Oilsands growth continues, with or without Keystone

Natural Resources Minister Joe Oliver says even if approval for the Keystone XL pipeline is denied, other ways to transport oilsands bitumen to the U.S. would be contemplated.

Minister confident pipeline approval will come, but vows development will continue regardless

Keystone protests

11 years ago
Duration 2:36
Hundreds gathered on Parliament Hill Monday to protest the proposed Keystone pipeline, CBC's Margo McDiarmid reports

One way or another, more oilsands bitumen will leave Alberta, whether or not protests succeed in stopping TransCanada Pipeline's Keystone XL pipeline from Edmonton to Houston, Texas, Canada's Natural Resources Minister Joe Oliver says.

"If this project (Keystone XL) were to fail — and I don't believe it will — there would obviously be others that would be contemplated. So it is a certainty that the oilsands will be developed for the benefit of Canada," the minister said.

But that scenario is the nightmare of every environmentalist protesting against further development of the fossil fuel resource.

"If we are going to burn everything that is under the boreal forest in Alberta, then it is game over for the climate," said Susan Casey-Lefkowitz, executive director of the Natural Resources Defense Council, an American environmental lobby group.


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Oliver admits that if the Keystone XL project fails to gain regulatory approval in the U.S. it would cause delays. He called that possibility a potential "lost opportunity."

But financial analysts aren't too worried about the prospect.

"I just don't see potentially one pipeline route shutting down as being a limitation or otherwise shutting down the oilsands," asserted Carl Kirst, a pipeline specialist for BMO in Houston.

Alternate routes

Government and industry have alternatives to get the bitumen out of northern Alberta. Oliver mentioned Enbridge's Northern Gateway Pipelines. They would run from Bruderheim, Alta., to Kitimat, B.C., carrying bitumen to the coast and condensate to Alberta. The project doesn't yet have regulatory approval.

Kinder Morgan, an American pipeline company, has an existing pipeline that goes from Edmonton to the Port of Vancouver. They are hoping to increase the capacity of the Trans Mountain Pipeline.

There is also the possibility of transporting bitumen by rail. There are technical diffculties with this option but rail companies are investing in new equipment in anticipation of more oilsands business.

The possibility of rail transport was investigated in the U.S. State Department's August 2011 environmental impact statement on Keystone XL. It was not a preferred option.

"What they found ... was that, in fact, it was both more greenhouse gas intensive and it had more of a direct impact on local communities," said Kirst.

In an interview Monday with Evan Solomon, host of CBC’s Power & Politics, Oliver said Canada doesn’t have the refining capacity to handle the oil that will be sent to Texas via Keystone’s XL pipeline.

"It would require the construction of two refineries, each one at a cost of $8 to $10 billion," he said.

"It’s uneconomic [to build a new refinery] and it’s up to the private sector. It’s obviously less expensive to use existing refineries than to spend $16 billion creating new ones. There hasn’t been a refinery built since the 1980s."

The Keystone XL pipeline has already received regulatory approval to go ahead on the Canadian side of the border. It is now awaiting a presidential permit from the U.S. which will allow it to cross the border. Public hearings currently are being held in the U.S. to determine if the pipeline is in the national interest.