November 25, 2024 | Keystone XL Pipeline Revival?

Do you recall when America was energy independent? One must only think back a few short years before Joe Biden entered the White House and suppressed the nation’s ability to generate energy in the name of climate change. There were increased regulatory burdens, halts on new oil and gas leases, and a shift to funding renewables, but perhaps the deepest stab occurred when Biden terminated the Keystone XL Pipeline project that would have transported 830,000 barrels of crude daily from Alberta to Nebraska. Trump returning to the White House means that the project is back on the table.

Donald Trump has been pushing for Keystone since his first presidential bid in 2016. He took executive action in January 2017 by signing an executive order to invite TC Energy (previously TransCanada) to apply for a permit. The State Department issued a Record of Decision to approve the project in March 2017. Then in 2018, a US District Court judge prevented the pipeline due to “inadequate environmental reviews.” Obama had rejected the pipeline in 2015 under the premise of climate concerns, and this entire project became politically weaponized.

Still, Trump attempted to expedite the pipeline by repealing some regulations implemented by the National Environmental Policy Act (NEPA) in January 2020. Biden revoked all permits one year later.

Even Build Back Better poster boy Trudeau was “disappointed” by Biden’s actions. “No country would find 173 billion barrels of oil in the ground and just leave them there. The resource will be developed. Our job is to ensure that this is done responsibly, safely and sustainably,” Trudeau said back in 2017. In Canada, 1,000 workers were laid off by TC Energy when the project ceased. The Keystone XL pipeline was expected to contribute $2.4 billion to Canada’s GDP. Additionally, the project would have generated around $30 billion in tax and royalties over its lifetime.

Two years after Biden nuked the project, his own administration released a damaging report that highlighted the missed economic opportunities. The Department of Energy (DOE) claimed that Keystone XL could have created up to 59,000 new jobs and generation up to $9.6 billion. Americans watched as the price of gas doubled in one year. Yet, the US government and others simply blamed Russia especially after the Nord Stream pipelines to Europe were sabotaged in September 2022.

Trump may be able to prioritize the project, but it will not be as simple as turning on a valve. The original permits have been revoked and must be restored. TC Energy already begun disassembling portions of the pipeline and the company would need a large incentive to revive the deal. The climate zealots cling to the notion that renewable energy can completely replace fossil fuels and they will not relent. Every major action that Trump attempts will be met with extreme pushback.

Martin Armstrong November 25th, 2024

Posted In: Armstrong Economics

Next: