Obama delay of Canadian pipeline won't stop tar sands

ByABC News
November 14, 2011, 8:10 PM

— -- The Obama administration's delay of a controversial U.S.-Canadian oil pipeline, cheered by environmentalists, could jeopardize the $7 billion project but won't stop all efforts to develop Canada's vast stores of tar sands.

Other pipeline projects are moving forward despite Thursday's announcement that a final decision on the 1,700-mile project will be delayed until after the 2012 election. The Associated Press reported Monday that pipeline owner TransCanada announced it would reroute its pipeline out of the environmentally sensitive Sand Hills area of Nebraska. If approved, the Keystone XL pipeline would carry up to 700,000 barrels of tar or oil sands from Alberta, Canada, through six U.S. states to oil refineries on the Gulf Coast.

"There are a lot of pipeline alternatives out there. Oil will move to market. It's just a question of which path it will take," says Mark Lewis, a lawyer who represents oil companies for the Washington-based Bracewell & Giuliani firm.

•Calgary-based Enbridge and Houston-based Enterprise Product Partners are proposing an 800,000-barrel-per-day Wrangler Pipeline to carry heavy crude from Cushing, Okla., to the Gulf Coast. They've received recent industry commitments.

"They're firm enough to move forward," says Enbridge spokesman Larry Springer. He says its existing Alberta Clipper line, which moves oil into the United States from Alberta, can be expanded from 450,000 barrels per day to 800,000 by adding pumping stations.

•Houston-based Kinder Morgan has three pipelines carrying tar sands from Alberta into the U.S. It's currently asking shippers for commitments should it expand one of them and convert the Pony Express line from carrying gas to 210,000 barrels of oil per day from Guernsey, Wyo., to Cushing, Okla., says spokeswoman Emily Mir.

•Other companies have talked about reversing existing pipelines to carry oil from the Midwest to the Gulf Coast instead of the opposite direction.

"These alternatives eat away at the rationale for Keystone XL," says Martin Tallett, of EnSys Energy.

Calgary-based TransCanada says the project's delay doesn't mean its demise. "We remain confident Keystone XL will ultimately be approved," the company's chief executive, Russ Girling, said in a statement, citing its expected job creation and reduction of U.S. dependence on foreign oil sources.

Environmentalists, who campaigned vigorously against the pipeline by arguing that the development of tar sands emits more greenhouse gases than that of other oil, welcomed the State Department's announcement that it would reroute part of the pipeline.

"This decision represents a groundswell of opinion that we don't want dirty tar sands in the U.S.," says Susan Casey-Lefkowitz of the Natural Resources Defense Council. She says it might not stop all its development but will slow its pace and send a "chilling message" to oil companies.

"This is the end of Keystone XL," predicts Mike Tidwell, director of the Chesapeake Climate Action Network. Yet if Obama loses his re-election bid, he adds: "All bets are off."