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News

Canadian firm exploring Keystone XL revival as Trump returns to White House

CALGARY — A Canadian company is readying a proposal to build an oil pipeline from Alberta to the U.S. Midwest, part of a wider response to Donald Trump’s desire to revive the controversial Keystone XL project and secure cheaper supplies of crude. 

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Canadian firm exploring Keystone XL revival as Trump returns to White House

Calgary energy company Kanata says Indigenous partnerships key to building big-ticket resource projects

By Jesse Snyder
An end-view of segments of steel pipe in a stack with mint-green paint on their outsides and a rusty patina on their insides. There are weeds growing around the pipes and two cylindrical white tanks are standing in the background.
Lengths of pipe stacked in Gascoyne, N.D., for use in the Keystone XL pipeline. They had been sitting there for three years when the photo was taken in April 2015, which was six years before President Joe Biden revoked the permit for the project. Photo: The Canadian Press/Alex Panetta
Dec 10, 2024
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CALGARY — A Canadian company is readying a proposal to build an oil pipeline from Alberta to the U.S. Midwest, part of a wider response to Donald Trump’s desire to revive the controversial Keystone XL project and secure cheaper supplies of crude. 

The U.S. president-elect reportedly wants to resuscitate the US$15-billion Keystone XL on his first day in office, and raised the topic of pipelines with Prime Minister Justin Trudeau during a dinner at his Mar-a-Lago resort in Florida on Nov. 29. Alberta Premier Danielle Smith has been talking with Canadian energy companies about opportunities to expand U.S. oil exports. 

Talking Points

  • Donald Trump reportedly wants to revive the controversial Keystone XL pipeline on his first day back in office
  • Calgary energy company Kanata is preparing to propose such a project, signalling a growing confidence in Canada’s oil patch that a major oil conduit to the U.S. is back on the table 

Kanata Clean Power & Climate Technologies, a Calgary firm with 13 individual shareholders, is looking to capitalize on that receptiveness by building an oil conduit of its own. The company is an ammonia and hydrogen firm that has partnered with Indigenous organizations to build a network of power facilities and pipelines in Alberta, Montana and Wyoming.

The project is currently in the feasibility stage and would face towering regulatory, financing and political hurdles. Yet it underscores a shifting attitude in Canada’s oil patch: After years of environmental policies aimed at speeding the transition from fossil fuels in the U.S. and Canada, Trump’s return—along with the prospect of a Conservative government in Ottawa—is fueling hopes that the sector has a window to expand its market reach. 

Kanata says its pipeline would closely follow Keystone XL’s proposed path, with variations to avoid the “problematic” areas that hindered the original project. Under the company’s early-stage plans, the route would run from northern Alberta to Steele City, Neb., where it would tie into existing pipeline networks and feed into refineries in the U.S. Gulf Coast. 

It would also run alongside a separate hydrogen pipeline that Kanata plans to build that would connect Alberta with Montana and Wyoming, where the company is developing coal-to-gas power plants that will convert the fossil fuel into hydrogen and ammonia.

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Crucially, said Robert Delamar, the CEO of Kanata, the pipeline would be 50 per cent owned by a consortium of Indigenous interests. Alberta’s Frog Lake First Nation is already a partner, and Delamar said Kanata is in talks with as many as five other Indigenous communities in the U.S., which he declined to identify given the sensitivity of the discussions.

Delamar also declined to name a U.S. private equity group that funded Kanata’s feasibility study, which is being performed by Calgary-based AP Dynamics. 

Kanata’s plans, like those of any company that might propose similar ones, are likely to face stiff opposition. 

Calgary pipeline giant TC Energy—the company that set out to build the on-again-off-again Keystone XL—permanently shelved the project in 2021 when U.S. President Joe Biden revoked its permit. 

Katie Stavinoha, a spokesperson for South Bow, TC Energy’s oil pipeline spinoff, did not directly respond to The Logic’s questions about whether the company was considering restarting Keystone, but said it generally “supports efforts to transport more Canadian crude oil to meet U.S. demand.” 

The original project met lengthy state-level regulatory delays, and faced years of fierce pushback from Nebraskan ranchers and farmers and environmental groups. Future U.S. presidents could kibosh the project at any time. 

“We’re not blind to the obvious realities of the difficulties here,” Delamar said in an interview. “We believe we have an advantage and will succeed because it’s an Indigenous-owned project. The second point is that there is political will on both sides of the border to make this happen right now.” 

Industry and government recognition that Indigenous people ought to have meaningful equity stakes in projects distinguishes new proposals from past fossil fuel development, he added. 

“The people with the rights and title to that land since time immemorial, they decide whether or not they want a pipeline in their backyard—and if they don’t there’s no project,” Delamar said.  

In its last budget, the federal government laid out $5 billion in loan guarantees that First Nations groups can tap to take financial stakes in projects, including fossil fuel developments.

Some Indigenous communities have bought stakes in energy projects or shown an eagerness to do so, but not without complications. TC Energy’s plans to sell a $1-billion minority stake in its NGTL natural gas network to 72 First Nations, for example, hit snags this year over financial structuring issues. 

Kanata is also making its move as the global posture toward fossil fuels is shifting, with nations placing greater emphasis on energy security. Confidence in replacement technologies like EVs has faded amid slower-than-expected demand. 

Russia’s invasion of Ukraine in particular put a new priority on securing oil and gas supplies from allied nations, said Stockwell Day, the former Treasury Board president under Stephen Harper and a co-founder of Kanata. 

“There’s been a dramatic change geopolitically in the last four years [from] when the Biden administration cancelled the Keystone project,” he said. 

Day will lead political outreach on the project, while former Morgan Stanley banker Jeremy Friesen will head Kanata’s U.S. division. Joe Dion, CEO of Frog Lake Energy Resources and a former grand chief for Alberta, will lead the joint venture’s First Nations outreach efforts. 

Delamar said Kanata is in discussions with several U.S. pipeline companies as potential operators of the project, but declined to identify them. Kanata is already working with Texas-based Crescent Midstream on two separate carbon dioxide pipeline developments in Montana and Wyoming.

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The coal-to-gas facilities Kanata plans to build in Wyoming and Montana will be equipped with carbon-capture and storage technology to reduce emissions. Carbon dioxide will be gathered from the plants’ exhaust systems, then transported via a pipeline to an injection site and stored underground.

Kanata said the oil pipeline would likely use 36-inch diameter pipe and carry 830,000 barrels-per-day of capacity—precisely the same volume as Keystone’s. 

#climate #Donald Trump #economy #Keystone XL #pipelines #Stockwell Day #TC Energy

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An end-view of segments of steel pipe in a stack with mint-green paint on their outsides and a rusty patina on their insides. There are weeds growing around the pipes and two cylindrical white tanks are standing in the background.

Photo: The Canadian Press/Alex Panetta

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