BLOG

Buffett Wins: Biden Set To Cancel Keystone Pipeline Permit On First Day Of Office

Posted on January 18, 2021

 

ZeroHedge

By Tyler Durden

For a decade TransCanada’s management said that the Keystone XL pipeline would be built because it makes too much economic sense for America. But, as @Greekfire23 points out this morning, "that’s not how we operate down here" because according to Reuters, "Joe Biden is planning to cancel the permit for the $9 billion Keystone XL pipeline project as one of his first acts in office, and perhaps as soon as his first day."

The words "Rescind Keystone XL pipeline permit" appear on a list of executive actions likely scheduled for the first day of Biden's presidency, according to an earlier report by the Canadian Broadcasting Corp.

Biden - who was vice president in the Obama administration when it rejected the project as contrary to its efforts to combat climate change -  had earlier vowed to scrap the oil pipeline’s presidential permit if he became president. In 2015, Barack Obama axed the project saying Canada would reap most of the economic benefits, while the project would add to greenhouse gas emissions.

The project, which would move oil from the province of Alberta to Nebraska, had been slowed by legal issues in the United States. It also faced opposition from environmentalists seeking to check the expansion of Canada’s oil sands by opposing new pipelines to move its crude to refineries.

Canada’s ambassador to the United States said she would continue to promote a project that she said fit with both countries’ environmental plans. “There is no better partner for the U.S. on climate action than Canada as we work together for green transition,” Ambassador Kirsten Hillman said in a statement.

Others were less diplomatic: Alberta Premier Jason Kenney said on Twitter that cancellation would eliminate jobs, weaken U.S.-Canada relations and undermine American national security by making the United States more dependent on OPEC oil imports.

TC Energy Corp., which operates the pipeline, said it would achieve net zero emissions by 2023 when it enters service. The company also pledged to use only renewable energy sources by 2030 in a bid to win Biden’s support. None of that mattered, however, and TC Energy shares fell as much as 5.9% at the open, the most since April 1. Peer Enbridge was down about 2.2% even though analysts have said Keystone's cancelation would be positive for ENB.

The permit cancellation will come as construction is well under way in Canada, with the international border crossing complete. In the United States, TC has started construction on pump stations in each of the states the line will pass through, but legal setbacks cost it much of the 2020 construction season.

Biden's executive order would follow almost exactly 4 years to the day since outgoing president Trump did the opposite, when he signed an executive order that advanced construction of the Keystone XL and Daokta access pipelines, putting a spoke, so to say, in the train wheels of Warren Buffett's train-based oil transportation quasi-monopoly.

But now that a democrat is back in the White House, it's time for all that generous lobby spending by Buffett and Berkshire to be put to political use, and as cynics have been quick to point out, "Warren Buffet getting paid right away. His trains will now transport the oil. Not about the environment. But hey believe what you want."