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.

Related Topics:#DailyCaller #DavidBlackmon #KeystoneXLPipeline PresidentElectTrump PresidentElectTrumpTariffs

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Low oil prices could have big consequences for Alberta’s finances

Published on April 26, 2025

Todayville

From the Fraser Institute

By Tegan Hill

Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped below US$60 per barrel. Given every $1 drop in oil prices is an estimated $750 million hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.

The Smith government already projects a $5.2 billion budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion “contingency” for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.

Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.

Unfortunately, this is all part of the resource revenue rollercoaster that’s are all too familiar to Albertans.

Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high as $25.2 billion in 2022/23 and as low as $2.8 billion in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.

Fortunately, the Smith government can mitigate this volatility.

The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.

Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up a sizeable fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.

Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.

And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create a rainy-day account.

Alberta

Governments in Alberta should spur homebuilding amid population explosion

Published on April 26, 2025

Todayville

From the Fraser Institute

By Tegan Hill and Austin Thompson

In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.

Alberta has long been viewed as an oasis in Canada’s overheated housing market—a refuge for Canadians priced out of high-cost centres such as Vancouver and Toronto. But the oasis is starting to dry up. House prices and rents in the province have spiked by about one-third since the start of the pandemic. According to a recent Maru poll, more than 70 per cent of Calgarians and Edmontonians doubt they will ever be able to afford a home in their city. Which raises the question: how much longer can this go on?

Alberta’s housing affordability problem reflects a simple reality—not enough homes have been built to accommodate the province’s growing population. The result? More Albertans competing for the same homes and rental units, pushing prices higher.

Population growth has always been volatile in Alberta, but the recent surge, fuelled by record levels of immigration, is unprecedented. Alberta has set new population growth records every year since 2022, culminating in the largest-ever increase of 186,704 new residents in 2024—nearly 70 per cent more than the largest pre-pandemic increase in 2013.

Homebuilding has increased, but not enough to keep pace with the rise in population. In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.

Moreover, from 1972 to 2019, Alberta added 2.1 new residents (on average) for every housing unit started compared to 3.9 new residents for every housing unit started in 2024. Put differently, today nearly twice as many new residents are potentially competing for each new home compared to historical norms.

While Alberta attracts more Canadians from other provinces than any other province, federal immigration and residency policies drive Alberta’s population growth. So while the provincial government has little control over its population growth, provincial and municipal governments can affect the pace of homebuilding.

For example, recent provincial amendments to the city charters in Calgary and Edmonton have helped standardize building codes, which should minimize cost and complexity for builders who operate across different jurisdictions. Municipal zoning reforms in Calgary, Edmonton and Red Deer have made it easier to build higher-density housing, and Lethbridge and Medicine Hat may soon follow suit. These changes should make it easier and faster to build homes, helping Alberta maintain some of the least restrictive building rules and quickest approval timelines in Canada.

There is, however, room for improvement. Policymakers at both the provincial and municipal level should streamline rules for building, reduce regulatory uncertainty and development costs, and shorten timelines for permit approvals. Calgary, for instance, imposes fees on developers to fund a wide array of public infrastructure—including roads, sewers, libraries, even buses—while Edmonton currently only imposes fees to fund the construction of new firehalls.

It’s difficult to say how long Alberta’s housing affordability woes will endure, but the situation is unlikely to improve unless homebuilding increases, spurred by government policies that facilitate more development.