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Future of Alberta pipeline anything but certain
News Articles Featured | The Oklahoman | July 20, 2011
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THE Canadian province of Alberta has a natural resource it wants to sell, but buyers are balking. Oklahoma has a natural resource that buyers want to acquire, but the state is loath to let it go.
Free markets typically operate through the exchange of goods between willing buyers and sellers. The process is skewed when provincialism and/or environmental concerns enter the mix.
The products referenced above are valuable. Alberta’s oil and southeastern Oklahoma’s water would fill obvious needs. But Americans have developed a resistance to Canadian oil imports. And provincialism in Oklahoma has created a resistance to selling our water.
A probable result of the first resistance is continued overreliance on oil imported from unstable regions. A certain result of the second resistance is the wasting of a resource that could be transferring Texas dollars to Oklahoma coffers.
Canada’s oil won’t evaporate. It will either be sold now or later, either to the United States or to another buyer. Oklahoma’s excess water is wasted. Millions of gallons leave the state each day instead of being tapped and sold. This is a resource the state can’t get back: Once the water reaches the Red River, it’s undrinkable and unmarketable.
Water, of course, is a renewable resource. Oil isn’t. Alberta’s valuable commodity, produced from oil sands, will eventually run out. This state’s water (we presume) will flow eternally. The question is whether it will continue to go unsold.
Expanding a pipeline to transport Alberta’s oil to Oklahoma (Cushing) has met stiff resistance from environmentalists. No matter what they say, the real reason they don’t like the project is an abhorrence of fossil fuels. But oil will come from other locations — just as coal will be in more demand at power plants if hydraulic fracturing used for natural gas production is restricted by environmental policies.
Stopping the pipeline — or stopping hydraulic fracturing — would thus be a Pyrrhic victory. Want to burn more “dirty” coal? Restrict “clean” natural gas production. Want to be more vulnerable to oil and gasoline price spikes due to Mideast instability? Restrict oil imports from within North America.
The water issue is harder to reckon. It’s not about environmentalism but petty provincialism and a rabid distaste for selling anything to Texans. If entitlements are the untouchable third rail for politicians at the federal level, our water is the bottomless third well for their Oklahoma counterparts.
Alberta is enjoying a boom due to advanced recovery techniques for turning tar-like bitumen into oil, most of which is sent to the U.S. A lot more would be sent if the pipeline is expanded.
Considering the hurdles the pipeline must clear, its future is uncertain. But its completion seems far more certain than the prospect of ever selling Oklahoma’s excess water to Texans.
Tagged with: keystone xl, transcanada, pipeline, oklahoma
