(April 25, 2013) Environmentalists are successfully ring-fencing the province.

This article was first published by the National Post.

Alberta’s oil may remain locked in for decades, or, as a practical matter, forever. The environmental lobby is deciding its near fate; the global marketplace its ultimate destiny.

The Alberta and federal governments have ambitious forecasts for the Alberta tar sands – official estimates based on industry plans call for exports to more than double by 2021, from 1.7 to 3.7 million barrels per day, and to triple to 5 million barrels per day by 2035. But there’s a catch: To boost exports by two million barrels per day between now and 2021, Canada would need the equivalent of about four Keystone XL pipelines (Keystone XL would carry about 500,000 barrels per day). To meet the 2035 figure would require about six Keystone-equivalents.

The government thought it was prudent in making its forecasts, taking into account numerous factors including future energy prices, capital and labour shortages, and environmental constraints such as the need to address tailings ponds and greenhouse gases. But it paid short-shrift to the one factor that may prove decisive to the industry’s fate – the environmentalists’ plan to ring-fence Alberta by blocking any new pipeline leaving Alberta. A quarantine of tar sands oil – seen by many as poisonous to human health and the environment – is in effect. No one can know if the quarantine will lift in time to maintain Alberta as the heart and soul of Canada’s resource economy.

Keystone will almost certainly be approved by the Obama Administration, most experts assure. But an approval is far from certain. Keystone primarily benefits Canadians — it is designed to ship Canadian oil through to the U.S. Gulf coast, from where it can be exported overseas at world oil prices, rather than be sold at a discount, as it now is, in a glutted American market. Canada’s gain from this ability to ship oil out of North America — $10 per barrel — would be America’s loss. Neither is Keystone a winner for the U.S. in terms of jobs – a U.S. legislator this week estimated it would provide but a few thousand temporary jobs, and a few dozen permanent jobs.

The U.S is slated to be a net oil and gas exporter by the end of this decade

Neither does the U.S. need Keystone to become energy secure: The U.S is slated to be a net oil and gas exporter by the end of this decade and by 2035, when Canadian energy planners hope to export five million barrels a day, the U.S. is expected to be oil self-sufficient – it then wouldn’t need a drop of Canadian oil. Little wonder that the U.S. has subjected Keystone to one delay after another, with another one in the offing – in a stinging rebuke, the Environmental Protection Agency this week asked the U.S. State department to reopen its review of Keystone.

Even if Keystone ultimately obtains the Obama Administration’s blessing, it could be tied up in the courts for years. President Obama recently revised NEPA – the National Environmental Policy Act – to make global warming grounds for a challenge by the public. U.S. environmental organizations would be certain to take up that challenge.

Canada has other pipeline options – two proposals would see Alberta oil shipped west to the Pacific coast, from where it could be exported to Asia. Another two would see oil shipped east to gain access to the Atlantic. And a fifth involves another pipeline south, to Louisiana. But all face regulatory approvals and opposition, whether from environmentalists, politicians, nationalists or natives. It is easy to see some of these, if not all, suffer long delays, leading tar sands developers to slow or abandon their plans.

During that hiatus, the rest of the world will not sleep. Thanks to new technologies that allow the exploitation of previously uneconomic shale oil and shale gas, other countries have begun to develop their energy resources. China has vast amounts of these new-era fossil fuels. Russia and Australia, too. And Europe.  And Asia. And South America and Africa, which have barely begun to exploit even their conventional oil and gas reserves.

Today it makes economic sense for Canadian industry to invest the tens of billions required to build Keystone and other pipelines, and to develop the tar sands projects that will fill them with oil. Tomorrow, it may not. The capital that doesn’t develop Canada’s energy resources will have ready alternatives to pursue. In the same way that shale gas development in the last decade quickly halved natural gas prices, shale oil development may soon drive down oil prices, to the point where further investments in tar sands are shelved indefinitely. This is a palpable risk, for the economy of both Alberta and Canada.

Lawrence Solomon is executive director of Toronto-based Energy Probe. Follow Lawrence Solomon on Twitter.