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When the pipeline company Kinder Morgan announced it was suspending work on a major Canadian project that has been delayed by protests and court challenges, it sparked talk of a crisis north of the border and fears that investors may flee the nation’s tar sands industry.

It was the clearest sign yet of how difficult it’s become for energy companies to find new routes to export the country’s landlocked oil, among the most expensive and damaging to the climate to produce. Over the past several years, climate activists and indigenous groups—in particular many of Canada’s First Nations governments—have built a sustained campaign that has succeeded in delaying, and in some cases canceling, almost every attempt to send more Canadian oil to foreign markets.

Canada’s tar sands hold one of the world’s largest deposits of oil, but as the industry has expanded production over the past decade, it’s been unable to complete new pipelines fast enough to ship it out.

The past few years saw the failure of two major pipeline projects that would have carried tar sands oil to the Atlantic and Pacific coasts of Canada, as well as the delay, demise and then revival of Keystone XL. This week’s news on Kinder Morgan’s Trans Mountain expansion, which is supposed to triple the capacity of an existing pipeline from Alberta to British Columbia’s Pacific Coast, was the latest setback.

“With infrastructure projects like this, they don’t need to be turned down or stopped by people, they just need to be delayed to the degree that it makes sense to place capital elsewhere,” said Kevin Birn, an energy analyst with IHS Markit, a research firm.

RBN Energy issued a report saying producers in the tar sands—also called oil sands—are being forced to export more of their oil by rail, driving up costs. It warned that no new pipeline capacity is slated to come online for at least a couple of years, and that each of the three projects that have been approved—including Trans Mountain—face substantial opposition and hurdles.

Canada’s First Nations Push Back

The Trans Mountain expansion was first proposed six years ago to add 590,000 barrels per day in capacity to the existing Trans Mountain line, which can already carry up to 300,000 barrels. Opposition began soon after, and in 2015, the Tsleil-Waututh Nation sued the National Energy Board, which oversees pipeline construction, arguing that the review underway was flawed.

A series of court cases over the past two decades have given British Columbia’s First Nations significant control over what happens within their borders, meaning the federal government must consult with them before approving major infrastructure projects though their land.

While the 2015 lawsuit was rejected by a court, the opposition grew, and several other First Nations along the route eventually filed a new lawsuit, arguing that the government hadn’t adequately consulted with them before approving the line in 2016. The cities of Vancouver and Burnaby, where the pipeline ends, also filed suit, as have some environmental groups.

Similar opposition sank another proposed pipeline from Alberta to the Pacific in 2016, Enbridge’s Northern Gateway. That year, a Canadian court revoked permits the federal government had granted for the project, ruling that the government had failed to adequately consult with First Nations groups who would be affected.

Prime Minister Justin Trudeau announced the rejection of the pipeline on the same day he approved the Trans Mountain expansion.

The two projects became part of a grand deal between the federal government and Alberta over the nation’s climate policies. Trudeau was trying to assemble a national framework to meet the Canada’s goals for the Paris climate agreement—the country has pledged to cut emissions 30 percent below 2005 levels by 2030—and he needed support from Alberta to enact a carbon tax and a cap on oil sands emissions.

“In that kind of deal with the devil, there was Alberta saying, ‘we’ll do all this, and you have to get us a pipeline’,” said Karen Mahon, Canadian director of Stand.earth, an advocacy group. “The missing calculus in all of that was really the indigenous opposition.”

Trudeau, Alberta Vow Pipeline Will Get Built

Last weekend, Kinder Morgan said it had had enough and would abandon the Trans Mountain expansion unless the Canadian government could assure it of “clarity on the path forward” by the end of May.

The move prompted a frenzied response from leaders in Alberta and the federal government, who see the project as critical to the nation’s economic growth because it provides the only route directly to customers beyond the United States.

The head of the Canadian Energy Pipeline Association said the nation was facing “a crisis.” Trudeau reiterated the government’s support, telling reporters that “this is a pipeline in the national interest, and it will get built.” Alberta Premier Rachel Notley said her government is considering buying the multi-billion dollar project outright to ensure its completion, and officials in Ottawa have floated the possibility of federal investment as well.

It’s unclear, however, how they could overcome the significant opposition from First Nations, activists and the government of British Columbia, which has joined the First Nations’ lawsuit and proposed a rule to limit the flow of tar sands oil through the province. Even some members of Parliament have been arrested protesting the pipeline.

On a conference call Monday, Kinder Morgan’s chief executive, Steven J. Kean, said that if the pending court challenge forces the company to revisit elements of the permitting process, “I think that’s just too much to bear.”

What Does the Future Spell for Tar Sands?

If the Canadian government and Kinder Morgan can’t reach a deal, it would strike yet another blow to the tar sands.

In 2014, when oil prices peaked above $100 per barrel, the Canadian Association of Petroleum Producers said output would more than double to 4.8 million barrels per day by 2030. Last year, after prices had fallen below $50 per barrel, the industry group had shaved that projection down to 3.7 million barrels per day. Nearly all of the major multinational oil giants—save ExxonMobil—have sold much or all of their oil sands holdings.

At the same time, the global climate movement has put increasing pressure on national governments and corporations to begin cutting their emissions and moving away from fossil fuels. Canada’s goals are likely unattainable if tar sands growth continues as projected.

Jennifer Winter, an economist at the University of Calgary’s School of Public Policy, said that while the activism and protests against pipelines may have heightened uncertainty for investors, market forces have had a bigger impact.

But as the report by RBN Energy and another by Deloitte show, the two factors are becoming intertwined. Canadian oil trades at a lower price than most American crude, adding to costs for oil sands producers, and that discount has surged in recent months, driven in part by tight pipeline capacity.

The cancellation of Trans Mountain would likely continue that trend. And while the project isn’t dead yet, Winter said there aren’t many options to revive it.

“The longer there is delay, the more momentum is built against the pipeline,” she said. “A summer construction season is pretty crucial, and if it looks like construction this summer isn’t feasible, that could be the signal for Kinder Morgan to say ‘no thanks, Canada isn’t a good place to invest any more.’”