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Biden revokes permit for Keystone XL pipeline

Yahoo Finance's Rick Newman joins Kristin Myers to discuss the impact of the Keystone XL pipeline project.

Video Transcript

KRISTIN MYERS: Welcome back to Yahoo Finance Live. All right, the Keystone XL pipeline, an expansion of the Keystone pipeline which carries Canadian crude into the United States, has been blocked by President Biden. We have Yahoo Finance's Rick Newman here with us now to talk about it more.

So, Rick, you and I were actually just chatting about this in the break. So, give us a really super brief overview. Because this project has been ongoing for over a decade. And as you and I were just chatting, it's the Keystone XL pipeline that is being impacted, not the Keystone pipeline that already exists. So give us a brief overview for those at home that don't know.

RICK NEWMAN: That's right. This proposal dates to 2008. And if you go back to that point in time, oil prices were up well over $100. They peaked at $150 per barrel back then. They're obviously much lower now, but at any rate, the idea with the Keystone XL pipeline was to build a new way to get oil from certain fields in Alberta, Canada all the way down to Nebraska. And then, they would, at that point, enter a different pipeline system that would take the oil to the Gulf Coast, where it would be refined.

Now, this pipeline is uniquely problematic. First of all, the oil that we're talking about here comes from tar sands in Canada. And it tends to be thicker, dirtier, and more corrosive than typical light crude, which means it pollutes more. And it's more likely to leak out of the pipeline. So there has been opposition to this pipeline from day one. It looked as if President Obama might approve the permits for this pipeline, but he didn't. He actually declined to issue the permit in 2015.

Then, President Trump came into office, much friendlier toward energy companies. He actually approved the permit, and construction of this pipeline began last year. Some construction was scheduled to start this winter in US states like Montana and South Dakota. But of course, Biden got elected in November. And he has kind of telegraphed that he was going to kill this plan all over again. So it looks like this pipeline is dead for good.

KRISTIN MYERS: Right, and as we were talking about and we showed everyone a map while you were talking about this project. So a huge win, of course, for environmental activists. A lot of Native American activists had been protesting against this project and against these permits. So then, let's talk to us about the impact. What is the impact going to be on jobs, on the energy industry?

RICK NEWMAN: Well, the company that runs this pipeline, it's a Canadian company, not an American company, which I think is a factor here. But it's called TC Energy, and they're saying they're going to have to lay off about 1,000 people. I'm not-- they haven't made clear what percentage of those would be Canadians and what would be American. So I think we should assume some of those would be Canadians.

But look, these are job losses. And, you know, we're going to see a lot more of this under the Biden administration. And I think it's something Biden really has to be conscientious of if he makes other decisions like this-- and there are other decisions, such as drilling permits on federal land, what to do about new fracking permits and things like that.

If he just kind of casually kills a few oil and gas and coal jobs here and there, it's going to start to make it hard for him to get buy-in for this big transition he wants to make, the shift from carbon energy to much cleaner sources of energy.

So, you know, one of the things the United States has actually been really terrible at is what to do about workers whose jobs disappear as the economy evolves, as some factories go overseas, as the digital revolution takes over. We've just done a terrible job with the safety net for workers who kind of lose out. And Biden has to be really careful about this, or his big plans for a shift to more green energy are going to run into a lot of opposition

KRISTIN MYERS: I just want to give a quick reminder for everyone at home. Energy sector is lagging today, down over 4%, crude right now down about half of a percentage point. Thanks so much, Rick.

RICK NEWMAN: Yeah.