Trudeau government looks to continental energy strategy in wake of Keystone cancellation

·3 min read

The federal government is eyeing a comprehensive North American energy strategy as workers reel from cancellation of the Keystone XL pipeline.

The project's presidential permit was rescinded by U.S. President Joe Biden on his first day in office, prompting outrage from Alberta's provincial government. TC Energy, the proponent, had pre-emptively ceased construction of the project.

"I was the minister of natural resources when the Obama administration cancelled Keystone XL. So for me, it's Round 2 of deep disappointment," Minister Jim Carr, Prime Minister Justin Trudeau's representative for the Prairies, said Monday.

"We have to look forward, however, to a continental energy strategy."

That North American energy strategy is enticing to Alberta's premier as well, with Jason Kenney suggesting to the prime minister that they approach Washington together to pitch a collaborative approach to North American energy and climate policy.

"Canada and the U.S. share a highly integrated energy system, including criss-crossing infrastructure such as pipelines and electricity transmission systems. Our energy and climate goals must be viewed in the context of that integrated system," Kenney wrote.

Evan Vucci/The Associated Press; Alex Panetta/The Canadian Press
Evan Vucci/The Associated Press; Alex Panetta/The Canadian Press

The premier has called the Keystone cancellation an "insult" and a "gut-punch," repeatedly pressing for retaliation against the U.S. and suggesting economic and trade sanctions if the administration is unwilling to engage in conversations about the future of the pipeline.

Last year, Kenney invested $1.5 billion in Keystone XL, arguing it would never be completed without the infusion. The pipeline, first announced in 2005, would have carried 830,000 barrels of crude a day from the oilsands in Alberta to Nebraska.

The Biden administration has made no indication it intends to consider reinstating the permit. TC Energy has already laid off 1,000 workers in Alberta.

A continental energy partnership has been an elusive goal for more than 15 years, with multiple trilateral meetings ending with consensus but often without measurable outcomes.

It's been five years since Carr, then the minister of natural resources, hosted his American and Mexican counterparts to discuss the potential of such a partnership.

They agreed to collaborate on things like energy technologies, energy efficiency, carbon capture and emissions reduction. While they signed a document stating these shared goals, synergy between the three countries has been slow to develop.

In December 2014, a similar meeting ended with a to-do list to move forward on a continental energy strategy, including mapping energy infrastructure and sharing data. That data website hasn't been updated since 2017.

Adrian Wyld/Canadian Press
Adrian Wyld/Canadian Press

In that meeting, then-natural resources minister Greg Rickford was making the pitch to the Obama administration for why Keystone XL should be permitted to live. It was cancelled — for the first time — less than a year later.

"We've gone through a period over the last number of years where relations around energy have kind of died a slow death and become more and more narrowly focused around individual projects," said Monica Gattinger, director of the Institute for Science, Society and Policy at the University of Ottawa.

"There's tremendous potential between Canada and the United States to collaborate around energy and environmental objectives in the long term."

Gattinger said changes in the United States around hydrocarbon and shale have diminished the country's motivation for a broader energy approach. With the national governments in Canada and the U.S. now more closely aligned on climate priorities, she added there's the potential for a breakthrough.

"Both countries have vast potential across a whole host of energy resources," she said.

"Those are the conversations that we have not been having in North America for a number of years now. And there is a real opportunity to do so at this time."

Carr is optimistic, too.

"We're hardly starting from scratch, and there will be alignment," he said, alluding to his hope for co-operation between the U.S. and Canada, but also with the Prairie provinces.

"There is an awful lot of work to be done and an awful lot of potential."