Construction jobs lost over Keystone XL pipeline cancellation

By Jenny LescohierJanuary 28, 2021

Biden’s decision, made by executive order on the day of his inauguration, is seen by proponents as the death of the project that was to move 830,000 barrels of oil sands crude oil per day

More than 1,000 construction jobs will be eliminated in the coming weeks as work is halted on the Keystone XL oil pipeline following President Joe Biden’s revocation of the project’s presidential permit.

Commissioned in 2010 to pump oil from the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas, and also to oil tank farms and an oil pipeline distribution center in Cushing, Oklahoma, the project has seen more than a decade of legal battles.

Biden’s decision, made by executive order on the day of his inauguration, is seen by proponents as the death of the project that was to move 830,000 barrels of oil sands crude oil per day.

Opponents of the line, spanning approximately 1,000 miles in the U.S. alone, fought its construction for years, claiming it harms the environment and would hamper U.S. transition to cleaner fuels.

Canada-based TC Energy owns the existing Keystone oil pipeline and also operates the largest integrated natural gas pipeline system in North America, stretching from British Columbia to Mexico. According to the company’s 2019 annual report, Keystone XL development costs were $1.5 billion from January 2018 through December 31, 2019.

“I believe this will send a concerning signal to infrastructure developers that resonates far beyond our project and will stifle innovation for a practical transition towards sustainable energy,” KXL President Richard Prior was quoted by Reuters.

Proponents of the line have argued the project created several thousand good-paying jobs and that pipelines remain the safest ways to transport fuel. The line was meant to come into service in 2023.

Construction was well underway in Canada and the international border crossing was complete, according to reports. In the United States, TC Energy had started work on pump stations in each of the states the line would pass through, but legal setbacks left it unable to do dredging work under U.S. bodies of water.

The company is expected to shut down construction at U.S. pump station sites and the Canadian portion of the project in coming weeks.

During the U.S. campaign, Biden had committed to canceling the project. Former President Donald Trump approved a permit for the line in 2017 shortly after taking office, but the line faced numerous subsequent legal challenges that curtailed construction.

Doug Carlson, chief executive officer of the National Utility Contractors Association (NUCA), issued a statement in response to the cancellation, claiming the move will not help the Biden Administration’s goal to reinvigorate the nation’s economy.

“This project has created over 10,000 high-paying construction jobs,” Carlson claimed. “Wages on this project were going to exceed $2.2 billion for thousands of hard-working Americans, whose members and their families were counting on this work.”

[Note: TC Energy Corp. has stated more than 1,000 people are out of work as a result of Biden’s executive order. The 11,000 and $2.2 billion figures cited in earlier reports were estimates published by the company.]

“Pipeline equipment suppliers and manufacturers are also going to be greatly affected, costing even more jobs,” Carlson stated. “And Native Americans will feel the loss of more than $1 billion in equity ownership opportunities and the project sponsor’s commitment of over $500 million for Native American suppliers and jobs in their communities.”

He concluded by urging the Biden Administration to reverse its decision, stating, “Infrastructure projects like this are vital to the nation’s economy, and the recommitment of construction industry resources to new projects is not something that is done overnight.”

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