WASHINGTON (MarketWatch) — As victorious Republicans gleefully anticipate quick congressional approval of the Keystone XL pipeline after their gains in midterm elections, plunging oil prices threaten to make the project to transport Canada’s oil sands production a white elephant before it can ever be built.

Republicans will command a majority in the new Congress that convenes in January, and the party, which has vociferously supported the new pipeline despite persistent environmental concerns, is already counting on filibuster-proof support in the Senate with some Democrats joining the cause.

“ Oil prices are falling below the price at which the high-cost extraction of this heavy crude oil can be profitable. ”

They may even be able to get to the 67 votes to override a presidential veto if President Barack Obama should choose to oppose it — though he has given little indication that he would do so and may well plan on using Keystone as a bargaining chip to get Republican assent to some of his proposals.

In the meantime, however, oil prices are falling below the price at which the high-cost extraction of this heavy crude oil can be profitable.

A report out this week from the Organization of Petroleum Exporting Countries cut that group’s forecast for global demand and prices over the next five years, pushing U.S. oil prices CLZ24, -0.51% down closer to $75 a barrel and international benchmark Brent Crude UK:LCOZ4 to near $80, a drop of more than $30 from its 52-week high.

Earlier this week, Saudi Arabia, the biggest OPEC producer, cuts its oil prices to U.S. customers, signaling it was ready to let prices decline in order to preserve market share.

But the Canadian Energy Research Institute estimates that oil-sands projects need a price of $85 a barrel to be profitable in the current cheapest (in situ) method and new standalone mines will require $105 a barrel to make a reasonable return.

A short-term price dip will not torpedo long-term projects like the oil-sands production sites or the Keystone pipeline.

The question is just how long this dip in prices will last. Sluggish economies in Europe and many emerging markets are currently lowering demand and creating downward pressure on prices.

Boehner: GOP Majorities Will Move Issues Forward

Ironically, however, it is the higher-than-forecast production of shale oil in the U.S. that is creating a supply glut and pushing down prices — one of the reasons prompting Saudi Arabia to target U.S. customers with its price cuts.

Shale-oil production from hydraulic fracturing, or fracking, faces its own opposition from environmentalists. Local initiatives to ban fracking were split in voting this week, with some succeeding for environmental reasons and others losing for economic reasons.

The tradeoff between environment and jobs has been the conundrum bedeviling the Keystone pipeline as well, though the case for how many U.S. jobs it would create has been greatly exaggerated by the corporate interests — notably Koch Industries — that stand to profit from it.

Nor is the environmental concern simply one of polluted water or endangered species, but the tremendous increase in carbon emissions that would result not only from using oil from the dirty oil sands but from the energy-intensive production process itself.

The pipeline was deemed critical to the growth of the oil-sands industry even at higher oil prices because alternative forms of transport, such as rail, are more expensive.

There are, in short, a lot of moving parts in the supply-demand situation for Canada’s heavy crude oil and exactly where the long-term price point is that will encourage companies to invest. Already Norway’s Statoil US:STO and France’s Total TOT, -4.42% have shelved oil-sands projects this year in the face of these uncertainties.

The current dip in oil prices may not last very long, but forecasts for medium-term economic growth are not optimistic at this point and public pressure both for energy conservation and renewable energies continue to dampen demand for hydrocarbons.

Any efforts to overcome opposition to oil-sands production by mitigating environmental damage would push up costs, and the price needed for a profitable operation, even higher.

“It is unwise to depend on the industry for the country’s economic well-being unless it can be made environmentally sustainable — costly effort in a sector where high costs are already problematic,” Canada’s Globe and Mail cautioned in a long examination of the industry published last week.

That same article points out that other pipelines for the oil-sands oil, particularly those crossing their First Nations (aboriginal) lands, also face opposition.