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Brian Ferguson, president and CEO of Cenovus Energy, addresses shareholders at the company's annual general meeting in Calgary, Alberta, April 27, 2011.Todd Korol/Reuters

As U.S. legislators attempted to speed approval of the Keystone XL oil pipeline, a major Canadian energy producer underscored the high stakes for the oil sands if the controversial project is not built.

The TransCanada Corp. pipeline proposal would bring Canadian crude to refiners on the U.S. Gulf Coast. It has stirred substantial debate in the U.S., with critics suggesting it will raise gasoline prices and create the risk of spills in areas that are important water sources.

Supporters say it's a much-needed link for U.S. jobs and energy security. On Tuesday, a Republican-sponsored bill directing the Obama administration to make a decision on the Keystone line by Nov. 1 passed the House of Representatives by a vote of 279-147.

But the uncertainty over the pipeline's future is beginning to stir market concern, particularly around fast-growing companies like Cenovus Energy Inc., which said Tuesday it is counting on Keystone XL to siphon away its fast-growing output.

Cenovus is "not planning on any other scenario other than Keystone XL getting approved in a fairly timely way," chief executive officer Brian Ferguson said on a quarterly earnings call.

"We continue to plan on the basis that it will get approved."

TransCanada has maintained that it believes Keystone will be approved. In a subsequent interview, Mr. Ferguson said Cenovus does have other options if Keystone runs into difficulties. He pointed to existing crude pipelines operated by Kinder Morgan Canada and Enbridge Inc. that bring oil to the West Coast and U.S. Midwest.

"So there's lots of other of other outlets," he said. But some of those pipelines are completely full - Kinder Morgan's TransMountain system, for example, has been turning away oil for months, and Mr. Ferguson acknowledged that "Keystone itself is very important to industry."

Indeed, Canaccord Genuity analyst Phil Skolnick pointed to the company's recent moves to ratchet up oil sands growth - Cenovus now intends to reach 500,000 barrels per day of net production by 2021, nearly four times its current output - as a potential risk.

"There's some danger in accelerating your growth … if you don't have a place to put that," he said.

Others, however, believe industry is unlikely to find its production trapped inside Alberta. A series of proposals to build new pipelines to the Gulf Coast from the continent's major oil hub at Cushing, Okla., could add capacity rapidly enough to ferry away Canadian crude, said Chad Friess, an analyst with UBS Securities.

"There's a heck of a lot of solutions," he said. The problem: Keystone XL offers contracted capacity, which assures oil companies an outlet. Other pipelines are unlikely to offer similar guarantees, creating more uncertainty over the export of oil sands barrels, and the prices companies will be able to attain.

For now, however, oil sands companies are seeing heady profits, amid crude prices that continue to flirt with triple digits. Cenovus in particular has reported strong financials, with second-quarter cash flow of $939-million, or $1.24 per share, 75-per-cent higher than the same quarter in 2010, and well ahead consensus estimates of 97 cents. Profit was $655-million, up from $183-million a year ago. Much of the gain was attributed to strong refining margins, and to a $65-million decrease in royalty payments, thanks to a recalculation of the government's take stemming from additional capital investments made by the company.

Refining has been strong enough for Cenovus that the company has begun looking at expanding that arm of its business as it adds oil sands capacity.

"We'd be certainly looking at a variety of arrangements to access added refining capacity in the context of being a large and growing heavy oil producer," Mr. Ferguson said, suggesting that the company could look to supply arrangements with existing refineries, or investments in adding new refining capacity.

With regards to its oil sands expansion, Cenovus offered a more modest outlook on capital costs than natural gas giant Encana Corp., which last week said costs are rising by 4 to 6 per cent in Canada, and 10 to 12 per cent in the U.S.

Cenovus pegged cost increases at 3 to 5 per cent, a figure the company said is a sign of a healthy industry.