The Hook

Canada’s oil sands industry will continue to expand rapidly with – or without – a controversial pipeline to Texas, a new report concludes.

“Production levels of oil sands crudes,” reads a study written by EnSys Energy and commissioned by the U.S. Department of Energy, “would not be affected by whether or not [Keystone XL] was built.”

TransCanada’s Keystone XL is a $7 billion proposal to ship massive volumes of bitumen to Gulf Coast refineries. National environmental groups, rural Texans and dozens of congressmen have voiced opposition to the project.

Many opponents worry the pipeline will increase U.S. dependence on carbon-intensive Alberta oil.

The U.S. State Department will likely make a decision on Keystone XL in coming months.

Whatever the outcome, concludes the EnSys report, current industry growth projections, which envision a near doubling of the oil sands industry by 2020, will likely not be affected.

The reason why is that Keystone Xl only represents one of many potential options for shipping crude to hungry markets, it said. Others include expanding existing pipelines to B.C.’s west coast or the American Midwest.

However, it does note that in the unlikely scenario that none of these options proved feasible, some oil sands production could be "curtailed" after 2020.

"While this may seem an unlikely result according to the modelers," Natural Resources Defense Council attorney Liz Barratt-Brown writes, "It makes the case that production is indeed tied to the building of pipelines."

The report also notes that Keystone XL represents an opportunity to “essentially eliminate” dependence on Middle Eastern fuel in the long term.

Geoff Dembicki reports for the Tyee.