WASHINGTON — Opponents of Canada's oil industry are celebrating this week over news they see as vindication of a pipeline-fighting strategy that began in the United States with Keystone XL.
Their burst of enthusiasm was prompted by news that Shell was shuttering an 80,000-barrel-a-day project — and specifically citing the lack of pipeline infrastructure as part of the reason.
That announcement prompted a congratulatory message from a political activist who began organizing Nebraska ranchers opposed to Keystone XL five years ago.
Jane Kleeb emailed ranchers Wednesday to say their work against the Alberta-to-Texas project was having a ripple effect across the continent, with the expansion of the Alberta oilsands now in doubt.
"Turns out fighting Keystone XL with all the might of small and large groups in U.S.A. and in Canada is working," Kleeb wrote.
"Not only to stop Keystone XL but to stop the tarsands expansion."
Kleeb helped organize the first of several major fights against export pipelines from the land-locked oilsands, with that so-far-successful stalling effort against Keystone XL now being replicated in protest efforts against different pipelines in Canada.
But advocates for new oil infrastructure have been able to parry their logic in recent years. They've pointed to the ongoing surge in Canadian production, the increased exports, and the dramatic rise in oil-by-rail which actually pollutes far more than pipelines as proof the pipeline-fighting was counter-productive.
The timing of this week's announcement, however, made Greg Muttitt appear like a fortune-teller.
Shell's cancellation notice came just hours after Muttitt released a 40-page report that predicted the growth of Alberta's oilsands would be stalled — and the cause would be a lack of pipelines.
His report for the anti-oilsands group Oil Change International had offered a three-part conclusion: pipelines are almost full; rail is too expensive to justify new projects; and oilsands expansion is about to stall.
This is good news, according to his group.
Funded by environmental and progressive organizations like the Rockefeller Brothers Fund and the Tides Foundation, OCI concurs with studies citing oilsands expansion as a major climate liability.
One that appeared in the journal Nature concluded that to avoid a disastrous temperature increase of 2 degrees C, the vast majority of proven oil reserves need to remain untapped — including 85 per cent of the oilsands.
Shell's announcement proved his report right, Muttitt said.
"That was a very significant confirmation of our analysis. And fortunate timing, from our standpoint," he said, crediting activists for the anti-pipeline movement of recent years.
An energy economist agrees the pace of oilsands expansion is in doubt.
But he argues that other market forces are playing a starring role in this production. The pipeline-fighters, he argues, can claim a cameo appearance at best.
"It's taking credit for something they are influencing, but not responsible for," said Michal Moore of the University of Calgary.
"It'll be the price of oil. And (it'll be) the fact that the world appetite for oil has slacked off and there are a lot of other places producing oil today: Brazil, Mexico, Nigeria, down in Indonesia, it's available from so many different places in a lighter, sweeter characteristic that it's just hard for Canadian heavy oil to compete, other than at the margin."
Research from other energy economists also suggests oil prices are a make-or-break factor in total output. The study for the international Deep Decarbonization project examined two scenarios, based on price.
Both scenarios showed Canadian production increasing into the 2030s. But they levelled off at vastly different amounts: at a long-term price of more than $100 a barrel, they predicted more than six million barrels per day of production from Canada. At under $70 a barrel, production would still grow a bit but stall at four million barrels per day.
Alexander Panetta, The Canadian Press