The Biden administration is reportedly planning to boost imports of Canadian oil, but won’t consider restarting construction of the Keystone XL pipeline.
The administration hasn’t yet decided on a plan and discussions are ongoing, people familiar with White House deliberations told The Wall Street Journal. But any uptick in oil imports from Canada would require additional reliance on rail, an already expensive way to transport oil, or boosted flows in existing pipelines which are already running near maximum capacity.
“There’s not a limitation in terms of resource potential,” Kevin Birn, an analyst at S&P Global Commodity Insights, told the WSJ. “There’s a limitation of capacity.”
Keystone XL, the proposed extension of an already operating pipeline, would have transported an additional 830,000 barrels of oil from western Canada to the U.S., according to TC Energy, the company that would have operated it. President Joe Biden canceled the pipeline’s permit hours after his inauguration on Jan. 20, 2021.
The White House, though, has repeatedly argued that bringing the pipeline back wouldn’t help relieve current global energy supply issues. Western nations have announced a series of sanctions targeting the Russian economy in the wake of the nation’s invasion of Ukraine, upsetting global energy markets in which Russia is a major player.
“The Keystone was not an oilfield; it’s a pipeline,” White House press secretary Jen Psaki said during a press briefing in March.
TC Energy officially terminated the Keystone XL project in June following a review of its options. The pipeline was only 8% constructed when its permit was revoked, according to Reuters, but TC Energy had planned to complete it by 2023.
In January, a federal judge tossed a lawsuit filed by more than 20 states arguing that Biden had overstepped his constitutional authority when he revoked the permit. The judge ruled that he couldn’t determine whether Biden’s actions were legal since TC Energy had backed out of the project.
“Recent events have made it clear that we need more, not less, domestic energy supply,” Montana Attorney General Austin Knudsen, who led the multi-state lawsuit, told the Daily Caller News Foundation in a statement following the ruling. “The Keystone XL or a similar pipeline could have provided that. Instead, Montanans are once again paying the price for President Biden’s disastrous energy policies that pander to his coastal elite base without even a perceived environmental benefit.”
In 2021, Canada was the largest foreign provider of crude oil to the U.S., government data showed. The U.S. imported more than 3.5 million barrels of Canadian oil per day last year.