at the White House. “But when enough people rise up we’re stronger even than the richest fossil fuel companies.”

Activists arrested at White House protesting Keystone pipeline

Republicans and oil and gas industry officials decried the news, hammering Biden for putting the nail in the pipeline’s coffin. They argue that the project would have provided thousands of construction jobs. However, with most of the pipeline construction complete, including the fully operating southern leg, relatively few jobs are still at stake.

“It’s beyond clear that President Biden is beholden to extreme environmentalists, and Montanans and the American people are bearing the burden,” Sen. Steve Daines (R-Mont.) said in a statement Wednesday.

Robin Rorick, vice president of midstream and industry operations at the American Petroleum Institute, an industry trade group that had backed the project, chalked up its demise to “political obstructionism.”

“This is a blow to U.S. energy security and a blow to the thousands of good-paying union jobs this project would have supported,” Rorick said.

But Democrats defended the death of the pipeline.

“The rushed approval of the Keystone Pipeline by the previous administration was a terrible idea,” House Natural Resources Committee Chairman Raúl M. Grijalva (D-Ariz.) said in a statement. “I’m grateful for the tireless efforts of Native American communities, environmental justice groups and advocates that fought this dangerous pipeline for years. This is their victory.”

The pipeline, which initially was expected to cost about $8 billion, has existed in a sort of limbo for years.

Biden to end Keystone XL pipeline in fight on climate change

President Barack Obama rejected a key U.S. permit for the project in 2015, arguing that greenlighting a pipeline that would transport fossil fuels for decades would undermine the United States’ broader diplomatic effort to rally other nations to raise their climate ambitions.

“America’s now a global leader when it comes to taking serious action to fight climate change,” Obama said at the time. “And frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face — not acting.”

President Donald Trump reversed that decision on his third day in office, though the pipeline remained bogged down in courts and by the Nebraska Public Service Commission.

When he took office in January, one of Biden’s first actions was to pull the permit, blocking the pipeline’s right of way. While environmentalists lauded the decision, Biden has shown no sign of intervening in other pipeline disputes.

The White House declined to comment Wednesday night.

The Keystone XL was designed to carry more than 830,000 barrels a day of crude oil, virtually all of it coming 1,210 miles from the tar sands to Steele City, Neb. A southern leg from Cushing, Okla., to the Gulf Coast was approved in 2012 and was constructed and is functioning. Most of the northern leg also has been completed, with some of the most important gaps in Nebraska.

In addition to opposition from environmentalists and climate experts over the years, the pipeline also drew criticism from farmers, ranchers and Indigenous leaders who did not want to be forced to grant the company rights of way, and who feared the pipeline might one day leak and contaminate water supplies in the giant Ogallala Aquifer.

Jane Kleeb, a leading foe of the pipeline in Nebraska and now head of the state’s Democratic Party, tweeted: “Goodbye TransCanada. I don’t want to see you in our state ever again bullying landowners and disrespecting Tribes. Don’t mess with a mom in a minivan. #NoKXL”

The pipeline also drew criticism from Native American tribes who said that the pipeline would damage burial and archaeological sites. “This is great news for the Tribes who have been fighting to protect our people and our lands,” said Rodney Bordeaux, president of Rosebud Sioux Tribe, which along with other tribes sued the Trump administration over the project. “The treaties and laws guarantee us protections, and we are committed to see that those laws are upheld.”

Despite the long battle over the Keystone XL pipeline, TC Energy (formerly known as TransCanada) earned a record $4.5 billion last year, operating about 3,000 miles of oil pipelines and about 57,900 miles of natural gas pipelines. To capture some of the tar sands business, the company plans to expand a previously existing Keystone pipeline by 50,000 barrels a day this year and perhaps 80,000 barrels a day in 2023, according to S&P Global.

On Wednesday, the Alberta government said it would continue to explore ways to recoup the $1.3 billion the government had poured into the project.

“We continue to be disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancellation of the presidential permit for the pipeline’s border crossing,” Alberta Premier Jason Kenney said in a statement. He vowed to continue to work with U.S. officials “to ensure that we are able to meet U.S. energy demands through the responsible development and transportation of our resources.”

Pipeline protesters seize Minnesota construction site in bid to stop $4 billion project

Despite the demise of the Keystone XL, the Biden administration still faces conflicts over other pipelines, each a source of tension.

This week in Minnesota, protesters seized a construction site along a pipeline route known as Line 3 in an effort to stop the $4 billion project from the Canadian company Enbridge — a move that led to tense standoffs between protesters and authorities. Those fighting the project include Indigenous activists who oppose a carbon-producing fossil fuel project at a time of worsening climate change, and who worry about the potential for polluting tribal lands in the headwaters of the Mississippi River.

Environmentalists on Wednesday hoped the long-awaited death of the Keystone XL would provide momentum to their ongoing efforts to kill Line 3, in part by ramping up pressure on the Biden administration to suspend the pipeline permit before the project is completed.

David Turnbull, strategic communications director for Oil Change International, said the Keystone announcement “only increases the urgency for President Joe Biden to act immediately to stop” Line 3.

Juliet Eilperin, Dino Grandoni, Tik Root and Amanda Coletta contributed to this report.