President Biden’s Executive Orders and Keystone XL cancellation: what impact on Canada?

By Elizabeth Perry - Work and Climate Change Report, February 1, 2021

Incoming U.S. President Biden exceeded expectations with the climate change initiatives announced in week 1 of his term, and many have important repercussions for Canada. The most obvious came on Day 1, January 20, with an Executive Order cancelling the Keystone XL pipeline and taking the U.S. back into the Paris Agreement. Also of potential impact for the Canadian clean tech and auto industries – the Buy American policies outlined in Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers (Jan. 25). On January 27 ( “Climate Day ”), the Executive Order on Tackling the Climate Crisis at home and abroad (explained in this Fact Sheet ) announced a further series of initiatives, including a pause on oil and gas leases on federal lands, a goal to convert the federal government’s vehicle fleet to electric vehicles, and initiatives towards environmental justice and science-based policies. Essential to the “whole of government” approach, the Executive Order establishes the White House Office of Domestic Climate Policy to coordinate policies, and a National Climate Task Force composed of leaders from across 21 federal agencies and departments. It also establishes the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, “to be co-chaired by the National Climate Advisor and the Director of the National Economic Council, and directs federal agencies to coordinate investments and other efforts to assist coal, oil and natural gas, and power plant communities.”

The New York Times summarized the Jan. 27 Orders as “a sweeping series of executive actions …. while casting the moves as much about job creation as the climate crisis.” A sampling of resulting summaries and reactions: ‘We Need to Be Bold,’ Biden Says, Taking the First Steps in a Major Shift in Climate Policy” in Inside Climate News (Jan. 28); “Fossils ‘stunned’, ‘aghast’ after Biden pauses new oil and gas leases” in The Energy Mix (Feb. 1); “Biden’s “all of government” plan for climate, explained” in Vox (updated Jan. 27) ; “Biden’s Pause of New Federal Oil and Gas Leases May Not Reduce Production, but It Signals a Reckoning With Fossil Fuels” (Jan. 27) ; “Biden is canceling fossil fuel subsidies. But he can’t end them all” (Grist, Jan. 28); “Activists See Biden’s Day One Focus on Environmental Justice as a Critical Campaign Promise Kept” and “Climate Groups Begin Vying for Power in the Biden Era as Pressure for Unity Fades” (Jan 21) in The Intercept , which outlines the key policy differences between the BlueGreen Alliance (which includes the Service Employees International Union, the American Federation of Teachers, and the United Steelworkers in the U.S.) and the Climate Justice Alliance, a national coalition of environmental justice groups.

Focus: Cancelling the Keystone XL Pipeline

The January 20 Executive Order halting the Keystone XL pipeline construction was meant to be a highly symbolic break with the previous administration’s policies, as described by Bill McKibben in the New Yorker as “Joe Biden’s cancellation of the Keystone Pipeline is a landmark in the climate fight” . Inside Climate News wrote “Biden Cancels Keystone XL, Halts Drilling in Arctic Refuge on Day One, Signaling a Larger Shift Away From Fossil Fuels” (Jan. 21).

In Canada, the Keystone XL cancellation set off a torrent of reactions – with Alberta’s Premier immediately calling for trade retaliation – summarized in “‘Gut punch’: Alberta premier blasts Biden on revoked Keystone XL permit” (National Observer, Jan. 20) . The federal government held an Emergency Debate on Keystone on January 25, the first day the House of Commons re-convened after Christmas break. Environmental groups, along with social justice groups, First Nations, and the B.C. Government Employees Union, sent an Open Letter to Prime Minister Trudeau and all cabinet ministers on January 26, approving of the Keystone cancellation and stating: “Canada must follow Biden’s lead on Keystone XL and cancel TMX because it directly conflicts with the federal government recently announced climate plan and it does not have permission or consent from affected Indigenous Nations.” An opposite viewpoint was reported in “Keystone XL denial will hurt communities, Indigenous business coalition leader says” (National Observer, Jan. 22). Consistent with the past policies of the construction unions in the U.S. and Canada, Canada’s Building Trades Unions issued a press release expressing deep disappointment in lost jobs as a result of the decision – as did their U.S. counterpart the North American Building Trades Union (NABTU) . (The discord amongst unions over pipeline construction has been long-standing and well documented – for example, in “Contested Futures: Labor after Keystone XL” by Sean Sweeney ( New Labor Forum, 2016.)

What next for Canada, now that Keystone XL has been cancelled?

CBC reports “Trudeau government looks to continental energy strategy in wake of Keystone cancellation” (Jan. 27), which summarizes the unimpressive history of international energy initiatives but strikes an optimistic note because of the new Biden administration. Eric Grenier summarizes the political and public opinion landscape and concludes that “For Trudeau, there’s no political reason to fight for Keystone XL” , and Aaron Wherry expands on that theme in “How political symbolism brought down Keystone XL” (Jan 23). In “Cenovus unveils capital spending plan, confirms up to 2,150 layoffs still targeted” (Jan. 29) the CEO of Cenovus states that while the Keystone XL pipeline cancellation was a “tragedy” for the industry, it wouldn’t affect his company’s ability to move oil and that Biden’s pause on oil and gas leasing, “is probably good for the Canadian oilpatch” . The Cenovus layoffs announced are not related to Biden’s policies but come as a result of its takeover of Husky Energy- Cenovus had already announced it would cut 20 to 25 per cent of its combined employee and contractor workforce (approx. 1,720 and 2,150 workers) in October 2020. 

Warren Mabee wrote in The Conversation Canada (Jan.21) “Biden’s Keystone XL death sentence requires Canada’s oil sector to innovate” – (republished in The Narwhal here ) arguing that Canada and Alberta “need to decide if more pipeline capacity is really needed” and “The future of Canada’s oil sector may not be in volume, but in value” – for example, high value-added products such as plastics, rubber and chemicals. But this is Canada, so pipeline battles will continue: “With Keystone XL cancelled, all eyes turn to Trans Mountain expansion battle” (Ricochet , Jan. 27) and “The cancellation of Keystone XL raises the stakes for Trans Mountain (Globe and Mail Opinion piece, Jan. 26) . David Hughes has written, most recently in October 2020, that the Trans Mountain pipeline capacity is not needed, and on December 8 2020, the Parliamentary Budget Office released a report with the same conclusion. An excellent overview on the status of the Trans Mountain issue appears from the West Coast Environmental Law, and the Dogwood Institute maintains an online petition against TMX here.