One of the first acts of the new Biden Administration is cancelling the permits for the Keystone XL Pipeline, a project of Canadian energy giant TC Energy that would have moved 800,000 barrels per day of heavy crude from Alberta to Cushing, OK, providing easier access to Gulf Coast refineries. The project was originally killed in the Obama Administration due to State Department objections, later to be revived and fast-tracked by President Trump. Cancelling the project, well into its construction, will cost 11,000 union construction jobs, the ongoing pipeline jobs and revenues, and $2 billion of future investment.
- Critical energy infrastructure. In the U.S. we have historically enjoyed nearly 100% reliability of energy supply. When we flip on a light switch, the lights come on. When we want to fill up our car, gasoline is available without waiting in line. Natural gas heats our water and keeps us warm in winter. Increasingly, “progressive” states have been resisting new energy infrastructure. No longer are New York, the New England states and California rejecting “fossil fuels” projects; major energy projects have been stalled or cancelled in West Virginia, Virginia, North Carolina, and Minnesota. As our infrastructure ages and becomes obsolete, it will become more expensive and less reliable.
- Mindless adoption of “Green” policies will necessarily bring brownouts, energy shortages, and higher gasoline prices. That is by design. (See: California.)
- Discouraging foreign investment. “Political risk” is a major consideration for investors in major projects. Because of our tradition of the Rule of Law, political risk has never been a serious consideration in the U.S. Third world countries nationalize assets. The New! Improved! USA is throwing a brand new, state-of-the-art, nearly-completed asset in the trash.
- Risk and damage of removal. Will there be an Environmental Impact Study? Soon the Biden Administration will be touting the “well-paying” jobs created by the massive excavation and salvage project. Must be Paul Krugman’s idea.
- Relations with Canada. Oil is 1/6th of the Canadian economy. TC Energy, formerly TransCanada Pipeline, is owner of the pipeline. They are $9 billion dollars into this project, which has been in the works for years.
BONUS — The Biden Administration has announced a 60-day moratorium on new federal leases as well as new oil and gas drilling permits on federal lands, including the Gulf of Mexico. This is a shot across the bow of Gulf producers; lack of permits will immediately impact drilling activity and jobs in South Louisiana and the Gulf Coast.
HISTORICAL NOTE: Joe Biden is a long-standing opponent of domestic energy infrastructure. In 1973, a deadlocked Senate nearly blocked the Trans-Alaska Pipeline, sorely needed in reaction to the first OPEC embargo. Biden, then a back-bencher, joined the opposition. Vice-President Spiro Agnew broke the Senate’s tie vote, and the pipeline went in service in 1977. Sixteen billion barrels later, America remains free of OPEC domination, thanks in part to the Trans-Alaska Pipeline. The boon to the economy, foreign policy, and the State of Alaska has been immeasurable.
One might say that Senator Biden lacked the foresight and vision of Spiro Agnew and the pro-pipeline Senators.