‘I see a lot of steep barriers’: Industry experts weigh in on likelihood of Keystone XL revival.

Industry skeptical, but open to Keystone XL talks

“If we can use it to our advantage in a discussion with the U.S., I think that’s a good thing,” said Richard Masson, executive fellow at the University of Calgary’s School of Public Policy and former CEO of the Alberta Petroleum Marketing Commission.“But I see a lot of steep barriers to getting it actually built.”

The biggest barrier is financial risk, said Masson, who believes explicit financial guarantees from Washington would be required.

When the project was cancelled in 2021, the Alberta government and TC Energy (then TransCanada Corporation), which was operating the project, lost billions of dollars.

“It’ll be unlikely to be completed before this presidential term ends,” Masson said. “So it could be a Democrat in the White House next time around to cancel it for a third time, and if you can imagine how that would look, it just blows my mind.”
Strong business case, say experts

Industry experts say growing demand is a clear reason the project still makes economic sense.

“Canada has the potential to increase its existing oil sands production, perhaps by as much as a million barrels a day,” said former TC Energy executive Dennis McConaghy, who worked on the original Keystone XL proposal.

But McConaghy warned the economic boost would require “fundamental adjustments by the Carney government with respect to existing Canadian climate and carbon policy.”

The prime minister has signalled that environmental targets and requirements remain central to any new project of national interest, but on Friday he wouldn’t commit to maintaining the emissions cap.

Still, experts suggest meeting those requirements could be a barrier.

“Is there a way that the province of Alberta, the industry, can provide the prime minister and his team with certainty that (the project) is not going to compromise the likelihood of meeting our climate change targets? said Andrew Leach, co-director of the Institute of Public Economics at the University of Alberta. “That’s going to be a really tough ask.”

The revival of the Keystone XL expansion could also face backlash for increasing Canada’s reliance on the U.S., at a time when Ottawa says it’s looking to diversify its markets.

#China vows to stand firm against Trump’s 100 per cent tariff threat, “China’s stance is consistent,” the Commerce Ministry said in a statement posted online. “We do not want a tariff war but we are not afraid of one.”

It was China’s first official comment on Trump’s threat to jack up the tax on imports from China by Nov. 1 in response to new Chinese restrictions on the export of rare earths, which are vital to a wide range of consumer and military products.

The back and forth threatens to derail a possible meeting between Trump and Chinese leader Xi Jinping and end a truce in a trade war in which new tariffs from both sides briefly topped 100 per cent in April.

Trump has raised taxes on imports from many U.S. trading partners since taking office in January, seeking to win concessions. China has been one of the few countries that hasn’t backed down, relying on its economic clout.

“Frequently resorting to the threat of high tariffs is not the correct way to get along with China,” the Commerce Ministry said in its post, which was presented as a series of answers from an unnamed spokesperson to four questions from unspecified media outlets.

The statement called for addressing any concerns through dialogue.

“If the U.S. side obstinately insists on its practice, China will be sure to resolutely take corresponding measures to safeguard its legitimate rights and interests,” the post said.

In addition to the 100 per cent tariff, Trump threatened to impose export controls on what he called “critical software,” without specifying what that means.

Both sides accuse the other of violating the spirit of the truce by imposing new restrictions on trade.

Trump said in a social media post that China is “becoming very hostile” and that it is holding the world captive by restricting access to rare earth metals and magnets.

The Chinese Commerce Ministry post said the U.S. has introduced several new restrictions in recent weeks, including expanding the number of Chinese companies subject to U.S. export controls.

On rare earths, the ministry said that export licenses would be granted for legitimate civilian uses, noting that the minerals also have military applications.

The new regulations include a requirement that foreign companies get Chinese government approval to export items that contain rare earths sourced from China, no matter where the products are manufactured.

China accounts for nearly 70 per cent of the world’s rare earths mining and controls roughly 90 per cent of their global processing. Access to the material is a key point of contention in trade talks between Washington and Beijing.

The critical minerals go into many products, from jet engines, radar systems and electric vehicles to consumer electronics including laptops and phones. China’s export controls have hit European and other manufacturers, as well as American ones.

The #Commerce Ministry statement said that the U.S. is also ignoring Chinese concerns by going forward with new port fees on Chinese ships that take effect Tuesday. China announced Friday that it would impose port fees on American ships in response.

Ken Moritsugu, The Associated Press