On the day the U.S. State Department nixed the Keystone XL pipeline and the one big B.C. First Nation to sign on to the Northern Gateway pipeline reversed its position, you’d think energy companies and investors would be thinking twice about pouring money into still more oilsands production. You’d be wrong.
A look at the Alberta Ministry of Finance’s inventory of major projects, updated to December, shows there are 66 projects in the oilsands either under construction or planned to break ground within three years worth a whopping $133.6 billion. These include Phase 2 of Imperial Oil’s Kearl project ($8.9 billion), Total’s Joslyn North ($8.9 billion), Devon’s Jackfish 3 ($1.3 billion), Southern Pacific’s MacKay Phase 2 ($1.4 billion), MacKay OPCO Phase 1 ($1.3 billion) and Laricina Energy’s Germain phase 2 ($1.1 billion).
Investment in the oilsands, in other words, has resumed to the levels it was at before the recession and is headed into uncharted territory. And yet Keystone XL will at the very least be delayed another year or two. And Gateway? The “unbroken wall” of opposition promised by aboriginal activists seems to be getting stronger as Gitxsan hereditary chiefs voted by a wide margin to rescind their negotiating team’s agreement with pipeline proponent Enbridge.
New oilsands production needs new pipeline capacity on the five- to 10-year horizon to get to markets. Either pipelines get approved, or spending on new extraction capacity will have to come down. Something has to give.