Although the differential between Western Canadian Select crude oil and other grades such as West Texas Intermediate and Brent will impact decisions to engage in new projects should it persist along current lines, there are approximately 170 billion barrels of reserves within Canada’s oil sands region waiting to be extracted for the benefit of the domestic economy.

Energy production in the Great White North hasn’t been as lucrative of late because of this crude-pricing differential, which is costing the country as much as CAD19 billion a year–or about CAD50 million a day–in lost wealth.

But it beggars belief to suppose that current resistance to new infrastructure will be sufficient to stop exploitation of the Canadian oil sands. The shale revolution in the US has tempered somewhat the acute need for this North American resource. But long-term global demand trends suggest oil will be in significant use for the foreseeable future.

Producers are already on track to more than double output from the Canadian oil sands to 3.5 million barrels a day by 2025, according to the Canadian Association of Petroleum Producers. Production has already grown from just over 1 million barrels a day in 2005 to about 1.6 million in 2011.

Whether TransCanada Corp’s (TSX: TRP, NYSE: TRP) Keystone XL pipeline brings Canadian oil sands crude south to Gulf of Mexico refineries for entry to the global market through US channels or Enbridge Inc’s (TSX: ENB, NYSE: ENB) Northern Gateway pipeline moves it west from Alberta to Kitimat, British Columbia, for eventual delivery to Asia or new efforts by companies such as Kinder Morgan Energy Partners LP (NYSE: KMP) to transport it by rail to processing centers, this vast resource will not be allowed to lay dormant.

Assume the Obama administration, through new Secretary of State John Kerry, rejects Keystone XL. Current odds favor completion of Northern Gateway. Canadian Prime Minister Stephen Harper has already gone to great lengths to repair relations with Chinese leaders that he initially mishandled when he assumed office in 2006. This is all about establishing ties with Eastern markets for Canadian exports, primarily of the energy variety.

Northern Gateway, as does Kinder Morgan’s TransMountain pipeline, which would also carry oil to British Columbia’s coast, faces opposition similar to that mounted against Keystone XL in the states but would almost certainly be pushed through on economic grounds.

Those who don’t favor Keystone XL, TransMountain and Northern Gateway are vocal, emotional and worthy of media attention.

At the same time, however, a recent Angus Reid poll found that of 800 people surveyed 9 percent of British Columbians completely support Northern Gateway, while 27 percent support the pipeline but could change their minds based on economic or environmental considerations. A third of respondents say they completely oppose the pipeline.

So that’s 36 percent roughly in favor, 33 percent diametrically opposed. Eventually, when Canada’s National Energy Board renders its opinion before Dec. 31, 2013, the economics will win out. And an effort that will go some distance toward relieving a pricing disparity that according to one estimate is costing each Canadian about CAD1,200 per year.

Incidentally, opponents of Keystone XL in an uproar on environmental grounds might want to consider, as Popular Mechanics suggested last week, that not building the 1,200-mile pipeline that would bring 800,000-plus barrels of oil per day from Alberta to the Gulf Coast invites even greater potential blight on the landscape–or, as it were, the seascape:

Tankers carrying the oil would join the heavy marine traffic that already churns through America’s Gulf of Alaska and close to the Aleutian Islands, areas with rough seas and abundant marine life. The Gulf of Alaska is where a Shell oil rig recently ran aground. After crossing that region, the tankers would then have to navigate some of the most dangerous waters in the North Pacific, including Unimak Pass, a harrowing 10-mile-wide passage in the Aleutian Islands that is an important habitat for sea lions, gray whales, tens of millions of seabirds, and other species.

Tankers at sea are more accident-prone than pipelines on dry land. And if a spill occurs at sea, it can be difficult to contain and is nearly impossible to clean up.

A recent report published by Royal Bank of Canada (TSX: RY, NYSE: RY), Macroeconomic Impact of the WCS/WTI/Brent Crude Oil Price Differentials, concluded that increasingly unfavorable terms of trade wrought by importing energy in the east for manufacturers and exporting energy to the US at lower prices “would ultimately first manifest themselves in the form of reduced business investment.”

Statistics Canada estimated that direct capital expenditure in the oil and gas industry in 2011 amounted to approximately CAD56 billion dollars, roughly equivalent to 3.2 percent of gross domestic product (GDP) and 15 percent of total national capital investment by all industries.

This means oil and gas production is one of the most valuable industries in Canada.

Alberta is already experiencing sharply lower oil royalties than estimated, which has left the provincial government scrambling to cover a CAD6 billion revenue shortfall. Officials built into budgets an average oil price of CAD86 per barrel for 2012-13 but have instead seen prices hovering near CAD70 and dipping recently into the CAD60s. A budget shortfall means running a deficit, increasing taxes and/or decreasing spending, all of which have an impact on ordinary people.

In 2005 the Bank of Canada noted that higher oil prices benefited the economy, as the boost from increased investment outweighed the drag on energy consumers such as factories. But a little less than a year ago the BoC provided an updated view on the impact of global energy markets on the domestic economy.

In an April 2012 monetary policy statement the BoC noted that the “considerably higher” international price could “dampen the improvement in economic momentum.” It also said that because “not all oil prices have risen equally” Canada’s real domestic income had been reduced.

Market participants have been late to observe the changed relationship between the Canadian dollar and crude oil prices, valuing the loonie as compared to higher-priced West Texas Intermediate or Brent rather than the Western Canadian Select benchmark to which receipts for domestic producers and the country’s economy are actually tied.

Though the loonie is no longer specifically a petro-currency, it did deserve some premium for its sound federal finances, safe banks and stolid monetary policy. That premium has eroded as the potential impact on the Canadian economy of a US sequester-induced North American downturn has set in and awareness of the impact of these crude-pricing differentials has spread.

Aggressive Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–Feb. 28 (confirmed)
• Artis REIT (TSX: AX-U, OTC: ARESF)–Feb. 28 (confirmed)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–Feb. 28 (confirmed)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–March 7 (estimate)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–March 12 (estimate)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPFF)–February Portfolio Update
• Canadian Apartment Properties REIT (TSX: CAR, OTC: CDPYF)–Feb. 26 (confirmed)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–February Portfolio Update
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–Feb. 26 (confirmed)
• Dundee REIT (TSX: D-U, OTC: DRETF)–Feb. 22 Flash Alert
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–Feb. 28 (confirmed)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–March 14 (confirmed)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–Feb. 15 Flash Alert
• Northern Property REIT (TSX: NPR, OTC: NPRUF)–March 13 (confirmed)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–March 1 (confirmed)
• RioCan REIT (TSX: REI, OTC: RIOCF)–Feb. 15 Flash Alert
• Shaw Communications Inc (TSX: SJR/A. NYSE: SJR)–February Portfolio Update
• Student Transportation Inc (TSX: STB, NSDQ: STB)–Feb. 13 Flash Alert
• TransForce Inc (TSX: TFI, OTC: TFIFF)–March 1 (confirmed)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN OTC: ACAZF)–Feb. 13 Flash Alert
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–March 14 (confirmed)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–February In Focus
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–Feb. 22 Flash Alert
• Colabor Group Inc (TSX: GCL, OTC: COLFF)–March 22 (estimate)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–March 15 (estimate)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–Feb. 27 (confirmed)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–March 26 (estimate)
• Just Energy Group Inc (TSX: JE, NYSE: JE)–February Best Buy
• Newalta Corp (TSX: NAL, OTC: NWLTF)–Feb. 15 Flash Alert
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–Feb. 13 Flash Alert
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–Feb. 26 (confirmed)
• PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF)–March 7 (estimate)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–March 7 (estimate)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–March 4 (confirmed)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–March 6 (estimate)