The halt to construction of the Keystone XL oil pipeline, long a point of contention between climate activists and the energy industry, has caused a ripple in US-Canada relations.
US President Joe Biden, in one of 17 executive orders on his first day in office, revoked the pipeline's permit Wednesday.
The 1,700-mile stretch was to transport about 800,000 barrels of oil a day from Alberta eventually to the Texas Gulf Coast, traversing Montana and South Dakota before connecting with existing pipelines in Nebraska.
"The Permit is hereby revoked," Biden's executive order says. "Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration's economic and climate imperatives."
Canadian Prime Minister Justin Trudeau said in a statement, "We are disappointed but acknowledge the President's decision to fulfill his election campaign promise on Keystone XL.
"Despite President Biden's decision on the project, we would like to welcome other executive orders made today, including the decisions to rejoin the Paris Agreement and the World Health Organization, to place a temporary moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge, and to reverse the travel ban on several Muslim-majority countries," Trudeau said.
White House press secretary Jen Psaki said Biden will call Trudeau on Friday, in his first call with a foreign leader as president. She said the pipeline would be one of the topics.
TC Energy Corp, based in Calgary, Alberta, will eliminate more than 1,000 construction jobs in the coming weeks and stop work on the pipeline, the company said in an email to employees Thursday.
"The Biden administration has chosen to listen to the voices of fringe activists instead of union members and the American consumer on Day 1," said the United Association of Union Plumbers and Pipefitters in a statement to bloomberg.com.
TC Energy owns the existing pipelines, which run from Alberta to the US storage hub in Cushing, Oklahoma, and to the US Gulf, along with a power and storage business.
The Keystone XL pipeline, the fourth pipeline in the system, which had been expected to be completed in 2023, was first proposed in 2008.
It has been a symbol for those opposed to the production of more fossil fuels over their impact on the environment.
In 2015, the Obama administration prevented the Keystone XL from coming into the US, but the Trump administration revived it in 2017.
Jason Kenney, premier of Alberta province, said that Ottawa should impose trade sanctions on the US if the decision is not reversed.
"It is an insult directed at the United States' most important ally and trading partner on day one of a new administration," Kenney said. "The leader of our closest ally retroactively vetoed approval for a pipeline that exists and which is co-owned by the Canadian government, directly attacking by far the largest part of the Canada-US trade relationship, which is our energy industry and exports."
Critics say the extraction of Alberta's oil sands increases greenhouse gas emissions and threatens Alberta's ecosystem.
But Marty Durbin, president of the US Chamber of Commerce's Global Energy Institute, said in a statement: "The pipeline—the most studied infrastructure project in American history—is already under construction and has cleared countless legal and environmental hurdles."
Dale Marshall, national climate program manager for Canada's Environmental Defence, said,"Killing the Keystone XL pipeline once and for all is a clear indication that climate action is a priority for the White House."
