Opponents’ Latest Opportunism

A few weeks ago, OSFC noted that Keystone XL opponents – faced with overwhelming support for Keystone XL from Democrats and Republicans in Congress and the American public – have been desperately grasping at straws.

That’s exactly what happened on Friday night when Keystone XL opponents “cheered” the news that British Columbia had urged Canadian regulators to reject the Northern Gateway oil pipeline, which would transport oil sands to the west coast of Canada.  Of course, opponents immediately tried to link this situation to the decision on Keystone XL, pointing to their feeble hope that if they stop both pipelines, they stop oil sands development altogether.  As foremost opponent Bill McKibben said, “British Columbians just slammed the door on the most obvious other way, so now it’s up to President Obama.”

The press, unsurprisingly, latched on to this theme: the New York Times reported that it was “a severe blow” and as Politico put it, the situation surrounding the Northern Gateway pipeline is “a move that the greens say also bodes ill for Keystone XL.”

Not so fast.  Just a quick look beyond the main headline shows that the process is far from over. First of all, British Columbia said that it could not support the project “in its current form” or “at the present time.” As Reuters reported, Enbridge still has the opportunity to meet certain conditions before a final decision is made:

World-leading oil-spill response and clean-up systems were among five conditions British Columbia Premier Christy Clark demanded last year before the province would approve any heavy oil pipelines across its territory. The province does not believe that bar has been met.

However Enbridge said it still expects to be able to meet Clark’s conditions and that the province’s rejection of the project is premature.

‘The five conditions cannot be fully met until the end of the Joint Review Panel process,’ Janet Holder, Enbridge’s executive vice-president, western access, said in a statement. ‘We are working hard to meet the conditions and earn the confidence of the government and the people of B.C.’

Friday was the final day for written submission to the Joint Review Panel which will decide if the project should be approved. The final hearings for the project begin on June 17.

But the British Columbia government is just one participant in the review process.  The Joint Review Panel will consider the views of British Columbia as well as the Alberta government, which has expressed strong support for the project.  Canada’s Minister of Natural Resources Joe Oliver also highlighted in a release that the process is not over.  As he said, “An independent, comprehensive, science-based evaluation of the proposed Northern Gateway Pipeline is currently underway” – and while he stressed the importance of safe development, he also emphasized that “diversifying our export markets for energy remains a critical priority for our government.”  In the end, it is a federal process and ultimately the decision will be made by the Federal Government.

Second, opponents can hardly claim that stopping these pipelines will stop Canada’s oil sands from being developed.  Keystone XL and the Northern Gateway pipeline are just two of the six pipeline projects under development to bring Canadian oil sands to the markets: two pipelines routes to the west, two to the south and two to the east.

Furthermore, contrary to opponents’ claims, companies are investing to expand rail capacity to transport Canadian oil sands.  As the Department of State noted, companies have invested in the construction of over 28,000 new insulated rail tank cars – specifically designed for the transport of bitumen – which “provide evidence that industry considers shipping railbit or bitumen to be an economic option, and that it can be employed in large quantities.”  Reuters also recently reported that Canada’s largest train operator, the Canadian National Railway, is planning to expand its rail capacity to meet the growing demand to transport crude oil:

Shipments of crude by rail in the United States have surged to an estimated 340,000 bpd in 2012 from around 11,000 barrels per day in 2007, according to data from the Association of American Railroads.  If rail shipments in Canada are added, the volume could top 400,000 bpd, more than 4 percent of North American crude production and equal to a new, large pipeline.

Over the past three years, Asian investments in Alberta’s oil sands have exceeded $15 billion, and with the recent acquisition of Nexen, the Chinese government alone will control almost 10 percent of oil extraction in the region.  These investments haven’t been made just to leave the oil in the ground.

Opponents better not pop the champagne yet: in order to have their dream, they would have to stop every pipeline and every railroad – an impossible feat. Regardless of the Northern Gateway pipeline and Keystone XL’s fate, Canadian oil sands will be extracted and transported – and how much better it will be if these pipelines are built.

Speak Your Mind