Pipeline or Pipe Dream?

A China-Bound Alternative to Keystone XL Is No Easy Feat

Rick Smith and Andrew Light explain the substantial hurdles Canada faces to building a tar sands pipeline to China.

Last September Canada’s Prime Minister Stephen Harper referred to the approval of the Keystone XL pipeline as a “no-brainer” for the United States. The pipeline would bring tar sands oil from Alberta to refineries in Texas. Nonetheless, the Obama administration rejected the pipeline’s cross-border leg starting in Alberta based largely on concerns about its possible environmental impact on the Ogallala Aquifer in Nebraska should a spill occur. Congress made repeated attempts to reverse the decision to no avail.

The Canadian government has upped the ante by publicly highlighting its efforts to build an alternative pipeline aimed at delivering tar sands to Chinese markets. Proponents of the Keystone XL point to this alternative as a reason to accelerate its approval. On a state visit last month, Prime Minister Harper openly courted the Chinese with the promise of tar sands oil. China, ever hungry for sources of coal and oil to fuel its booming economy, was receptive. Chinese businesses also have been buying into Canadian tar sands projects for some time now, with Petro China most recently buying out its partner on an Athabasica Oil Sands Corporation project for $674 million to take full control.

But on inspection the China-bound alternative to the Keystone XL—the Enbridge “Northern Gateway” pipeline—faces hurdles as big if not bigger than Keystone XL. Some groups in Canada call the fight over its approval the “defining environmental battle” of modern times, potentially determining which limits will be placed on the Canadian federal government’s energy and environment policies. The pipeline is now in the midst of a Canadian federal environmental assessment that will go at least to late 2013. This is later than the original approval process the U.S. State Department would have taken before Congress forced the Obama administration’s hand to reject the Keystone XL last January.

Here’s a look at the rough road ahead for the project.

Crossing the Rockies

First, there are some pretty big physical hurdles. As big as mountains, you could say. The pipeline would need to cross the Rockies west from Alberta to British Columbia going 1,172 kilometers up and down steep rock faces to ports where it will hook up to ocean-going oil tankers on the coast. This rugged terrain makes a rupture even more likely than in Keystone XL’s pipeline, which would have traversed a relatively flat terrain. A spill would put British Columbia’s Great Bear Rainforest, an ecological gem, as well as healthy wild salmon rivers and a diverse ocean ecosystem at risk.

From there the tar sands oil would be loaded onto supertankers, each one carrying eight times the volume of the entire Exxon Valdez oil spill. The tankers would need to navigate through treacherous waters like the Hecate Straight and Queen Charlotte Sound, part of which is considered the fourth-most dangerous body of water in the world, a region prone to hurricane-force winds and waves several stories high.

Putting coastal jobs at risk with little in return

But nature isn’t the only thing a spill would jeopardize, and this brings us to the second big hurdle facing the project: money. According to the British Columbia government the seafood industry and ocean-based tourism together create 45,000 jobs. Those 45,000 jobs depend on a clean and healthy ocean ecosystem. An oil spill could ruin this coastal economy as the Gulf states affected by BP’s Deepwater Horizon disaster know only too well.

And what is Enbridge offering in return? Apparently 217 long-term jobs for northern British Columbia—104 operating the pipeline and 113 in associated marine services. That means 200 jobs would be at risk in the region for every one job created by the project according to Enbridge’s own numbers.

Further, Enbridge estimates only 1,150 long-term jobs “throughout the Canadian economy” as a result of the project. Given those figures we can imagine the fight for approval through British Columbia to be an even heavier lift than we saw in the United States where fewer jobs were at risk against a larger number of jobs that could have been created by Keystone XL.

Running up against fierce opposition from First Nations

Then there’s the Canadian constitution. In Canada, indigenous peoples’ rights are protected under the constitution. While Canada’s adherence to this is far from perfect, a growing body of legal decisions give a strong say to affected indigenous communities in decisions about large development projects like the proposed pipeline.

The pipeline would pass through the territory of indigenous communities including the Carrier-Sekani Tribal Council, the Haida Nation, and the Yinka Dene Alliance, many of which have not signed treaties with the Canadian government, meaning that they have powerful leverage to stop or significantly delay the pipeline because their land has not been ceded.

And these communities are vocally opposing the pipeline and tanker project, with 130 of them signing the Save the Fraser Declaration and the Coastal First Nation Declaration. Indigenous communities whose territories make up more than 50 percent of the combined pipeline and tanker route do not support this project, and they’ve banned oil tankers and pipelines using their indigenous laws and authority, which are recognized under Canadian and international law. They have vowed to “form an unbroken wall of opposition from the U.S. border to the Arctic Ocean.”

The controversy even followed Prime Minister Harper all the way to China last month, with the Yinka Dene Alliance, five communities in central British Columbia, sending an open letter to Chinese President Hu Jintao raising human rights concerns related to the Canadian government’s treatment of indigenous peoples and opposition to tar sands oil.

These aren’t empty threats, either. The indigenous communities in central British Columbia took on big development projects in the past and won in the courts. And in the case of the Great Bear Rainforest, coastal First Nations communities partnered with environmental groups to create a plan for sustainable development, demonstrating these communities’ appetite for creatively finding income-generating options while protecting ecosystems.

Facing strong public opposition

In addition to indigenous communities, public opposition to the proposed pipeline and tanker project is building in British Columbia and across Canada. More than 4,000 Canadians signed up to be heard at public hearings for the project, including representatives from municipalities, fisherman’s unions, and tourism operators. In response to the Enbridge proposal, and appeals from other companies, 10,000 people signed petitions to ban oil tankers from British Columbia’s northern ports. Altogether some 80 percent of people living in British Columbia have voiced opposition to tankers off the coast.

Not so easy

The Canadian government may be threatening to take its tar sands oil elsewhere following President Barack Obama’s rejection of Keystone XL, but the pipeline aimed at China’s markets has mountains to climb. It will be years before the federal environmental review panel finishes its work, and a quagmire of legal battles after that is likely given First Nations’ resistance.

This one is definitely not a “no-brainer.”

Rick Smith is Executive Director of Environmental Defense, Canada. Andrew Light is a Senior Fellow and Director of International Climate Policy at the Center for American Progress.


[1] Environment Canada, “Marine Weather Hazards Manual – a guide to local forecasts and conditions 2nd Edition” (1990).

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Andrew Light

Senior Fellow