Trudeau cabinet welcomes Trump’s Keystone XL decision
President approves $8B pipeline project but says it's still subject to 'renegotiation of terms by us'
By John Paul Tasker, CBC News Posted: Jan 24, 2017 12:52 PM ET Last Updated: Jan 24, 2017 2:19 PM ET
Donald Trump has given the green-light to the Keystone XL pipeline project, breathing new life into a project that was long thought dead, but a series of new demands from the U.S. president could lead to headaches for the Liberal government in Ottawa.
Cabinet ministers assembled in Calgary for a retreat welcomed the president’s decision Tuesday, calling his executive order a boon for Canadian jobs and government coffers, even if Trump has said he would like to see a "renegotiation" of the terms with TransCanada, the project’s proponent.
"My reaction is that it would be very positive for Canada — 4,500 construction jobs and a deepening of the relationship across the border on the energy file," Natural Resources Minister Jim Carr told reporters, referring to the number of temporary jobs that will be created in Canada.
"I’m now a Toronto MP but I’m an Albertan," Canada’s Foreign Affairs Minister Chrystia Freeland said of the president’s executive order. "As an Albertan, it’s a great decision for Canada and Alberta. The province needs jobs."
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The government had expected Trump to act fast and approve the pipeline project early in his term, but sources told CBC News they were not given advanced notice by the president*rsquo;s team that the decision would be coming today.
Trump’s picks of Rick Perry to lead the department of energy and Ryan Zinke, the interior secretary-designate, have not yet been confirmed by the Senate, leaving a leadership gap in the two departments tasked with overseeing the development of natural resources and energy infrastructure.
‘Renegotiation of terms’
The Liberals have long supported the $8-billion dollar project, and Prime Minister Justin Trudeau said he was "disappointed" after former president Barack Obama rejected the pipeline in 2015 after a nearly decade-long review process.
The project has been a thorn in the side of the Canada-U.S. relationship, and former prime minister Stephen Harper was openly critical of the former Democratic president for delaying construction. Harper predicted the pipeline would be built "with or without Obama," a forecast that was borne out Tuesday.
Calgary’s mayor, Naheed Nenshi, who met with the prime minister and his cabinet to discuss the ailing Alberta economy, said he was happy to hear of Trump’s approval.
"I fundamentally believe the decision to deny that pipeline was one the biggest domestic policy errors of the previous administration," he said. "It is important for Canadian energy to have access to global markets; it’s important for the prosperity of our nation for that to happen."
However, Trump said Tuesday that the pipeline would still be subject to a "renegotiation of terms by us."
"We are going to renegotiate some of the terms and, if they’d like, we’ll see if we can get that pipeline built. A lot of jobs, 28,000 jobs. Great construction jobs," he said, but did not specify what more he would like to extract from the proponent before construction can proceed.
President Donald Trump shows his signature on an executive order on the Keystone XL pipeline, Tuesday, Jan. 24, 2017, in the Oval Office of the White House in Washington. (Evan Vucci/AP Photo)
Although, Trump has said he will push a "Buy American" agenda and will demand pipeline companies source steel used during construction from American manufacturers.
"We will build our own pipes, like we used to in the old days," Trump said.
If built, the project will be a shot in the arm for Alberta’s oil patch as the project will carry 830,000 barrels of oil per day into the United States when fully operational. The industry has long said it needs more pipeline capacity to carry its product to market.
Supply from Western Canada will grow to 5.5 million barrels of oil a day by 2030, the Canadian Association of Petroleum Producers has forecasted, while current pipelines can only carry four million barrels.
The Liberal government signed off on Kinder Morgan’s Trans Mountain pipeline, and Enbridge’s Line 3 last November, which, combined, will add capacity to transport 1.3 million more barrels of oil a day.
All told, Canada’s oil and gas producers could be flush with pipeline space if all of these projects are constructed, which could spell bad news for another much-delayed TransCanada project, Energy East.
"This is a decision that TransCanada will have to make ... and the proponent’s own sense of where the markets are," Carr said. "The job of the government of Canada is to make sure that the regulatory system is credible, and that’s why we made fresh appointments to the National Energy Board."
Keystone XL has Canadian approvals
Carr said Tuesday Keystone XL has secured all of its approvals north of the border.
"There is no necessary steps that TransCanada would have to take in addition to those that have already been taken successfully," the Winnipeg-area minister said.
The National Energy Board and the former Harper government approved the project in 2010 but construction has been stalled as the proponent awaited approvals from the president, and states along the route.
TransCanada still has to secure route approval from Nebraska, as it previously withdrew its application for a state permit after Obama rejected the pipeline.
The massive 1,900-kilometre pipeline will connect to TransCanada’s existing Keystone pipeline system, and will carry oil from Hardisty, Alta., south of the border to refineries near Houston, Tex.