Biden to Cancel Keystone XL Pipeline in Inauguration Day Executive Order

Economists generally estimate that the production of petroleum from Canadian tar sands is only profitable when global oil prices range between $65 and $100. But oil prices averaged only about $40 a barrel over the course of 2020 and are expected to remain below $50 a barrel through 2022, according to the Energy Information Administration, the statistics office of the Energy Department.

“This is going to have greater symbolic importance than market importance,” said Kevin Book, managing director at ClearView Energy Partners, a nonpartisan research firm, of the new administration’s plans to rescind the project’s permit. “The Keystone XL has been pending for a decade. If you can go one decade without it, investors might reasonably question if you can go three.”

Experts noted that even if the oil that would be produced and moved by the pipeline was eventually burned, its contribution to global warming would be infinitesimal compared with the greenhouse gases produced by entire economic sectors, such as automobiles. But Mr. Biden is also expected to move quickly to reinstate Obama-era controls on auto pollution, which Mr. Trump had rolled back. It will likely be a year or more before those rules could be legally back in place.

“In terms of climate change policy, there is so much else that can be done that makes a bigger difference,” said Robert Stavins, an environmental economist at Harvard. “However, I can see the new administration looking to abandon Keystone because it is something that can be done quickly with a stroke of a pen without Congress.”

Had it been completed, the pipeline was designed to take as much as 830,000 barrels a day of Canadian and North Dakota crude to refineries in Texas and Louisiana for processing into oil that could be exported oversees or used to enhance domestic supplies.

The loss of Keystone XL is yet another blow to the oil-producing province of Alberta, which has been struggling with low prices for more than five years.

Last spring, its government invested $1.1 billion and offered loan guarantees to keep the project alive. Several experts said that most of that money is likely now gone.