The sponsor of the Keystone XL crude oil pipeline said Wednesday it is pulling the plug on the contentious project after Canadian officials failed to persuade President Joe Biden to reverse his cancellation of its permit on the day he took office.
Calgary-based TC Energy said it would work with government agencies “to ensure a safe termination of and exit from” the partially built line, which was to transport crude from the oil sand fields of western Canada to Steele City, Nebraska.
Construction on the 1,200-mile (1,930-kilometer) pipeline began last year when former President Donald Trump revived the long-delayed project after it had stalled under the Obama administration.
It would have moved up to 830,000 barrels (35 million gallons) of crude daily, connecting in Nebraska to other pipelines that feed oil refineries on the U.S. Gulf Coast.
Biden canceled it in January over longstanding concerns that burning oil sands crude would make climate change worse.
Canadian Prime Minister Justin Trudeau objected to the move, but officials in Alberta, where the line originated, expressed disappointment in recent weeks that he didn’t lobby harder to reinstate the pipeline’s permit.
Alberta invested more than $1 billion in the project last year, kick-starting construction that had stalled amid determined opposition to the line from environmentalists and Native American tribes along its route.
Alberta officials said Wednesday they reached an agreement with TC Energy, formerly known as TransCanada, to exit their partnership. The company and province plan to try to recoup the government’s investment, although neither offered any immediate details on how that would happen.
“We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancellation of the presidential permit for the pipeline’s border crossing,” Alberta Premier Jason Kenney said in a statement.
Environmentalists who had fought the project since it was first announced in 2008 described its cancellation as a “landmark moment” in the effort to curb the use of fossil fuels that contribute to climate change.
“Good riddance to Keystone XL,” said Jared Margolis with the Center for Biological Diversity, one of many environmental groups that sued to stop it.
Attorneys general from 21 states had sued to overturn Biden’s cancellation of the contentious pipeline, which would have created thousands of construction jobs. Republicans in Congress have made the cancellation a frequent talking point in their criticism of the administration, and even some moderate Senate Democrats including Montana’s Jon Tester and West Virginia’s Joe Manchin had urged Biden to reconsider.