The states claim Biden’s revocation of the permit for the segment of pipeline that crosses the U.S.-Canada border violates their traditional authority to regulate pipelines within their borders.
GALVESTON, Texas (CN) — A coalition of Republican states sued the Biden administration Wednesday, saying they stand to lose tens of millions in property taxes the Keystone XL pipeline would have provided once fully constructed and operational. They seek an order declaring the permit revocation unconstitutional.
Keystone XL is part of a larger pipeline system designed to transport up to 830,000 barrels of crude oil per day from Alberta, Canada to refineries on the Gulf Coast.
Though several segments of the system are complete, construction on the remaining portion, which would connect pipeline terminals in Alberta and Steele City, Neb., stopped on Biden’s first day in office when he signed an executive order revoking its permit.
“Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration’s economic and climate imperatives,” Biden said at the time.
Commissioned in 2010 by owner TC Energy, Keystone XL has faced fierce opposition from environmentalists who believe the United States must wean itself off fossil fuels to avoid catastrophic climate change. They also worry a spill could contaminate the Ogallala Aquifer, which provides drinking water for millions and 30% of the nation’s crop irrigation water, according to the Natural Resources Defense Council.
The pipeline has also become a political football.
Democratic President Barack Obama and then-Vice President Joe Biden sided with environmentalists in November 2015 when Obama refused to approve a permit for Keystone XL, but Republican President Donald Trump in 2019 approved construction of the 1.2-mile stretch of pipeline that crosses the U.S.-Canada border.
“That construction is now effectively complete,” Texas says in its lawsuit.
The red states claim if laying of the pipeline does not resume, they stand to lose millions in property tax revenue and sales tax revenue that would have been generated by construction of man camps for pipeline construction workers along the route.
“These camps would generate the equivalent of one full year of property-tax revenue, or about $4 million, for their host counties,” the lawsuit states. “They would also generate short-term revenues from sales and use taxes totaling approximately $66 million across the affected States. Construction could last for up to two years.”
Furthermore, the states say, “Once fully constructed and operational, the Keystone XL would have provided tens of millions of property-tax dollars to the Plaintiff States and their local governments.”
Despite Biden’s claims the pipeline is not in line with his administration’s goals on climate change, Texas says the State Department has repeatedly found it “would not materially affect greenhouse gas emissions or significantly impact the rate of extraction or demand for crude oil” and it would provide a safe way to transport crude while benefitting the U.S. economy through the creation of jobs, many of the well-paying union jobs.
The states claim by revoking the permit, Biden infringed on commercial regulatory powers that Congress alone possesses.
They seek an injunction to reinstate TC Energy’s permit to operate the cross-border pipeline and a declaration the revocation was unconstitutional.
Montana and Texas are leading the challenge, joined by the attorneys general of Arizona, Alabama, Arkansas, Georgia, Kansas, Kentucky, Indiana, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, West Virginia and Wyoming.
Texas Attorney General Ken Paxton said Biden’s decision to revoke the pipeline permit would devastate the livelihoods of thousands of workers and their families.
“This administration continues to tout imaginary green-energy jobs, without any recognition that their actions in the real world will make it impossible for hard-working Americans to put food on the table,” he said in a statement.
The lawsuit will undoubtedly be welcomed by Alberta Premier Jason Kenney who called Biden’s revocation of the permit an “insult” and urged Canada’s federal government to impose trade sanctions.
The province of Alberta has reportedly agreed to invest $1.1 billion in the project.