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What gets built first, the Keystone XL pipeline or Calgary’s Green Line LRT project?

One project is dead and buried — colder than super-chilled LNG — and the other appears to be on the ropes.

They’re very different developments — cross-border energy infrastructure compared to public transit — but both demonstrate what happens when mega-politics collide with mega-projects: chaos.

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Premier Danielle Smith was asked by reporters about the future of both projects this week after speaking at the Lloydminster Heavy Oil Show.

As the oilpatch sees record production this year, due in part to the startup of the Trans Mountain Expansion, thoughts about the need for future transportation capacity out of Western Canada are returning.

More than a decade ago, Keystone XL was seen as a critical part of the solution to this problem.

The development proposed by TransCanada (later renamed TC Energy) was expected to ship 830,000 barrels of Western Canadian oil southward, connecting the oilsands to the massive refining hub along the U.S. Gulf Coast.

Amid political sniping south of the border, Keystone XL became a wedge issue between Democrats and Republicans in a debate pitting climate against the economy.

Its cross-border permit was cancelled by U.S. President Joe Biden on his first day in office in 2021, even though it had been approved by his predecessor, Donald Trump. Before that, it was previously rejected by then-president Barack Obama last decade.

Construction was already underway, with the backing of the Alberta government, when the project was halted. TC later took a big write-down. The province was left to absorb an estimated $1.3-billion loss of taxpayer money.

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KXL was dead. So why is Keystone XL even being discussed again?

In this week’s presidential candidates’ debate, Trump raised the moribund project while attacking his Democratic rival, U.S. Vice-President Kamala Harris, over energy and international affairs.

Trump wants to see more energy infrastructure built, while there appears to be little chance Harris would overturn Biden’s decision.

More importantly, it’s unlikely any CEO or board of directors would wade into this minefield and propose a revamped KXL 2.0.

During a fireside chat at the oil show, when Smith was asked about the possibility of Keystone XL being resurrected, she pointed out that existing pipeline capacity could be increased through smaller expansions.

“I would also love to see a restart of some kind of project on the Keystone XL. Maybe that route was not the right one,” she told the audience.

“I think we have to be realistic. If we end up with a Republican in the White House, I think that we end up with a Keystone permit being signed into law the same day. I think that that is how strongly the Republicans feel about energy security.”

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However, in today’s current environment, “it’s a moot point because I don’t think there’s any private sector company in the current environment that would be willing to take the risk,” the premier later told reporters.

Industry experts agree.

“The probability of that exact pipeline being revived is less than one in 10, maybe two in 10,” said Chris Bloomer, former CEO of the Canadian Energy Pipeline Association.

“KXL, it was all about politics in terms of the opposition . . . Once you go through the pain of taking that big a write-down, the definition of insanity is to keep doing the same thing over and over again.”

In Calgary, let’s hope the odds of a Green Line being built are higher, as the city is experiencing massive population growth and needs enhanced transit.

Last week, the province pulled its $1.5-billion funding commitment for the project. The first phase recently saw its estimated price tag escalate by $705 million to $6.3 billion, while reducing its coverage in south Calgary.

Like KXL, several political currents are at play, including internal council division, and the UCP government blaming former Calgary mayor Naheed Nenshi for the project’s woes. Nenshi, now the Alberta NDP leader, fired back that “the UCP government has chosen to make this a political issue.”

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On Tuesday, council will discuss a recommendation by city administration on how they could wind down the Green Line and turn it over to the province.

“There’s so much politics around the Green Line, as there would be with any infrastructure project,” said Mount Royal University political scientist Duane Bratt.

“Then, you throw in multiple orders of government and that adds to the complexity. Then, you add the partisan makeup at the provincial level.”

Asked this week about the Green Line, Smith noted the first phase will cost more, yet not extend as far south as was initially planned, running from the downtown to Lynnwood-Millican, instead of extending to a Shepard station at 130th Avenue S.E.

“The project started off as a 46-kilometre route that would cost $4.4 billion. Everyone was excited about it. And it’s the incredible shrinking project,” the premier said.

“Every time a new announcement came out, it got smaller and smaller, and it did not meet its original commitment.”

The province will ask an engineering firm to provide it with an alternate route, but critics point out the project has been extensively studied.

Meanwhile, businesses wait for clarity amid the confusion and finger-pointing.

“The role of politics is to find out what’s right, not who’s right,” Calgary Construction Association president Bill Black said Thursday.

“My hope is the politics calm down, hopefully a little bit of wisdom prevails, and the need to get things done — and to do it right — will prevail.”

Chris Varcoe is a Calgary Herald columnist.

[email protected]

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