On January 20 when the rest of the world was congratulating President Biden on his inauguration, Jason Kenney was attacking Biden’s character and threatening trade wars because Biden revoked Trump’s executive order approving KXL.
Not satisfied that he’d made his point, Kenney appeared on Fox TV and other media outlets to condemn Biden’s disrespectful treatment of “a Canadian government,” an ally and a friend.
Leaving aside the obvious fact that Kenney’s characterization of Alberta as “a Canadian government” is misleading—Alberta is a “subnational” government or “provincial” government, it is not the federal government and notwithstanding what Fox viewers may think, Kenney does not speak for Canada. Or all Albertans for that matter.
So what did he say?
Biden did something wrong
Kenney said Biden retroactively vetoed an existing pipeline.
Trump’s executive order approves the KXL border crossing facility (a 30” diameter pipeline including the first shut off valve or pumping station and appurtenances). This is part of an incomplete project, it is not an “existing pipeline.”
The order says it may be terminated, revoked, or amended at any time “in the sole discretion” of the President. Lawyers may argue about the meaning of “sole discretion” but it looks like Biden has the power to do what he did.
Kenney is fighting for Alberta’s energy industry and the jobs KXL would create
Let’s start with Alberta energy industry. Not one major oilsands producer has issued a press release condemning Biden’s actions.
While TC Energy issued a press release saying it’s “disappointed” and will consider its options, TC Energy’s CEO is not all over the airwaves complaining about being mistreated.
If Biden’s decision was such a big blow to the industry why isn’t the industry standing shoulder to shoulder with Kenney calling Biden out.
Ah, but what about all those lost jobs?
Kenney job loss numbers include American jobs and are overstated. He said 2000 people lost their jobs. TC Energy said it’s 1000, and many of those jobs were in the US.
Kenney said over 59,000 new jobs would have been created. TC Energy said of the 59,000 indirect jobs, only 17,000 were Canadian jobs, the remaining 42,000 were in the US. But hey, Mr Kenney, feel free to start a trade war over American jobs.
It’s Trudeau’s fault
Kenney said Biden wouldn’t have concluded Canada wouldn’t stand up for the industry if the federal (Trudeau) government had responded “with strength” when President Obama refused to issue the presidential permit in 2015.
Stephen Harper was prime minister when Obama rejected KXL’s new route in Jan 2012. Harper was PM when Obama vetoed the GOP bill approving KXL in Feb 2015. Trudeau was elected 2 days before Obama rejected the presidential permit for KXL in Nov 2015.
Harper had three years to bring Obama around. Trudeau had 2 days and by then it was too late. So tell me again which federal government failed to respond “with strength” to Obama’s intransigence.
The kitchen sink
In addition to arguing Biden disrespected Alberta by failing to consult with Canada prior to revoking the permit (this from the man who didn’t consult with Albertans on revoking the Coal Policy, teachers’ pensions, school curriculum, etc.) Kenney said:
- Biden’s climate change concerns are non-existent because the oilsands have reduced carbon emissions intensity per barrel by 30%. True, but total emissions increased by 23% between 2000-2018 due to a 53% increase in activity.
- Canada’s emissions goals are more stringent than Biden’s. Not true. Canada was ahead of Trump’s standards but will fall behind when Biden reinstates the policies Trump gutted, enacts new fuel-efficiency standards, new methane emissions standards, and a new “social cost of carbon” metric as part of the cost-benefit analysis of government regulations. (Meanwhile back in Canada Kenney is trying to kill the federal carbon tax in the Supreme Court of Canada).
- Trudeau should fight Biden as hard as he fought Trump over NAFTA and the steel and aluminum tariffs. The analogy doesn’t fit. Trudeau was not able to stop Trump from renegotiating NAFTA or imposing tariffs, all he could do was negotiate hard to get the best outcome for Canada. There is no room for negotiation with respect to the KXL permit, it’s either revoked or it isn’t.
- If Trudeau fails to act, Kenney will go further on his Fair Deal demands. What’s left? Secession?
Kenney invested $1.5 billion in equity and put up $6 billion in loan guarantees repayable after KXL was completed. KXL is dead. The $1.5B and whatever was drawn against the loan guarantee is gone.
Kenney says he’ll sue for damages or compensation. Legal scholars say he’s unlikely to succeed.
Even if TC Energy succeeded in a NAFTA challenge and Kenney recouped some of his losses, KXL would not be built and all those jobs and oil revenues would not magically reappear.
What really happened
Kenney said he invested in KXL to offset the “political risk” of Trudeau not completing TMX, but he’s also admitted he’s “cautiously optimistic” TMX will be completed. The Trudeau political risk was not real.
Kenney said if he hadn’t invested in KXL the project would have died (so he boldly went where no sane investor would go?).
Kenney invested in an enterprise that was exposed to the risk of an election in a foreign jurisdiction where Democratic presidential hopefuls like Bernie Sanders and Elizabeth Warren were vying with Joe Biden for the leadership of the Democratic party. He placed a $1.5 billion dollar bet that regardless of who became the Democratic nominee, Trump would win the election.
Now that Biden has revoked the presidential permit—both TC Energy and the Building Trades of Alberta union say this was “predictable”—Kenney is desperately looking for someone to blame for his imprudence and hubris.
Well guess what, Albertans may have been distracted by Covid, the revocation of the Coal Policy, and a million other things, but we know Kenney’s bluster is not about the loss of jobs and oil revenues, it’s about the loss of Kenney’s credibility as a prudent financial manager and steward of Alberta taxpayer dollars.
It’s a simple as that.