Alberta
A Trump Effort To Revive Keystone XL Would Likely Be Purely Symbolic
From the Daily Caller News Foundation
Of all the destructive actions President Joe Biden took related to energy policy during his four years in office, his stroke-of-a-pen decision on his first day in office to cancel the cross-border permit for the Keystone XL pipeline system as a political payoff to his environmentalist campaign funders was perhaps the worst.
It was bad enough that Biden took that action to cancel the $8 billion project absent any finding that operator Trans-Canada (now TC Energy) was in violation of any law or regulation of the United States. It was even worse that he took that action despite the fact that Trans-Canada had already spent over $3 billion building much of the project with hundreds of miles of pipe already in the ground by January 2021.
Worse still are the realities that, along with cancelling the project, Biden canceled as many as 10,000 high-paying American jobs during the construction of the project, left America more dependent on oil imports from hostile nations like Venezuela and Iran due to lost imports from Canada and even cost the province of Alberta an estimated $1.3 billion it stood to gain from the project’s completion.
But the most damaging impact of all emanating from Biden’s craven act of crony politics was the loss of trust in the consistent, fair application of American law and regulations it caused. The cancellation of Keystone XL made it vastly harder for big companies to secure financing for big projects that take years to permit and develop because funders could no longer assume U.S. laws would be applied based on merit rather than political fiat. That advantage over other parts of the world that the United States has always enjoyed was severely damaged.
Last week, we saw a flurry of stories by major media outlets that the Trump transition team is working on plans to reverse Biden’s ill-considered order and trying to revive the Keystone XL project. While that is certainly a laudable goal, developments that have taken place since 2021 will likely limit it to a purely symbolic act.
First, TC Energy no longer even owns the rights to the project or its remaining assets. Those assets, along with the rest of the previously existing Keystone Pipeline system, were spun off into a new entity named South Bow Energy in June of this year. A spokesperson for that company was reluctant to comment when asked about possible revival of Keystone XL, saying, “As a new company, our focus and priority at this point is to continue to deliver energy safely and efficiently. Part of South Bow’s long-term strategy is to grow our business.”
Second, a few months after Biden’s destructive action, TC Energy announced it had cancelled the project and would not be seeking to carry on the fight. As a result of the cancellation, TC Energy then removed the hundreds of miles of pipe that had already been installed into the ground so that it could be repurposed for use in other projects.
Third, the rights-of-way for the Keystone XL project are no longer in effect. Nor are the permits for the project. Thus, any effort to revive it by South Bow would necessitate a repetition of the painstaking, years-long process of reacquiring all those miles of rights-of-way and local, state and federal permits.
This brings us back to the most damaging aspect of Biden’s political payback: Any such effort would without doubt extend into the next presidential term to begin in 2029. Who is going to be willing to commit billions of now-inflated dollars (thanks largely to Biden and his team’s policies) to a pipeline project that might well end up being cancelled should voters decide to elect another Democrat to the presidency in 2028?
So, while the desire by the Trump team to restart Keystone XL is commendable, the facts on the ground almost certainly mean it would be a purely symbolic gesture.
This current presidency cannot end soon enough.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
From the Fraser Institute
By Tegan Hill
In February 2024, the Smith government promised to share a plan to grow the Heritage Fund—Alberta’s long-term resource revenue savings fund—with the public before the end of 2024. But 2025 is upon us, and Albertans are still waiting.
The Lougheed government originally created the Heritage Fund in 1976/77 to save a share of the province’s resource wealth, including oil and gas revenues, for the future. But since its creation, Alberta governments have deposited less than 4 per cent of total resource revenue in the fund.
In other words, for decades successive Alberta governments have missed a golden opportunity. When governments make deposits in the Heritage Fund, they transform onetime (and extremely volatile) resource revenue into a financial asset that can generate more stable earnings over time. Eventually, the government could use annual income from the fund to replace volatile resource revenue in the budget.
Historically, however, rules that would have helped ensure the fund’s growth (for example, a requirement to deposit 30 per cent of resource revenue annually) were “statutory” rather than “constitutional,” which meant Alberta governments could easily disregard, change or eliminate these rules once they were no longer convenient.
And they did. The government changed that 30 per cent requirement to 15 per cent by 1982/83, and after an oil price collapse, eliminated it entirely in 1987/88. Due to a lack of consistent deposits, paired with the real value of the fund eroding over time due to inflation, and nearly all fund earnings being spent, the Heritage Fund is expected to be worth less than $25 billion in 2024/25.
Again, while Premier Smith has promised to grow the fund to between $250 billion to $400 billion by 2050, we’ve yet to see how she plans to do that. Whatever plan the government produces, it should heed lessons from other successful resource revenue savings fund such as Alaska’s Permanent Fund.
The Alaska government created its fund the same year Alberta created the Heritage Fund, but Alaska’s fund is worth roughly US$80 billion (or C$113 billion) today. What has the Alaska government done differently?
First, according to Alaska’s constitution, the state government must deposit 25 per cent of all mineral revenues into the fund each year. This type of “constitutional” rule is much stronger than a “statutory” rule that existed in Alberta. (While Canada does not have separate provincial constitutions, it’s possible to change Canada’s Constitution for province-specific measures.) Second, the Alaska government must set aside a share of the fund’s earnings each year to offset the effects of inflation—in other words, “inflation-proof” the principal of the fund to preserve its real value. And finally, the government must pay a portion of fund earnings to Alaskan citizens in annual dividends.
The logic of the first two rules is simple—the Alaskan government promotes growth in the fund by depositing mineral revenue annually, and inflation-proofing maintains the fund’s purchasing power. But consider the third rule regarding dividends.
The Alaska government created the annual dividend, paid out annually to Alaskans, to create political pressure for future governments to responsibly maintain the fund. Because citizens have an ownership share in the fund, they’re more interested in the state maximizing returns from its resource wealth. This has helped maintain and reinforce robust fiscal rules that make the Permanent Fund successful.
Based on this success, if the Smith government began contributing 25 per cent of resource revenue to the Heritage Fund and inflation-proofed the principal, it could pay each Albertan a total dividend between roughly $600 to $1,100 from 2024/25 to 2026/27, or roughly $2,300 to $4,400 per family of four. And as the fund grows, so would the dividends.
Almost one year ago, the Smith government promised a new plan for the Heritage Fund. When the plan is finally released, it should include a constitutional requirement for consistent contributions and inflation-proofing, and annual dividends for Albertans.
From the YouTube page of Kevin O’Leary
Interview with Kyle Reiling, Executive Director of the Greenview Industrial Gateway.
“This is the only place on earth that can do something this scale”
When Kevin O’Leary heard Alberta Premier Danielle Smith reveal just how much energy Alberta has, he knew Alberta has the solution for the coming explosion in energy consumption.
Kevin O’Leary: The demand for AI is skyrocketing—and America is out of power. Enter Alberta, with abundant natural gas and a bold premier. I’m raising $70 billion to create the world’s lowest-cost, highest-efficiency data center. Hyperscalers like Tesla, Microsoft, and Google need it, and we’re making it happen. This is how you lead the AI revolution.
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