BILLINGS, Mont. -- The sponsor of the Keystone XL crude oil pipeline pulled the plug on the contentious project Wednesday 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, Neb.
Construction on the 1,200-mile 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 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 had objected to the move, although officials in Alberta, where the line originated, expressed disappointment in recent weeks that Trudeau didn't push Biden harder to reinstate the pipeline's permit.
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Port of Little Rock tenant Welspun Tubular LLC won an order in 2020 to produce more than 1 million feet, or 190 miles, of 36-inch pipe for the Keystone project. The purchase allowed Welspun to avoid a major reduction in its 600-person workforce, company officials said. The work on that order stopped when the permit for the pipeline was canceled.
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 American Indian 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.
The province had hoped the pipeline would spur increased development in the oil sands and bring tens of billions of dollars in royalties over decades.
Climate change activists viewed the expansion of oil sands development as an environmental disaster that could speed up global warming as the fuel is burned. That turned Keystone into a flash point in the climate debate, and it became the focus of rallies and protests in Washington, D.C., and other cities.
Environmentalists who had fought the project since it was first announced in 2008 said its cancellation marks a "landmark moment" in the effort to curb the use of fossil fuels.
"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 including Arkansas had sued to overturn Biden's cancellation of the 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.
Tester said in a statement Wednesday that he was disappointed in the project's demise, but made no mention of Biden.
Wyoming Sen. John Barrasso, the top Republican on the Senate energy committee, was more direct: "President Biden killed the Keystone XL Pipeline and with it, thousands of good-paying American jobs."
A White House spokesperson did not immediately respond to a request for comment on TC Energy's announcement.
