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Keystone XL future uncertain, Canadians explore new Arctic pipeline options

CBC NewsEye on the Arctic

The government of Canada’s province of Alberta is looking at yet another pipeline option to get its oil to market should the Keystone XL or Northern Gateway pipeline proposals not come to fruition. Calgary consulting firm Canatec Associates International Ltd. has been hired by the province to study the feasibility of moving crude from the oilsands up to a port in the Northwest Territories.

It has been estimated $30 billion a year stays locked in Alberta’s oilsands because there is no way to get it to market.

TransCanada’s Keystone XL pipeline to the Texas Gulf Coast still needs the approval of the U.S. State Department and President Barak Obama.

Its proposal to convert an existing pipeline to pump bitumen eastward to refineries in Quebec and New Brunswick is also controversial.

Meantime, Enbridge’s pipeline proposal west to Kitimat is meeting with fierce resistance in B.C. from environmentalists and Aboriginal groups.

So the Alberta government is looking at another option to build a pipeline from the oilsands up the McKenzie River Valley to a proposed deep-water port at Tuktoyaktuk, a community in Canada’s Northwest Territories (N.W.T.)

From there it would be loaded onto oil tankers and head to Asian and European markets.

“Really it speaks to the importance that access to markets has,” said Pembina Institute policy analyst Nathan Lemphers.

“The industry is facing an impending bottle neck of take-away capacity. They don’t have the capacity to get their product to market because pipelines are harder to build then they have been in the past,” he said.

But a northern route could be just as difficult to sell as the other pipeline options on the table, he added.

Northwest Territories Premier Bob McLeod has said he is interested in a northern pipeline.

McLeod recently completed a power-devolution deal with Ottawa that could make the project even more attractive for the N.W.T.

Doug Matthews, an Alberta energy writer who worked for the N.W.T. government on resource issues for 25 years, said the proposed pipeline would need to accommodate at least 500,000 barrels a day to be feasible.

“Such a line of course, and given that it would be shipping bitumen I would think primarily, is going to attract an awful lot of environmental opposition,” he said.

But Matthews said most northerners, keen to develop their own natural resources, would be supportive.

“There’s no reason why N.W.T. resources couldn’t link into that pipe,” he said.

Getting the pipeline built would only be one part of the equation, Matthews said.

“The port itself is relatively undeveloped right now in terms of tankers. It’s never been used for that other than barge loading and off-loading,” he said.

“You would need some fairly significant dredging in order to allow the larger tankers to come in and load up, or run a pipe from the coastline farther offshore to the deeper waters,” he said.

This story is posted on Alaska Dispatch as part of Eye on the Arctic, a collaborative partnership between public and private circumpolar media organizations.