About that $15 Billion Keystone Lawsuit...

A fundamental need in a capitalist society is the certainty that if you follow the rules and win approval for a very expensive project designed to meet demonstrated needs, you are entitled to carry through with it. His first day in office  President Biden signed an executive order revoking the Keystone XL pipeline permit. This act inserts an extraordinary, banana-republic monkey wrench in the need for procedural certainty. No one will invest the sort of money and effort into needed projects if on no more than a whim to assuage the most extreme of his supporters the president can cancel the permit.

So it is no surprise that there is now substantial litigation to  declare the order unconstitutional and unlawful and prevent any enforcement of the permit revocation. Add to those cases, a new twist: Keystone owner TC Energy  is taking the matter before NAFTA arbitration panel. It takes a bit of explanation to understand the different kinds of litigation strategies but no explanation to understand how important it is to protect investments -- domestic and cross border.

To ruin economy, choke here.

TC Energy invested $9 billion in a pipeline designed to carry 830,000 barrels of crude oil from Canada and Montana to the U.S. Gulf Coast refineries. The same crude can, of course, be transported on trains, trucks and ships , but that will require greater use of carbon energy and entail higher risk of spills. The pipeline will also provide thousands of jobs.

Doubtless this energy trade-off, the employment opportunities (five of the six counties in Montana through which the pipeline would pass have been designated as high-poverty areas) and the need for the end product formed a significant part of the basis for issuing the permit to build the pipeline. The permitting process  took years, money and effort. Among other things the proposed project had to pass a number of environmental reviews before the  U.S. State Department in 2017 issued a presidential permit for the pipeline to proceed.

On his first day in office, Biden issued an executive order (Executive Order 13990) revoking the permit. The company was not afforded a hearing before the revocation nor any opportunity to present its case. This is in contrast to the proceedings before the permit was issued when the State Department, solicited and received comments from “members of the public, various federal and state agencies and various Indian tribes” and weighed the impact of the pipeline  on the environment and anything covered by the  Endangered Species Act.

At last look 23 states are suing the administration  in litigation initiated by Montana and Texas. The suit seeks to have those portions of the E.O. revoking the permit declared unconstitutional and  relief preventing any action to enforce the permit’s revocation. More recently, Keystone owner TC Energy filed a Notice of Intent to take legal action against the government, indicating the revocation of the permit constituted a “breach of the United States’ free-trade obligations and is seeking $15 billion in damages. 

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As the Wall Street Journal explains:

The U.S. has never lost before a NAFTA arbitration panel. But TC Energy (formerly TransCanada) has a good case. To prevail, TC Energy will have to show that it had good reason in March 2020 to believe that its $9 billion investment was protected by the U.S. permit when it announced that it would “proceed with construction.” In other words, that it had a logical expectation it would be allowed to complete the pipeline and operate it. After years of environmental and other reviews, that was a reasonable conclusion. Mr. Biden’s reversal on his first day in office was also irregular. Normally a company would have a chance to make its case, and the Administration would engage in a review. But Mr. Biden wanted theater for the environmental lobby, which trumped respect for an investor’s right to be treated fairly.

What makes this case so interesting is that it I believe it is the first one to work around the decision by former U.S. Trade Representative Robert Lighthizer. Lighthizer considered the NAFTA investor-state dispute mechanism a subsidy for American firms investing abroad and he killed this mechanism in the United States  Mexico Canada Agreement (USMCA). Fortunately for TC, the USMCA has a “legacy” investment provision and that’s what the company is banking on in this litigation. Under that provision investments that predate the entry into force of the USMCA “remain subject to NAFTA for three years.” President Trump signed the USMCA into law on January 29, 2020 and it took effect of July 1, 2020, so the case seems to fall squarely within the time limit in which to invoke legacy claim under the new USMCA.

What, me worry?

Despite TC’s good chance to prevail, the NAFTA arbitration feature should be returned in full force beyond three years in an amendment to the USMCA . If not,  we are likely to see more cases of expropriation of  developers’ property rights in those cases without redress, upon the whims of whomever sits in the Oval Office, with very unpleasant investment and international consequences.

Keystone Pipeline Firm Sues Feds for $15 Billion

Back when Biden cancelled the Keystone XL pipeline, we mentioned the possibility that TC Energy, the Canadian energy firm which owned and operated Keystone, might ultimately sue the U.S. government for damages. Well it looks like they're going to do just that:

In a statement on July 2, [TC Energy] said it had filed a notice of intent with the State Department to begin a legacy North American Free Trade Agreement (NAFTA) claim under the U.S.–Mexico–Canada Agreement. The company said it aims to “recover economic damages resulting from the revocation of the Keystone XL Project’s Presidential Permit,” adding that it suffered a loss of more than $15 billion “as a result of the U.S. Government’s breach of its NAFTA obligations.”

Killing the XL has meant the loss of thousands of jobs on both sides of the border; it has meant that oil and natural gas is now being transported by rail, which is both more dangerous and more carbon intensive, and now it might end up costing American taxpayers a few billion dollars. Who, exactly, has benefited from this idiotic move?

Oh, right -- the activists.

 

Who Misses the Energy Crisis? Joe Biden Does

The regulatory and policy changes of the Trump Administration led to unparalleled job growth and national prosperity. We suffered through  the dark Carter years of interrupted energy supplies, higher fuel costs, and long lines at gas stations, at the mercy of oil rich Middle Eastern countries and emerged in daylight to the Trump created energy independence we had sought for decades.

Now the Biden administration has rapidly signaled that it intends to undo those policies, impoverish us, jeopardize our security, increase energy costs, end millions of jobs, strip poor states of needed tax revenue, and hand China yet more economic gains at our expense.

John Kerry, owner of private planes, a substantial auto fleet, and two yachts was ludicrously named our “Energy Czar” and even he admits these policies will not reduce emissions. How effective these policies and programs will be depends on how much pushback there will be against this turnabout, but there are signs that  judicial and congressional challenges are already underway, and much of these actions were undertaken just to pay off the ill-informed greenies and not for any environmental benefit.

The country's in the very best of hands.

In the short time he’s been Commander in Chief, Biden has taken some 42 executive actions, including signing at least 24 executive orders. Most are so ludicrously unrealistic, I assumed former bartender Alexandria Ocasio- Cortez drafted them, and indeed AOC is delighted, saying they are just like the Green New Deal she’s been promoting. A great many of these will limit energy production and our domestic industrial base.

They will also increase consumer costs on everything, at a time when the China virus-related income and employment losses are being felt, particularly among the least wealthy, working class Americans who had begun to prosper during the early Trump years.

The most significant of these acts are rejoining the Paris climate agreement, pausing new oil and natural gas leases on public lands or in offshore waters pending comprehensive review and reconsideration of such permitting and leasing practices, killing the Keystone XL project, and tossing out the cost-benefit analysis for regulatory actions. These actions and orders will face significant challenges. I predict a bonanza for energy lawyers is in the making.

Last year, President Trump offered these leases in Alaska and California. Winning bidders were challenged in Alaska and a federal court refused to halt them determining they were authorized by federal law. It’s hard to see how the government can rescind those leases without compensation to the winning leaseholders. (Of course, they can impose strictures or delay permitting but the companies involved have enough practice in such matters to navigate the lengthy and costly regulatory process for which consumers ultimately will bear the price).

It’s of no small matter that West Virginia senator Joe Manchin was just named by senator Chuck Schumer to head the Senate Energy and National Resource Council. As a senator from a coal-producing state, he is unlikely to share the same distaste for fossil fuels as the New Yorker Ocasio-Cortez. Schumer felt compelled to give Manchin this important committee assignment because of his own slim majority and concerns that Manchin might be considering crossing the aisle. I expect Manchin to provide some check on the Green New Deal nonsense.

Aside from the existing judicial constraints and the likely role of senator Manchin, there are a number of Congressional opponents on both sides of the aisles to contend with. Congressman Steve Scalise (R-La.) and Yvette Harrell (R-NM.) are demanding that Biden rescind the moratorium on drilling and leasing activities on federal land. Democrats Vincent Gonzales (D-Tex.), Henry Cuellar (D-Tex.), Lizzie Fletcher (D-Tex.), Marc Veasey (D-Tex.) demand the order be rescinded, noting it would devastate New Mexico, spike fuel costs, cost as many as one million jobs and decrease U.S. GDP by $700 billion, reduce critical energy supplies, weaken national security and embroil the Interior department in litigation for failure to meet statutory requirements to hold lease sales.

It’s not only energy producers and distributors involved, of course: aside from direct energy jobs, a moratorium on coastal extractions would cost the high paying jobs in water management and coastal restoration, as Sen. John Kennedy of Louisiana pointed out. Six state attorneys general are threatening a lawsuit over the moratorium -- they represent West Virginia, Arkansas, Indiana, Mississippi, Montana, and Texas. 

President Trump withdrew us from the Paris agreement, which had been entered into by President Obama without Congressional approval. It’s a ludicrous globalist folly which if followed (which Europe has not actually been doing) only would impoverish the U.S. and the rest of the Western industrial countries while leaving China and India to spew carbon emissions unchecked, with the result that there will be no diminution of these, even assuming they have a deleterious impact on climate (a debated proposition).

Acting under that agreement, Obama imposed a number of regulations on power plants and oil and gas production and delivery. These rules never took effect because they were either tied up in court or repealed and replaced by the Trump administration or dismissed by the courts as unlawful. Under the Trump EPA, final rules cost-benefit analyses must be conducted for all future rules. The Biden administration appears intent to scrap this requirement under the rubric “Modernizing Regulatory Review," but I don’t foresee that regulatory requirements can be altered without a lengthy procedure.

Even if they succeed at that, they have another hurdle to overcome. The Trump EPA locked in for five years current ozone and particulate matter standards and to alter these standards under the existing EPA rule there must be independent peer review of the pivotal science and identify the research the agency relied on to make the rule. The incoming administration may, in sum, institute new rules, but it can expect significant challenges along the way to enforcement. And you can expect that companies which have long lead times and have expended great sums and effort to comply with the existing regulations are not likely to easily and without challenge accept more stringent ones.

Retour a Paris?

It certainly will not help sell the Agreement when Green Czar Kerry dismisses the job losses that will follow by saying “those folks[can have] better choices,” adding, “they can make solar panels.” It’s condescending and, of course, it ignores that these panels are almost all manufactured in China (about 60 percent of the supply chain and three-quarters of the material used to make solar cells). It also grossly exaggerates the number of jobs available in installation of solar panels or maintenance of windmills. In 2019 there were 7,000 wind turbine technicians and 12,000 solar installers, a far cry from the thousands involved in conventional fuel production and distribution.

Facts are for little people -- bean counters -- not big thinkers like Kerry and Ocasio-Cortez. As if the "czar" hadn’t said enough to scotch the deal, he added the U.S. had to “pay through the nose and lose jobs to ensure other countries reduce their emissions.” Congresswoman Lauren Boebert (R-Colo.) has introduced a bill to block reentry into the Paris agreement until it receives Senate confirmation. She already has eleven GOP cosponsors.

I expect more will join her and I wouldn’t be surprised if a constitutional challenge in court will follow any further effort to rejoin the Agreement. It’s a treaty by any fair reading and the Constitution compels treaties be affirmed by two-thirds of the Senate (Article II, section 2). The question is, will the Democrats care?

Which way, Senator Manchin?

Joe Manchin, chairman of the Senate's Energy and Natural Resource committee, has sent an open letter to Joe Biden imploring him to reverse his Keystone XL pipeline decision. That letter begins:

I am writing to express my support of responsible energy infrastructure development, including of oil and natural gas pipelines. Pipelines continue to be our safest mode to transport our oil and natural gas resources, and they support thousands of high paying, American union jobs. To that end, I encourage you to reconsider your decision to revoke the cross border permit for the Keystone XL pipeline and to take into account the potential impact of any further action to safety, jobs, and energy security.

Manchin goes on to argue that increasing our environmentally safe pipeline infrastructure (which, he explains, have "a 99.999% safety record," much better than oil shipped by rail or highway) should be at the very heart of Biden's "Build Back Better" economic recovery plan, because it keeps "Americans working while strengthening North American economic and energy security." Indeed, the great benefit of Keystone XL and other pipeline projects is that they "maintain[] that energy security through strategic relationships with our allies rather than increasing reliance on OPEC nations and Russia."

This intervention is notable. The last of the Blue Dog Democrats, Manchin represents the now-heavily Republican (and resource heavy) state of West Virginia. A former governor of that state, Manchin's margins of victory have shrunk in each of his senate races, and in 2018 he only won by about three percentage points. His next election will come during a presidential year, and in 2020 the Republican presidential candidate carried West Virginia by almost forty points. If he wants to be reelected, he will have to start getting some results.

Aware of the above realities, minority leader Mitch McConnell is no doubt courting Manchin heavily, in the hopes that he will cross the aisle and a 50-50 senate will be controlled by the GOP once more. Will letting Manchin keep the Energy committee chairmanship (over ranking Republican John Barrasso of Wyoming) be enough? Maybe giving him the Interior subcommittee (over Alaska's Lisa Murkowski) as well? Both seem doable.

At the same time, there is something to be said for being a senator from the president's own party. The real possibility that he could flip (as Jim Jeffords did in 2001, moving from the GOP to Independent and voting with the Democrats, thus ending the tie) makes him the most important senator for the White House's hopes of implementing some form of the new president's agenda, and he knows it. Manchin has already been throwing his weight around, vowing that he will not be the fiftieth vote in favor of "the Green New Deal or socialism," giving McConnell his word that he won't let his party nuke the filibuster, and voicing his opposition to further $2,000 stimulus checks for all Americans.

Still, if Biden wants to keep Manchin on his side, he'd better give him a few substantive wins that he can point to back home. Because if not, Biden's unmerited triumph in Georgia (which saw Republican own goals turn the senate blue) will have been wasted. Taking Manchin's letter seriously would be a good place to start, if not with Keystone, perhaps with other, less conspicuous pipeline projects going forward.

If not, well, he'd look pretty good in a red jersey.

Whither Alberta—and the Rest of Canada?

It was a good deal all around. The Keystone XL pipeline, which “adds a branch connecting terminals in Hardisty, Alberta, and Steele City, Nebraska, through a shorter route using a larger diameter pipe,” was the safest and most efficient way to ship crude oil in measures of scale—some 830,000 barrels a day—to the United States. Its cancellation was Joe Biden’s first official act. At least 10,000 American jobs will be lost and another nail has been hammered into that territorial coffin called Alberta. A good deal for the time has become a bad prospect for the future.

The consensus is that Biden, following in the footsteps of Obama, is catering to his woke-progressivist base and its environmental extremism by deep-sixing America’s energy industries in favor of expensive and unreliable Green technology. Donald Trump Jr. has a different or collateral explanation for Biden’s precipitous action. It is a gift to Warren Buffet and other Democratic Party donors.

Expanding on the younger Trump's take, Lorie Wimble explains,

Their methods of transportation, from rail lines to semi-trucks, benefit from the diminished effectiveness of the pipeline. The oil will still come, but now it will have to be transported less efficiently and at higher cost to consumers… Blocking Keystone XL has nothing to do with the environment and everything to do with leftist megadonors.

Interestingly, climate change activists have tended to grow comparatively silent now that their president has promoted an energy alternative which is clearly more harmful to the environment than any conceivable state-of-the-art pipeline.

As NOQ notes,

Proponents championed [sic] that Keystone XL was going to be the cleanest pipeline project ever constructed while creating thousands of high-paying jobs. TC Energy partnered with four labor unions that would have generated $2 billion in earnings for U.S. workers. Plus, the company worked with five First Nations groups regarding equity.

But that still wasn't enough. The report goes on to point out that beyond a "black eye to the Trudeau government," this is "significant blow" to Jason Kenney's United Conservative Party. Kenney's government "invested $1.5 billion of taxpayer dollars in the project, plus about $6 billion in loan guarantees, to ensure KXL would be completed." Saskatchewan is also in the pickle jar, but Alberta is far deeper in the brine.

Canada’s PM Justin Trudeau has expressed pro forma “disappointment” with the cancellation, but Rex Murphy, Canada’s premier conservative columnist, does not see the debacle as a  “black eye” for Trudeau. Far from it. He suggests that the "honour' of Trudeau receiving Biden's first phone call as president is a "diplomatic quid pro quo perhaps for not making any noise over the slashing of Alberta’s prime industry.” Murphy poses the question of the hour to the rest of Canada:

Justin, it's for you.

If you allow the savaging of our economy, if you ignore what we in Alberta have contributed to you during the good times, if you side with rabid environmentalism, pour on carbon taxes and fuel emission standards, if you bar every effort to build even one damn pipeline: Why are we in this thing?”

He concludes: “And you know what ‘this thing’ refers to.”

This thing, of course, is Confederation, and although Murphy does not use the word, the only option, in the absence of a complete “re-imagining” of the country along fair and rational lines, is secession. For the situation in which Alberta now find itself cannot go on indefinitely. If a reasonable accommodation with the federal government is not forthcoming, a tectonic shift in political and national alignments will become necessary. 

There will be many problems, of course. As I’ve written before, there are too many Canadians and not enough Albertans in the province; the ratio will have to change and a Wexit party will have to replace the current, pro-federalist Conservative administration. Perhaps a third of the population is puckered for divorce, which is a promising start. But if Alberta follows the Quebec model, secession will take 50 percent plus 1. Time is running out.

Another major issue is the fact, as Murphy points out, that Alberta is landlocked. It would need to run an “independent” pipeline to tidewater, clearly through the adjoining province of British Columbia, for which approval may not be readily forthcoming. But Alberta wields a powerful bargaining chip. It is the land bridge from Eastern Canada to the Pacific Ocean which, if blockaded, would lead to economic tribulation for the country as a whole. A trade-off with British Columbia is far from inconceivable. In fact, it seems more than likely.

There is yet another significant political development to consider, one which has international ramifications. I refer not only to the perennial struggle between the radical Left and the conservative Right, which is embedded in history and is a function of the human psyche, but to its current instantiation. The seismic conflict we are now witnessing involves two great socioeconomic forces arrayed against one another for political dominance across the planet. These may be described as the movement for one-world hegemony, as per the Great Reset and UN Agenda 2030 on the one hand, and the rise of national movements on the other, in other words, Globalism against Populism. 

The former conceives itself as universal, the latter as revanchist. The former is proposed and backed by a coalition of billionaires, technocrats and political elites, the latter by ordinary people and patriotic citizens who feel disenfranchised and coerced. The Global orientation envisions the elimination of private property, the curtailment of private transportation, surveillance of entire populations, and top-down dirigiste control of subservient nations. The populist revolution, in contrast, envisages local autonomy for peoples that recognize a common heritage and tradition, that defend the principles of free speech, religious belief, and assembly, and that demand political and economic control of their own affairs. The Global initiative advances the belief in “climate change” and the necessity of expunging the fossil-fuel energy industry at whatever cost. Populism believes it can balance economic benefits with environmental concerns.

The conflict is heating up as we speak. At the same time that the Globalist phenomenon is being enacted by a pluto-techno cabal with its headquarters in Davos, populist sentiment is erupting in many different locales around the world—Scotland, Spain/Catalonia, the U.K. (Brexit), the U.S. (Texit), and elsewhere. According to the Institute for Global Change, “Between 1990 and 2018, the number of populists in power around the world has increased a remarkable fivefold, from four to 20. This includes countries not only in Latin America and in Eastern and Central Europe—where populism has traditionally been most prevalent—but also in Asia and in Western Europe.

Within the present Canadian context, the federal perspective under Justin Trudeau is Globalist, heavily influenced by the Great Reset and what its main proponent Klaus Schwab calls the “fourth industrial revolution.” The Wexit movement in Alberta is plainly populist, consisting, in the words of the Institute for Global Change, of “hard-working victims of a state run by special interests and outsiders as political elites [who are seen] as the primary enemy of the people.”

Alberta for the Albrtans.

In the war between these two world-historical forces, global hegemony and local sovereignty, the Great Reset and nationalist populism—assuming nothing changes—Alberta will have to choose. If it goes the route of separation, it stands to reason that the rest of the country may begin to break up into several states, comprising the Maritime provinces, Newfoundland and Labrador, Quebec, Ontario/Manitoba, British Columbia, and the three northern territories, Nunavut, Yukon and Northwest Territories, combining as a single federation.

In my estimation, Canada was never a coherent, overarching polity; the fault lines were always evident, incised by competing regional visions and needs, power imbalances, economic disparities and profound linguistic strife. Its eventual disintegration was probably foreordained. The break between the Eastern elites and the Western heartland is likely irremediable. There is certainly little sympathy in the rest of the country for Alberta’s plight. A recent Angus Reid poll shows that Alberta (and Saskatchewan) “will be fighting the battle to save the Keystone XL pipeline project on their own as the rest of Canada says it’s time to move on.”

Without the energy resources and capital generated by Alberta (and Saskatchewan), one wonders where the rest of the country can move on to? A Fraser Institute study finds that transfer payments make up over 27 percent of Atlantic Canada’s GDP, and that Alberta, with a diminishing tax base and a growing deficit, has financed most of the funds going to the Atlantic provinces and to Quebec. A myopic Canada does not understand that you can’t squeeze money from a dry well or that money does not drop from turbine blades.

In any event, given a Liberal-Marxist administration, a Leftist and parasitic New Democratic Party, a fantasy-driven Green Party, and a feckless Conservative Party that has sold its birthright as an electoral strategy, the choice would seem to me inevitable.

Joe Biden's Climate Nirvana -- and Ours

Since Washington was locked down on inauguration day, President Joe Biden was free to spend his first day in office signing stacks of Executive Orders rather than attending the more traditional inaugural parades and balls. The object of these orders was, of course, to undo as much as possible everything the outgoing president, Donald Trump, had accomplished over the past four years.

Executive actions on climate and energy unsurprisingly dominated the first day’s to-do list. Since getting the U.S. out of the Paris climate treaty was Trump’s most consequential deregulatory action, it was fitting that Biden’s first signature was on a letter notifying the U.N. that America would be rejoining it.

Next, he signed a lengthy executive order that, among much else, canceled the permit for the mostly-completed Keystone XL pipeline, which would transport oil from Alberta’s oil sands to Gulf Coast refineries. Canceling Keystone immediately threw up to 11,000 well-paid construction workers out of their jobs. The trades union leaders who had endorsed Biden expressed their outrage, but the fact is that most of their members voted for Trump.

You got what you voted for, America.

Biden also ordered all government departments “to immediately commence work to confront the climate crisis,” and directed that all deregulatory actions on fossil fuel energy use and production taken by the Trump administration be reviewed with an eye to suspending and rescinding them.

The order re-instated the application of the “social cost of carbon” (an entirely speculative and largely fanciful cost estimate of the impact of adding one ton of carbon dioxide to the atmosphere) in regulatory decision-making and abolished Trump reforms aimed at speeding up the environmental permitting processes that are routinely used to delay politically incorrect energy and natural resources projects to death. For example, major hardrock mining projects that take two to four years to permit in Canada or Australia routinely take over ten years in the U.S.

On January 27 the White House held a "Climate Day," which included a major speech by the new president. It began, "Today is 'Climate Day' at the White House and—which means that today is 'Jobs Day' at the White House." The speech focused on two selling points aimed at two uneasy partners in the Democratic Party coalition—trades unions and the Woke left.

It turns out that addressing the climate crisis requires creating “millions of good-paying union jobs” in building the new green infrastructure. One imagines that these jobs will be much better than those created by the free market because they will be guaranteed and subsidized by government.

At a press conference after Biden’s speech, John Kerry, special presidential envoy for climate, was asked about people losing their jobs in fossil fuel industries as a result of the administration’s agenda. Kerry’s reply was predictably tone deaf:

What President Biden wants to do is make sure those folks have better choices, that they have alternatives, that they can be the people to go to work to make the solar panels.

Implied, but unacknowledged, was the fact that they first have to lose their jobs in order to access these "better choices."

Hitting Kerry in a bad place.

For the woke left, Biden offered something called "environmental justice." While it’s not clear exactly what the term means, the intended audience is a broad one:

With this executive order, environmental justice will be at the center of all we do addressing the disproportionate health and environmental and economic impacts on communities of color—so-called “fenceline communities”—especially those communities — brown, black, Native American, poor whites.

Several specific decisions were also announced during Climate Day, including a moratorium on new oil and gas leasing on federal lands and offshore areas (which account for nearly one-quarter of U.S. oil production).

In addition to these announcements, there was much speculation in the media about other planned actions. Most notably, the New York Times reported that the Federal Emergency Management Administration (FEMA) was planning to take three to ten billion dollars out of their reserves meant for dealing with disasters such as  hurricanes and spend it on preparing for the impacts of "climate change." Possible projects include constructing sea walls to safeguard against rising sea levels (the current rate is between 7 and 14 inches per century).

But most importantly, Biden made it clear that the entire executive branch is going to be organized around addressing climate: "It’s a whole-of-government approach to put climate change at the center of our domestic, national security, and foreign policy." His executive order officially declares a "climate crisis." A climate office or program is being installed in every federal department and agency.

Or maybe it can.

All this activity requires a lot of new high-level staffing at the White House as well. In addition to Kerry, Gina McCarthy, former administrator of the Environmental Protection Agency under Obama and then president of a major environmental pressure group (the Natural Resources Defense Council, which had $173 million in income in 2018), has been named National Climate Advisor, with the same rank as the National Security Advisor.

McCarthy will be head of the White House Climate Policy Office and also oversee a National Climate Task Force. When Biden introduced McCarthy near the beginning of his Climate Day speech, he off-handedly let the cat out of the bag, saying “And Gina—you run everything, Gina."

The next step may be to declare a National Climate Emergency and invoke a wide range of special emergency authorities given to the president by Congress. This would allow the president to commandeer large parts of the economy not currently under government control.

It’s going to be a long, long way to climate nirvana, but we can next look forward to an undoubtedly scintillating international Climate Leaders’ Summit hosted by the United States. The White House has scheduled the summit for Earth Day, April 22, which appropriately would be the 151st birthday of Vladimir Lenin, the patron saint of national economic overhauls. No word, yet, on whether that's intentional.

On Keystone, Trudeau Folds While Kenney Fights

In the wake of President Joe Biden's executive order killing the Keystone XL pipeline extension, Canadian prime minister Justin Trudeau issue a statement saying that he was "disappointed but acknowledge[s] the President’s decision to fulfil his election campaign promise on Keystone XL.” Which is to say, he folded.

Alberta Premier Jason Kenney, meanwhile, is going on offense, and he's trying to provoke the Prime Minister into following his lead. Kenney has been making the rounds on American television, pointing out that the U.S. and Canada have "the biggest bi-lateral trade relationship in world history," and that "the biggest part of that trade is Canadian energy exports." He continues,

We ship about, nearly $100 billion worth of energy to the U.S. every year. Keystone XL would have been a significant safe, modern increase in that shipment. It is very frustrating that one of the first acts of the new President was, I think, to disrespect America’s closest friend and ally, Canada. And to kill good-paying union jobs on both sides of the border and ultimately to make the United States more dependent on foreign oil imports from OPEC dictatorships. We don't understand it.

Kenney's been hammering away at the official account of this cancelation so that the shapers of Canadian opinion like the CBC can't just settle on a win some/lose some narrative, and then go back to cheering on Biden for not being Trump. For instance, here's Kenney at a press conference after Biden's E. O. was signed:

Let's be clear about what happened today: The leader of our closest ally retroactively vetoed approval for a pipeline that already exists, and which is co-owned by a Canadian government [the province of Alberta], directly attacking by far the largest part of the Canada-U.S. trade relationship, which is our energy industry and exports. The portion of the Keystone XL pipeline that crosses the Canada-U.S. border between Montana and Saskatchewan was installed last summer. It was built following a decade of rigorous environmental analysis and approval.... This decision was made without even giving Canada the opportunity respectfully to make the case for how Keystone XL would strengthen U.S. nation and energy security, how it would bolster both economies, and how our two countries could find a path together on climate and environmental policy.... That's not how you treat a friend and an ally.

Most pointedly, he's called out Trudeau's handling of the whole affair, and couching it not in the language of lazy partisanship we're so familiar with, but in the language of patriotism and duty. He's challenged the PM to do his job and fight for Canada. For an example, this letter Kenney wrote to Trudeau:

By retroactively revoking the permit for this project without taking the time to discuss it with their longest standing ally, the United States is setting a deeply disturbing precedent for any future projects and collaboration between our two nations. The fact that it was a campaign promise makes it no less offensive. Our country has never surrendered our vital economic interests because a foreign government campaigned against them....

We must find a path to a reconsideration of Keystone XL within the context of a broader North American energy and climate agreement.... Should that not happen, the federal government must do more than express disappointment with the decision.... I strongly urge you to ensure that there are proportionate economic consequences in response to these unfair U.S. actions.

Kenney's appeals to Trudeau's patriotism are admirable, but unlikely to hit home. Justin is, ultimately, a post-national man, and so loath to come to blows with the new, respectable Leader of the Free world. He would, no doubt, prefer the economic boost of the pipeline as a boon to his own reputation but not having to make a tough decision which could alienate either Canadian voters or the environmentalist left might be good enough for him. It's certainly in character.

Trudeau's Pipeline 'Weak Sauce'

Well, it looks like the Trudeau Government is throwing in the towel on the Keystone pipeline. On Wednesday evening the Prime Minister released a statement saying “We are disappointed but acknowledge the President’s decision to fulfil his election campaign promise on Keystone XL.” Ben Woodfinden is exactly right:

As I mentioned earlier in the week, Trudeau's initial approach was to argue that Biden's anti-climate change instincts were admirable but misguided, since the project had addressed the issues which most troubled environmentalists at the outset. It seemed as though Trudeau was attempting to employ his own green bona fides to give Biden cover to back down on Keystone, but to no avail. So, as in the case of Pfizer's failing to deliver Canada's contracted vaccine doses, Justin has decided to just put up his well-manicured hands and say, in essence, 'We're a small country, what can I do?'

Never mind that Canada's unemployment and labor participation rates are down, and the jobs Keystone XL generates for the resource sector are desperately needed.

Source: Statistics Canada

Trudeau would do well to remember the old saying, '[W]hen America sneezes, Canada gets a cold.' Both countries have weathered the lockdowns better than one would have thought back in March. That's why they are still going on (even if some of their most ardent apologists have started to back away from them).

But they've only done so well by taking on enormous amounts of new debt, the bill for which will begin to come due sooner than anyone thinks. This will no doubt cause serious problems for the U. S., but America's sheer size and its extremely diverse economy will provide a cushion that the smaller and resource-dependent Canada just won't have.

So what should Trudeau do? Well, some of the aggressiveness he showed when America's last president put a ten percent tariff on Canadian aluminum (part of a push which led Trump to drop the duty a month later) would be welcome. Of course, Trump was not a CBC-approved American the way Joe Biden is, and consequently Trudeau would have to expend real political capital -- perhaps more than he has -- to similarly fight for his nation's interests.

A more realistic hope might be for his making a sustained case for Keystone XL as beneficial for both of our countries at a time of real economic distress. The Heartland Institute's Steven Milloy has a good brief against Biden's Keystone cancellation which lays out many of the points that Trudeau could make. After establishing that the environmental effects of Keystone XL would be negligible, Milloy explains that,

According to the U. S . Chamber of Commerce, the Keystone XL will:

Consequently, for Milloy, "the revocation of the Keystone XL permit will be the exaltation of imaginary global climate benefits over real ones to U. S. workers and communities." Needless to say, the same could be said on the Canadian side.

Unfortunately, it seems as though Trudeau has officially folded. TC Energy -- which owns the pipeline -- have already announced a halt on construction and thousands of layoffs. More's the pity.

Biden to Execute Keystone Pipeline via E.O.

The Biden campaign's strategy was to hide their candidate in the basement while letting a fawning press make the case for him as president. This case was short on substance and long on impression, particularly the impression that the former V.P. is a moderate, working-class guy and a statesman who would restore America's reputation in the world and restrain the Bernie Sanders/Elizabeth Warren/AOC wing of the party.

Well, with the election over Biden's priorities are starting to become clear. They are anything but moderate and, insofar as they unnecessarily antagonizing one of our closest allies, neither are they statesmanlike.

This past weekend a memo written by incoming chief of staff Ron Klain was released which outlines the executive orders Biden plans to implement immediately upon taking over the White House. Highlights on this list -- which the Associated Press calls "a 10-day blitz of executive actions... to redirect the country in the wake of Donald Trump’s presidency without waiting for Congress" -- include immigration reform; a national face mask mandate (mandating that they be worn on all federal property and "during interstate travel," whatever that means in practice); and an extension of the moratorium on evictions and foreclosures and the "pause" on student loan payments.

Among the memo's most consequential items is the bullet point which reads "Roll back Trump enviro actions via EO (including rescind Keystone XL pipeline permit)." That is, on his first day in office tomorrow Biden plans to employ the "pen and phone" tactic to kill a multimillion dollar international project that employs tens of thousands of people (in two countries!) in the midst of a pandemic-created recession. This is madness.

Canada vs. the Democrats.

Meanwhile, in Canada, the Trudeau government are scrambling to make the case that this move is unnecessary from an environmentalist perspective. Canada’s ambassador to the U.S., Kiersten Hillman, released a statement on Sunday saying "The government of Canada continues to support the Keystone XL project and the benefits that it will bring to both Canada and the United States.” She went on to stress that the Keystone project was more environmentally friendly than the one the Obama administration rejected in 2015:

Not only has the project itself changed significantly since it was first proposed, but Canada’s oilsands production has also changed significantly. Per-barrel oilsands (greenhouse gas) emissions have dropped 31 per cent since 2000, and innovation will continue to drive progress... Keystone XL fits within Canada’s climate plan at a time when our economic recovery is a top priority... there is no better partner for the U.S. on climate action than Canada as we work together for green transition.

Alberta Premier Jason Kenney took a slightly more aggressive tone, saying: "Should the incoming U.S. administration abrogate the Keystone XL permit, Alberta will work with [pipeline owners] TC Energy to use all legal avenues available to protect its interest in the project."

These appeals are unlikely to sway Team Biden, who are riding a wave of anti-Republican sentiment in the wake of the recent disturbance at the Capitol. They believe they have a window of opportunity to make some big, cost-free moves which will garner them goodwill with activists but will be forgotten by voters still focused on the Trump show.

This could well be a miscalculation on their part. The issues which gave rise to Trump in 2016 won't go away when he does. And the most important of those, the alienation of America's working class since the end of the Cold War, will be aggravated by virtue signaling environmentalist moves like the cancelation of Keystone.

Jason Kenney's Diplomatic Response to Biden

Last week I wrote about the ridiculous pledge from Joe Biden's campaign to kill the Keystone XL pipeline project should Joe succeed in his bid to become the 46th President of these United States. Well, the following day Biden came out of his Delaware basement, saw his shadow, and magnanimously allowed reporters to ask him a few questions. One of those questions was about his Keystone pledge, and here is what the former veep had to say:

“I’ve been against Keystone from the beginning. It is tarsands that we don’t need — that in fact is very, very high pollutant,” Biden said in an interview with CNBC. Biden said he wouldn’t want to stop all oil projects immediately, but vowed to transition the U.S. “gradually… to a clean economy.” He said Keystone “does not economically, nor, in my view, environmentally, make any sense.”

In my post I mentioned how bizarre it is that Biden would endanger all the jobs that Keystone XL has and will continue to provide in two countries, while also antagonizing Canada, a key ally and major (and increasingly important) trading partner. Well, in his reply to Biden's comments Alberta Premier Jason Kenney hit a lot of the same notes, while having the diplomatic sense to suggest that the issue might not be Biden's stupidity as much as that he has been poorly served by his advisors:

The comments made by [former U.S.] vice-president Biden suggest that he hasn’t been well or accurately briefed on the dependence of the American economy on Canadian energy exports,” Kenney said. “It’s a hugely important strategic development for the United States that North America is now energy independent — no longer dependent on imports from OPEC dictatorships like Venezuela and Saudi Arabia.... The Keystone pipeline... delivers about 600,000 barrels a day of heavy Alberta crude to refineries primarily in the Midwest in Illinois. So, a whole lot of jobs and the economy in the American Midwest are dependent on that supply of energy through the Keystone pipeline.

We would hope to have a chance to ensure Mr. Biden was aware of these facts and also aware that the building trades union, the construction unions, the steelworkers unions — which are traditional supporters of Mr. Biden’s party — are strongly in favour of the Keystone XL pipeline expansion, which has already crossed the border, which is creating thousands of jobs on both sides of the border and which will ensure that the United States is no longer dependent on OPEC crude,” Kenney said.

The premier went on to point out that Biden's claim that the claim that the project is not economically viable doesn't stand up to scrutiny since Keystone "has been operating for 10 years, profitably and successfully, both for the refineries, American consumers and Canadian producers," and that his claim that it is environmentally unsound doesn't make a lot of sense since the alternative to the pipeline is oil being transported by rail which itself leads to greater carbon emissions. It isn't like people are going to stop using energy. much as the Luddite Left might wish otherwise.

Kenney would have been in his rights to drop the mic after this thorough dismantling of the former vice president, and maybe put videos of it up on all of his social media accounts, followed by a sufficiently antagonistic gif, like so:

or

But interfering in the politics of another country -- especially an ally -- is bad form, and of course it's possible that Kenney will have to work with (God help us) President Biden one of these days. Should that day arrive, perhaps Biden should take some diplomacy lessons from Alberta's premier.

Of course it would be even better if he learned a thing or two about major sectors of our economy before he decides to destroy them.