Canadian Oil Sands Remain Isolated as Pipeline Plans still Face Opposition

A provincial party in Canada announced its formal objection to plans by pipeline company Enbridge to build its Northern Gateway oil pipeline to the coast of British Colombia. The New Democrats complain the "high-risk, low-return" project isn't in the best interest of the western province. Canada's prime minister is claiming a political mandate to secure a prosperous economic future, but with provincial elections set for 2013, he might have to pursue that objective without the Enbridge pipeline.

Canadian First Nations are on something of a peace train of protests to express their opposition to the Northern Gateway pipeline. The project gained importance in the government of Canadian Prime Minister Stephen Harper after political wrangling in the United States started getting in the way of the rival Keystone XL pipeline planned for the southern U.S. coast. Environmental and political concerns, however, are growing in Canada.

Enbridge said the planned 36-inch diameter pipeline would carry an estimated 525,000 barrels of so-called tar sands oil from Alberta fields to the western port city of Kitimat. Opponents, such as aboriginal groups, complain the corrosive properties of tar sands could spell disaster for their coastal communities. There were an estimated 12 spills on the existing leg of the Keystone oil pipeline already and Enbridge is still dealing with a major tar sands spill in southern Michigan. There, law students found that federal regulations did little to protect the Great Lakes from the possibility of a major oil spill like the 2010 Enbridge leak.

Back in Canada, Adrian Dix, leader of the provincial New Democrat Party, issued a letter to Canada's National Energy Board complaining about the dangers from the Northern Gateway pipeline.

"Under the Enbridge proposal, British Columbia would assume almost all the project's risk, yet would see only a fraction of the benefits," he said in a statement. "By any measure, such a high-risk, low-return approach simply isn't in B.C.'s interests."

The tar sands oil pipeline debate, both in the United States and in Canada, has morphed into political debate rather than a matter of energy. Harper, marking the one-year anniversary of Conservative control, said he has "a mandate" to secure economic prosperity and much of that prosperity, to the tune of some 700,000 post-recession jobs, has come from the oil sector.

With Keystone XL stuck in the quagmire of the U.S. presidential race, it's good for Canada to get behind Northern Gateway. With provincial elections set for next year, however, the New Democrats may be in a stronger position to sway Canadian energy policy if they secure the leadership there. In the United States, environmental concerns over Keystone XL forced energy company TransCanada to change course in Nebraska. By this time next year, Enbridge might be forced to do the same in British Columbia.

By. Daniel J. Graeber of Oilprice.com