The Canadian company behind the Keystone XL oil pipeline said on Wednesday that it has suspended work on the pipeline in anticipation of newly sworn-in United States President Joe Biden revoking its permit.
Biden’s day-one plans included moving to revoke a presidential permit for the pipeline.
The 2,735km (1,700-mile) pipeline would carry roughly 800,000 barrels of oil a day from Alberta to the Texas Gulf Coast, passing through the US states of Montana, South Dakota, Nebraska, Kansas and Oklahoma.
“As a result of the expected revocation of the Presidential Permit, advancement of the project will be suspended,” the Calgary, Alberta-based company TC Energy Corp said in a statement.
First proposed in 2008, the pipeline has become emblematic of the tensions between economic development and curbing the fossil fuel emissions that are causing climate change.
The administration of former US President Barack Obama rejected the project, but subsequent President Donald Trump revived it and has been a strong supporter. Construction on the pipeline has already started.
Kirsten Hillman, Canada’s ambassador to the US, said Canada needs to move on now that Biden has made a decision.
“Of course we’re disappointed. We worked hard over the past number of months trying to make the case for Keystone XL,” Hillman told the Canadian Broadcasting Corporation.
“He had made a commitment during his campaign and he lived up to that commitment. I think we have to accept that and move forward.”
Canadian Prime Minister Justin Trudeau raised Keystone XL as a top priority when he spoke with Biden in a phone call in November. The project is meant to expand critical oil exports for Canada, which has the third-largest oil reserves in the world.
Jason Kenney, premier of the oil-rich province of Alberta, said late Tuesday that he urged Trudeau to tell Biden that “rescinding the Keystone XL border crossing permit would damage the Canada-US bilateral relationship”.
Trudeau and Biden are politically aligned and there are expectations for a return to normal relations after four years of Trump, but the pipeline is an early irritant as Biden has long said he would cancel it.
Trudeau has tried to balance the oil industry’s desire for more pipelines with environmentalists’ concerns. He cancelled one major pipeline to the Pacific coast from oil-rich Alberta, but approved another and instituted a national carbon tax.