CALGARY — The election of Joe Biden as U.S. president likely spells the end of the Keystone XL oil pipeline, but his environmental agenda could help Canadian energy companies better compete with their American rivals, observers said Monday.

Keystone XL is a high-profile target for Biden's administration and he will likely carry out his campaign pledge to kill it, said John Baird, a former minister of foreign affairs in the Stephen Harper government who is now a senior adviser for law firm Bennett Jones.

"I really fear we're in trouble on Keystone ... this is something he can do with the stroke of a pen and I'm deeply concerned that he will revoke the presidential permit," Baird said on Monday, adding the move would harm both the Canadian and Alberta economies.

However, Biden is better aligned than U.S. President Donald Trump with Canada's federal stance on climate change and Baird predicted his influence on U.S. regulatory and environmental systems could make Canadian companies more competitive with their U.S. peers, who have enjoyed more business-friendly policies under Trump.

Biden was declared president-elect on the weekend, though Trump hasn't conceded. Meanwhile, which party controls the Senate is uncertain until the winners are declared in two January runoff races in Georgia.

Last March, Calgary-based TC Energy Corp. approved construction of the Keystone XL pipeline designed to transport up to 830,000 barrels per day of oil from Alberta to Nebraska, after the Alberta government agreed to invest about $1.5 billion as equity and guarantee a $5.5-billion project loan.

The pipeline was delayed for years by the Barack Obama government before being rejected in 2015, a decision that was later reversed by Trump. Biden served as Obama's vice-president.

In an email Monday, TC Energy spokesman Terry Cunha said the company is not adjusting its Keystone XL construction schedule because of the Biden win.

"Construction activity continues to take place," he said. "As we wind down some activity due to the harsher winter weather in many areas across our footprint, it was planned for and is a normal part of the process when building large, multi-year infrastructure projects."

Alberta's current oil production can be transported with existing pipelines plus about 900,000 barrels per day more from two projects, Enbridge Inc.'s Line 3 replacement pipeline (expected to be finished late next year) and the Trans Mountain expansion by 2023, said Richard Masson, executive fellow with the University of Calgary's School of Public Policy.

He agreed Biden will likely cancel the Keystone XL pipeline's permit, probably before next summer's construction season, adding that means lost opportunity to attract billions of dollars in growth investment capital to Canada and likely further consolidation and workforce reductions in the oilpatch.

"I believe Alberta's going to grow production a million barrels a day between now and 2030 and the world needs that," said Masson, noting global oil demand has slumped because of the COVID-19 pandemic but will start growing again when the virus is contained..

"In that world, we need Keystone XL, so this is not good news for us."

Canada's oil producers need the pipeline and his organization will be reaching out to American supporters to urge the new U.S. government to allow it to be built, said Tim McMillan, CEO of the Canadian Association of Petroleum Producers, in an interview on Monday. 

Biden's election signals a shift to bilateralism after Trump's "chaotic" and often unilateral dealings with allies and foes alike, said Gary Mar, former Alberta representative in Washington and current CEO of the Canada West Foundation think-tank.

That suggests he may be willing to allow Keystone XL to proceed if a divided Senate gives him room to move ahead with other priorities, he said.

Mar added the recent attention paid to emissions targets by Canadian companies and Biden's friendly relationship with Canadian Prime Minister Justin Trudeau also might persuade him to allow the pipeline to proceed.

In a note to investors on Sunday,  CIBC analyst Dennis Fong said most energy investors have already discounted the likelihood that Keystone XL will proceed.

On the weekend, Alberta Premier Jason Kenney congratulated Biden in a statement, adding that U.S. energy security is "dependent on Alberta as the United States' largest source of oil imports."

This report by The Canadian Press was first published Nov. 9, 2020.

Companies in this story: (TSX:TRP, TSX:ENB)

Dan Healing, The Canadian Press