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How much of the pipe meant to build Keystone XL is fit only for scrap?

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Stacked pipes awaiting installation in oil pipeline. Image credit: Loozrboy/Flickr

Alberta is unlikely to recoup much of its $1.5-billion loss on the Keystone XL pipeline by selling off unused pipe now that the Biden administration has pulled the plug on the megaproject.

At any rate, it's hard to believe much of the pipe will be good for anything but scrap after sitting outdoors exposed to the elements for more than five years since former U.S. president Barack Obama first cancelled the Keystone XL project in 2015.

Indeed, some of the pipe was purchased a decade ago, before Obama cancelled the project the first time, and has sat outside unused and deteriorating ever since.

Pipe left aboveground longer than its manufacturers recommend can become prone to failure when ultraviolet radiation from the sun makes protective coatings deteriorate, resulting in pitting and corrosion of the steel. For example, this was found by TC Energy engineers to have happened to sections of pipe exposed to sunlight for up to nine years near Little Rock, Arkansas.

So Kenney almost certainly didn't have it right when he said a week ago that if U.S. President Joe Biden went ahead and killed the project as soon as he was sworn in -- exactly what Biden did after his inauguration on Wednesday -- "there would be assets that could be sold, such as enormous quantities of pipe, that would offset construction costs."

Well, don't count on that unused pipe fetching enough to make a meaningful dent in the $1.5-billion loss Kenney incurred when he made his bad bet that former president Donald Trump would win the U.S. presidential election last November and allow the project to go ahead.

Indeed, it's whispered in the oilpatch that much of the pipe used in news photo opportunities as part of Premier Kenney's pressure campaign to demonstrate the project was ready to roll was too old and too far gone to be put in the ground.

So it's reasonable to think that if Kenney had gotten his wish and Trump had been re-elected, or if the former president's attempted coup had somehow succeeded, the project would have cost considerably more and taken a lot longer to complete than estimated because new pipe would have had to have been manufactured, purchased and shipped to work sites.

Biden signalled his plans early and clearly, and kept his promise as soon as he was elected, so his decision to kill the project could have surprised no one except Premier Kenney's most gullible supporters.

It's highly improbable it surprised Calgary-based TC Energy Corp. Why do you think the former TransCanada Corp. changed its name in 2019? TC Energy's senior executives can certainly read the writing on the wall, even if a lot of people in Alberta who wish the oil booms of yore could somehow come again are wilfully blind to reality.

It's very hard to believe that TC Energy hasn't been planning for months for this development to take place. After all, that's why its executives are paid the big bucks.

That would explain why TC Energy threw in the towel so quickly, even before President Biden had actually signed the order.

And it explains why many of the members of the company's Keystone XL project team were reassigned to other projects around the time of the November 3 presidential election, and why the company is looking at more investments in renewable energy, such as those it's made in the past in solar and wind power. It also owns close to 50 per cent of Bruce Power, generating electricity from nuclear power in Ontario.

Many of TC Energy's top executives must recognize that the inevitable has now happened and they can get on with planning for their company's future without dealing with pressure from contractors and United Conservative Party politicians to continue the pretence the pipeline to the U.S. Gulf Coast has any life left in it.

As Premier Kenney himself admitted, TC Energy would have walked away from Keystone XL a year ago if Alberta taxpayers hadn't underwritten the scheme to the tune of $1.5 billion, with the promise of $6 billion more, to keep the UCP's pipedream alive.

"There are no prospective private sector bidders of the Keystone XL project at this time," he said last year when he announced the gamble. "In other words, without this investment by Alberta, the pipeline would not be built."

Well, it turns out that even with it that pipeline will never be built. And Kenney and the UCP would like you to think that's Prime Minister Justin Trudeau's fault.

David Climenhaga, author of the Alberta Diary blog, is a journalist, author, journalism teacher, poet and trade union communicator who has worked in senior writing and editing positions at The Globe and Mail and the Calgary Herald.

Image credit: Loozrboy/Flickr

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