It only took 2 days for Biden to create a political mess for Trudeau

The US has scrapped an oil pipeline that was key to Canadian 'national unity'

In this file photo, indigenous leaders and climate activists disrupt business at a Chase Bank branch in Seattle in 2017. AFP

The first time Canadian Prime Minister Justin Trudeau went to Washington for a state visit, he won America over with a speech in which he described Canada and the US as siblings. “We became the stay-at-home type,” he said, whereas America “grew up to be a little more rebellious”. It was a charming complement to the “bromance” editorialised by the North American media between Mr Trudeau and his equally charismatic host, US president Barack Obama.

Now, after four years of deeply uncomfortable moments with Donald Trump, Ottawa hoped to recapture some of the brotherly love with the new president, Joe Biden. Instead, it was reminded in earnest what Mr Trudeau had mentioned tongue in cheek, which is how different the two countries’ interests can sometimes be.

Mr Biden's first phone call to a foreign leader, two days after his inauguration, was to Mr Trudeau. The call was made awkward by the fact that, mere hours after he was sworn in, Mr Biden issued an executive order ripping up a 2019 agreement for an oil pipeline, called Keystone XL.

The pipeline would ship 830,000 barrels of oil a day from the Canadian province of Alberta to the US state of Nebraska, 2,000 kilometres away, where it could then continue to the port of Galveston in Texas.

For Alberta, which was built on supplying the US with oil, it's a heart-wrenching loss. Oil gave Alberta the highest level of wealth per capita in Canada for years. Since 2015, however, successive collapses in the oil price and, eventually, Covid-19 have brought the industry to its knees. Unemployment is at 11 per cent. And there is simply too much oil in storage to export, meaning that the price for getting it out through the limited pipelines available is too high. Keystone XL was supposed to be the answer to that problem, and a vote of confidence in the province's oil future. Last year, to signal its own support, the government of Alberta made a $1.1 billion investment in the pipeline and loaned the company building it another $4.7bn.

The whole Keystone XL episode reveals an unexpectedly pragmatic dimension to Mr Trudeau’s otherwise idealistic politics. The head of Alberta’s government, Jason Kenney, was mortally outraged by the Prime Minister’s response to Washington’s decision. Mr Kenney believed it was, simply put, to capitulate. Without any effort to push back, Mr Trudeau gave in and has declared the pipeline more or less dead.

That is a stark departure from his efforts with Mr Obama and Mr Trump over the past five years, when the publicly woke and green Mr Trudeau was often referred to as a “secret oil man”. During the Obama era, Mr Trudeau lobbied Washington hard for Keystone XL, but in vain. So he made trips to the US to speak to the oil industry directly, knowing that his personal connection with the president would spare him the administration’s ire. At an industry conference in Houston in 2017, just weeks after Mr Obama left office, Mr Trudeau famously justified Canada’s position by saying, “No country would find 173 billion barrels of oil in the ground and just leave them there.”

As difficult as Mr Trudeau's relationship with Donald Trump was, oil was at least something on which they could agree. So in 2019, Mr Trump signed the pipeline deal that Mr Obama wouldn't and Mr Trudeau's administration was relieved. As Ottawa's natural resources minister Seamus O'Regan put it, Keystone XL was becoming a matter of "national unity".

That remark was informed by the long history of animosity in Alberta towards Mr Trudeau’s Liberal Party and even the Prime Minister himself. In his last re-election campaign, his greatest electoral grief came from Alberta. Any hope that Mr Trudeau has ever had of gaining votes – and financial support – from the province has always relied on his support for Keystone XL.

So why has he given up so easily now? The reality is that Mr Trudeau supported the project not because it was hard, but because it was easy. When Mr Obama was president, Mr Trudeau could leverage their “bromance” to push as hard as he could without jeopardising their relationship, while expediently signalling to Albertan voters that he was fighting their corner. With Mr Trump, signing oil deals was right up the president’s street.

But with Mr Biden, Mr Trudeau has neither of those assets. Mr Biden is less suited, given the state of American politics and his status as a veteran, Cold War-era statesman, for Instagram moments with Mr Trudeau. He has also brought into his administration a team that is earnest in its ideological opposition to Keystone XL. His climate czar, Gina McCarthy, is a long-time public opponent to the pipeline, and gives an ear to the environmental activist movement that has mounted a vicious campaign against it for the past decade. She is also far more cognisant of the contradictions in Mr Trudeau's environmental policies.

Much of Mr Biden’s decision would have been motivated by her advice. She knows, and cares, that Alberta’s oil is not extracted like that of most other places. It is locked in the form of viscous bitumen buried within layers of sand underneath the province’s northern forests. Extracting it is much more expensive, labour-intensive, carbon-heavy and environmentally catastrophic than the oil industry standard. Areas of forest the size of small countries have to be cleared to get to it, and the land is often rendered too dangerous for animals to return afterwards.

Making the case for the Biden administration to support a project associated with such dark consequences would be tough, even for the charming and persuasive Justin Trudeau. But Mr Trudeau also knows that that is not his only obstacle. Mr Biden has a pragmatic side, too.

The reality is that the US just doesn’t need that much Canadian oil anymore, and it will only need it less in the years to come. While Canada’s share in the US’s oil import basket has increased over the past decade, the overall size of that basket has shrunk considerably. The US is weaning itself off of oil.

And so Canada’s oil export ambitions will have to be tempered, at least as far as Keystone XL goes. It can neither afford nor win the fight with Mr Biden’s Washington, which is proving itself at once more progressive and equally pragmatic on this issue.

But Canada has other pipelines in the making, including one with a view to getting its oil to Asia, via Vancouver. That orientation may come to define Canada's energy relationship in the years ahead, even if it continues to put Ottawa's environmental targets in an awkward position. It will also no doubt make Washington uncomfortable. In the end, Mr Trudeau will hope to send a message to the new US President: that Canada won’t rebel, but it can no longer afford to be the stay-at-home type, either.

Sulaiman Hakemy is opinion editor at The National