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eric reguly

European Business Correspondent Eric RegulyFred Lum/The Globe and Mail

This is part of Fort McMoney, an interactive documentary game that lets you decide the future of the Alberta oil sands, and shape the city at its centre. Joining the fray – and sharing their views along the way – are Globe columnist Margaret Wente and business reporter Eric Reguly. Read the introductory columns written by Mr. Reguly and Ms. Wente.

This week they debate the question: Should the Keystone XL pipeline go ahead? Read Ms. Wente's view.

Supporters of the Keystone XL pipeline can't win the environmental debate. Now they're having trouble winning the economic debate.

The supporters of the $7-billion (U.S.) pipeline that would carry Alberta crude 1,200 kilometres from Alberta to Nebraska, then on to the Gulf coast refineries, argue that it would inflict only marginal damage on the environment.

That argument is not credible. The Keystone cheerleaders, among them Prime Minister Stephen Harper, TransCanada, the pipeline's backer, and just about every sentient being in Alberta, insist the pipeline is vital for the oil sands' profitability and expansion. The greater the expansion, the greater the carbon dioxide emissions, end of story. Remember, oil sands production is more energy intensive, and hence dirtier, than conventional production.

The economic argument for Keystone is falling apart because the United States is swimming in oil and natural gas, thanks to the shale reserves. But TransCanada's own bumpf calls Keystone "a critical infrastructure project for energy security." How so? The International Energy Agency last month said the United States would surpass Saudi Arabia as the leading oil producer by 2015. The Americans are more interested in exporting oil and gas (in the form of liquefied natural gas, or LNG) than importing oil they really don't need.

A pipeline between the United States and Mexico is the hot pipeline play, not Keystone, which – sorry Alberta – is becoming a sideshow. Spending billions on a pipeline that will guarantee rising Canadian carbon dioxide emissions while delivering dubious economic benefits to the United States is a win for the Alberta oil industry and no one else.