Keystone XL is cancelled. What does that mean for Saskatchewan?

·2 min read

U.S. President Joe Biden has cancelled the permit for the Keystone XL pipeline project.

Had it gone ahead, the 1,897-kilometre pipeline would have carried 830,000 barrels of crude oil a day from the oilsands in Hardisty, Alta., to Nebraska, connecting to the original Keystone pipeline that runs to U.S. Gulf Coast refineries. A portion of it would have crossed into southern Saskatchewan.

So what does the cancellation mean for the province?

Economist Jason Childs says there is an effect, though it's small. It's possible some of the pipe would have been produced in the province and there would have been some job opportunities as well.

"What it does mean is the rail lines are going to be clogged," Childs, an associate professor at the University of Regina, said. "That rail capacity is going to continue to be used to a greater or lesser extent by oil instead of agricultural products or manufacturing products."

Childs said the more capacity the rail system has, the better it is for oil producers and other producers alike.

The cancellation could be a sign of things to come, in terms of the new U.S. administration's approach to energy, Childs said.

"Any international pipeline, I think, is just dead on the drawing board right now," he said.

Martin Boucher, a faculty lecturer at the Johnson Shoyama Graduate School of Public Policy, specializes in energy transition. He said it is possible for Saskatchewan to pivot away from oil and gas because of the resource-richness of the province. But there's a human cost to that, too.

"It is often disproportionately difficult on certain people as we move in this direction, so I think that always has to be kind of remembered when we think about moving away from oil and gas," he said.

"Obviously the main benefit is that we get to reduce our emissions, which we really, really need to do. Saskatchewan has one of the highest per capita emissions in the country."

Despite it all, Childs said he doesn't think this will affect the wider Canada-U.S. trading relationship.

"It's going to make it harder for western provinces ... to feel positively towards the U.S. federally."

Moe reaction

Meanwhile, Saskatchewan's premier is not happy about the cancellation. In a statement Thursday, Scott Moe said it was a "devastating blow to North American energy security."

"If the federal government is unwilling to further challenge the Biden administration's unilateral action to cancel this pipeline, will they stand with the advancement of future privately developed pipelines, or will they abandon the hardworking employees providing livelihoods for thousands of families in western Canada?" the statement said.

Moe said he wants clarification on what this means for future cross-border pipeline projects.