Alberta Props Up Keystone XL Project With $7.5 Billion Cash Injection

Cash promise for the controversial oil pipeline comes just days after province cut $100 million from public education citing a funds crunch due covid lockdowns.

Find more of our Covid-19 coverage.

At a time when public funding should be applied towards fighting the coronavirus pandemic, the provincial government of Alberta is focusing instead on propping up the Keystone XL pipeline.

This past Tuesday, the Alberta government announced a massive $7.5 billion commitment in financing and loan guarantees to the Canadian energy company TC Energy, formerly TransCanada for the controversial pipeline project. The company plans to start construction on the pipeline this month.

Keystone Oil Pipeline
Construction on the pipeline is slated to begin immediately in Alberta, at the Canada-US border, in Montana, South Dakota, and Nebraska. Photo by shannonpatrick17/Flickr.

Keystone XL would run 1,210 miles from Hardisty, Alberta to Steele City, Nebraska where it would connect with the rest of the already-completed Keystone Pipeline system to transport diluted bitumen from the Alberta oil sands to the Gulf Coast where it would be refined for domestic and overseas markets. The pipeline, which is expected to be operational by 2023, would carry more than 800,000 barrels of Alberta crude oil per day.

Alberta premier Jason Kenney — fresh from cutting more than $100 million from education funding that could result in thousands of public service jobs lost in the middle of the pandemic — announced the government is backstopping Keystone XL on March 31.

“We cannot wait for the end of the pandemic and the global recession to act,” said Kenney. “Today we are moving forward with a project that is essential to our future prosperity. This investment in Keystone XL is a bold move to re-take control of our province’s economic destiny and put it firmly back in the hands of the owners of our natural resources, the people of Alberta.”

Using scarce public funds to kickstart a project nobody in the private investment world would back “demonstrates a severe detachment from reality that I can only assume is the product of late-stage government capture by the petroleum lobby,” says Kai Nagata, communications director of the Canadian environmental group Dogwood Initiative. “We have a jurisdiction that appears willing to cannibalize its capacity to provide basic services to its own citizens, in order to continue transferring public money into private hands. It’s an imploding petro state.”

Nagata says funding the fossil fuel project is directly at odds with what is required to prevent catastrophic climate breakdown, not to mention the price of oil, which has dropped to less than $10 per barrel thanks to an ongoing oil price war between Russia and Saudi Arabia.

“We need to be winding down fossil fuel extraction, not ramping it up with taxpayer money,” he says. “And never mind our climate commitments — it’s perverse to be thinking of spending any money on this sunset industry during a global pandemic. Every dollar we have should be going to COVID-19 response and rebuilding a healthy, resilient economy.”

Portland Activists protest Keystone Oil Pipeline
Environmental and Indigenous groups that have been fighting the pipeline for years are already lining up to try and make sure work on the pipeline is never completed. Photo by Brylie Oxley.

According to the province, construction will begin immediately in Alberta, at the Canada-US border, in Montana, South Dakota, and Nebraska. The province of Alberta has deemed construction sites can remain open if proper physical distancing is maintained. Construction work has been categorized as an essential service during the pandemic in most US states as well.

Environmental and Indigenous groups that have been fighting the pipeline for years are already lining up to try and make sure work on the pipeline is never completed.

“It will be up to the people along its path whether they think this is a wise use of their money and land,” Nagata says.

One region along the pipeline’s proposed path where serious opposition remains is in the state of Nebraska. Here, local landowners, farmers, and a grassroots environmental group, Bold Nebraska, have been engaged in a long struggle to stop the pipeline and protect the state’s most significant natural assets the Sandhills and the Ogallala Aquifer.

According to Bold Nebraska, TC Energy still needs to overcome a number of legal barriers before it can begin construction.

“There are 70 landowners that have refused to sign their land over to TC and that has sparked eminent domain lawsuits in various counties,” says Jane Kleeb, founder of Bold Nebraska. “There is one level of lawsuit over price and contract terms and another level over the actual legal ability to use eminent domain because there wasn’t due process.”

There is also a federal suit opposing the pipeline filed in the US District Court in Montana by environmental and Indigenous groups, including the Indigenous Environmental Network and the Rosebud Sioux Tribe.

“We are continuing to fight this pipeline both at local and federal levels,” Kleeb. “If they try to construct that pipeline, we will mobilize to protest every single day.”

Since March, a coalition of environmental, landowner, conservation and indigenous groups in the area have been speaking out over what they are calling a serious health risk to pipeline construction during the height of the COVID-19 pandemic.

If TC Energy begins work on the pipeline, it would mean camps with hundreds of outside workers would be plunked down in the middle of rural and tribal communities without any social distancing measures to protect those in the camps as well as the residents of the surrounding areas.

“On top of everything — the climate disaster, property rights, treaty rights, risk to water — in Nebraska workers don’t have to go through the same quarantine as anyone else would have to,” Kleeb explains. “State rules say if I go out of state I need to self-quarantine for two weeks, but TC can send 1,000 workers here and they don’t have to quarantine at all. It’s truly remarkable at this moment that this is what Big Oil’s play is.”

In the US, Native American tribes that have been opposing the project, including the Rosebud Sioux in South Dakota and the Fort Belknap Indian Community in Montana, filed a temporary restraining order against TC Energy and the federal government March 17.

Meanwhile, citing that many cities, such as Boston and New York City, have instituted their own bans on construction projects amid the pandemic, the coalition opposing the pipeline has already moved to add this issue to legal briefs in conjunction with pending lawsuits in an attempt to convince a judge to halt construction work on the pipeline if it does begin. Kleeb hopes it never does.

“Our rural and tribal communities are strained as it is for medical supplies and hospital beds amid a global pandemic. TC Energy must put an end to all activity on Keystone XL in our small towns as the pandemic grows across our country,” she says. “All these years TC Energy bragged about being a good neighbor and they are now putting lives at risk with this move.”

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