Canadians, however, don’t seem too optimistic as news of Biden’s reported plans to cancel TC Energy’s (TSX, NYSE: TRP) Keystone XL pipeline permit via executive action has grabbed headlines over the past two days.
President Biden is expected to make an announcement on the issue before the end of the day. He is also likely to unveil a timeline to revive some of the rigorous environmental regulations enacted during the Obama administration, later revoked by the Trump administration.
Analysts believe that any slowdown effects in the mining sector will be offset by Biden’s plans to support domestic production of metals used to make electric vehicles, solar panels and green technologies, crucial to his $2 trillion climate plan.
Biden has said he’d back bipartisan efforts to foster a domestic supply chain for lithium, copper, rare earths, nickel and other strategic materials that the US imports from China and other countries.
Environmentalists are hoping the new administration addresses issues such as mining on public lands, water protection and clean energy. Some wish for the extension of mining bans, such as the 20-year moratorium on new uranium licenses in the Grand Canyon.
The Act passed the House of Representatives, but came to a standstill in the Senate at the start of 2020.
Rejoining the Paris Agreement is also in the agenda. “It’s a no-brainer for President Biden, and a move we’re glad to see him take on day one in office,” Greenpeace USA Climate Campaign Director Janet Redman said in a statement.
“But, if the whole world is going to reach net-zero emissions by 2050, the United States has a responsibility to go deeper and get there much faster.”
Redman added that phasing out fossil fuels and initiating a just transition to renewable energy are American’s best chance to avoid “climate chaos” and expand economic opportunity in the process.
Down the pipe
The on-again, off-again $8 billion Keystone XL pipeline project would carry more than 800,000 barrels of Alberta crude oil a day to refineries in Texas.
Biden’s decision to cancel it could strain the new administration’s relationship with Canada, whose oil industry has been hit particularly hard in the past two years.
There have been a slew of divestments by big energy giants as well as cancellations of major projects, including the $20 billion Frontier oil sands project, scrubbed by Teck Resources (TSX:TECK.B).
Canada’s Prime Minister Justin Trudeau said this week he would continue to press the case for the pipeline project
“Our government is making sure that Canada’s views are heard and considered by the incoming administration at the highest levels,” he told a news briefing on Tuesday, in front of his home at Rideau Cottage.
Alberta Premier Jason Kenney said in a statement that cancelling the project would kill jobs in both countries and weaken cross-border ties. In his view, the move would also undermine US national security by making the country more dependent than ever on overseas oil imports.
“Should the incoming U.S. administration abrogate the Keystone XL permit, Alberta will work with TC Energy to use all legal avenues available to protect its interest in the project,” he said.
Christopher Sands, director of the Wilson International Center’s Canada Institute believes that Canada’s oil and gas sector might benefit from the change of leadership in the US.
He noted in a November interview that what Biden had promised to tear up was a building permit for Keystone XL, not an operating permit. Construction of the pipeline already began last year, jump started with a $1.1-billion investment by the province of Alberta.
“The segment of that pipeline that crosses the US-Canada border, which is the only place that the presidential permit applies, has been built,” Sands said. “So I think that’s somewhat of an empty threat.”