Keystone XL is Dead! Long Live Keystone Light


Fresh from President Barack Obama's decision to reject the Keystone XL pipeline, the Canadian government is already looking for new ways to export its tar sands oil. After all, one common argument in favor of Keystone was that if TransCanada's Keystone was rejected, Canadian tar sands oil could still reach China and other power hungry Asian markets, albeit from a pipeline built across Canada. Right now, Enbridge is attempting to build such a pipeline, the Northern Gateway.

Call it Keystone Light. 

The $5.5 billion Northern Gateway would transport 525,000 barrels a day of oil from Alberta to Kitimat, a port in British Columbia. Northern Gateway could be an enormous bonanza to Alberta. At current market prices, Alberta's 173 billion recoverable barrels of tar sands are worth upwards of $15.7 trillion. (That's trillion with a "T.")

But Northern Gateway still raises concerns from environmentalists and 55 First Nations (native tribes). This coalition is worried about oil spills (in 2010, a million gallon Enbridge spill led to almost $600 million in clean-up costs), environmental degradation, and climate change. Most provocatively, climate activist and a leading opponent of Keystone, Bill McKibben, once compared tar sands to a "carbon bomb" for the planet.

Of course, Enbridge and other proponents won't give in so easily. By offering First Nations jobs, contracts, and a 10 percent stake in the pipeline, 20 of the 43 tribes affected by the pipeline now support Northern Gateway. Meanwhile, advocates are emphasizing energy security and re-branding tar sands as "ethical oil" (it's better to fund Alberta than Saudi Arabia). In addition, nearly half of British Columbians support the project, with only a third opposed. (All the more impressive as BC is usually a bastion of the left and environmental causes.)

Still, the Northern Gateway is far from assured. A decision won't be made by Canada's National Energy Board until late 2013. That could give green and tribal activists enough time to stymie the pipeline. After all, in an October 2011 National Journal poll, 91 percent of energy and environmental experts predicted Keystone would be approved.

But for pipeline proponents, there is a drop of good news. The Obama administration's decision to reject the Keystone pipeline will not affect Keystone beer:

Is Coors worried its Keystone beer is tainted because of the pipeline of the same name?

"They share the same name, but that's where the connection ends," Coors spokesman Colin Wheeler said in an e-mail to National Journal. "As for potential impact on the brand, it's highly unlikely."

Cheap college students rejoice!

For more on the Keystone XL pipeline, be sure to read Ronald Bailey's take.