The recent dramatic plunge in oil prices threatens to make the proposed Keystone XL pipeline something of a white elephant.

The proposed pipeline, which would transport crude oil from these sands to refineries along the U.S. Gulf of Mexico, is a flashpoint in U.S. politics. The Republican-led Congress wants to build it, and the House of Representatives is set to vote on this question. President Obama has pledged a veto.

But if prices stay so low over the coming year, Canada’s vast fossil fuel resource, called tar sands or oil sands, wouldn’t fetch high enough prices to be mined in the first place.

If prices stay in the low $50 range, “the necessity for Keystone XL may disappear,” says Pete Howard, the president emeritus of the Canadian Energy Research Institute in Calgary, Alberta. “We’ve got rail [transportation] right now as a safety valve, and if we build up rail capacity to carry three-quarters of a million barrels, that pretty much takes up all the projects that are under construction right now.”

Last summer, rail capacity handled 240,000 barrels daily, and the Canadian Association of Petroleum Producers projects that rail capacity will grow to 700,000 barrels per day by 2016.

Oil prices today stand around $50 a barrel, a plunge of more than 50 percent since last summer due to a glut of production, including from the United States. Saudi Arabia’s recent decision to not scale back production has also softened demand.

Canada holds the world’s largest known reserves of bitumen, a tar-like form of petroleum, in underground sands in the province of Alberta. Recovering this oil is done in two basic ways: washing the sands with hot water and chemicals, or injecting steam through horizontal shafts underground. Both processes are more costly than traditional oil drilling, and emit more greenhouse gases (see “Canada’s Oil Sands on the Verge of a Boom Again”).

Right now there are at least 20 oil sands projects under construction in Alberta that are due to come online between now and the end of 2017. Regardless of oil prices, they will be finished because much of the capital expenditure is already sunk. However, Howard adds, “by this time next year, if the oil price hasn’t moved back upwards, the next stream of projects will start to be delayed.”

Last year, a London-based think tank, Carbon Tracker Initiative, issued a report carrying even more conservative predictions. It said oil prices would need to be at $95 per barrel or higher for 92 percent of Canada’s tar sands production to make economic sense.

That would leave much of the resource untouched. Even when existing construction projects come online, Alberta will produce around a million barrels per day. Canada is estimated to have the capacity to produce six million barrels, if fully developed.

Temporary dips in oil prices are no big deal because investment decisions involve long time horizons. Conventional tar sands mining projects have 40 or more years of lifetime; steam-assisted projects last 30 years. To make economic sense over the long term, the former requires an average cost of $85 a barrel; the latter, $60 or more a barrel.

President Obama has said he would approve the pipeline only if it did not “significantly exacerbate” climate change. A State Department study concluded Keystone would probably have no such impact because the oil would be mined anyway.