Oil Sands Pipeline Protests to Move North (TRP, ENB, KMI)

The latest delay to a US decision on whether or not to allow the Keystone XL pipeline project has shifted attention to two other proposed pipelines that would carry bitumen from the Alberta oil sands to Canada’s west coast in British Columbia. TransCanada Corp. (NYSE: TRP), builders of the proposed Keystone XL pipeline, has agreed to a pipeline routing change that would avoid the environmentally sensitive Nebraska sand hills, but a new Northern Gateway pipeline proposed by Enbridge Inc. (NYSE: ENB) and an expansion to the Trans Mountain pipeline system owned by Kinder Morgan Inc. (NYSE: KMI) avoid the border crossing that has hampered the Keystone XL pipeline.

A group of three environmental organizations has released a new study on the Northern Gateway and Trans Mountain proposals that “outlines the potential dangers of bitumen transportation and the risks of spills to the environment and the economy in a region that depends on healthy fisheries, lands, and waters.” The ultimate goal of the pipeline protests is to stop development of the oil sands, which the groups claim is 23% more carbon-intensive than conventional oil extraction processes. A competing study has estimated that oil sands mining is about 6% more carbon-intensive.

For its part, Enbridge dismisses the new report saying that the company has already dealt with the objections in its regulatory filings.

While it’s never wise to say never, the goal of stopping development in the oil sands is almost certainly never going to be realized. Likewise, killing any way of transporting the bitumen either to the coast or to the US is also very unlikely. Without a way to get the oil to market, Canada will lose billions of dollars a year in tax revenue and employment. There will be a lot more sound and fury over the various pipeline proposals, but in the end, the Canadian government is going to develop the oil sands and get the bitumen to market somehow.