Keystone XL saga enters second decade: Fuel for Thought

Last week marked a decade since TransCanada first applied to build the Keystone XL heavy oil pipeline from Alberta to the Texas Gulf Coast, and the project’s fate is not much clearer today. The failure of Keystone XL and other pipeline proposals to overcome regulatory and court challenges continue to pressure Alberta oil prices, with Western Canada Select trading at more than a $30/b discount to WTI this month. In the 10 years Canadian oil sands producers have waited for Keystone XL and other pipelines to add critical new takeaway capacity, the energy landscape south of the Canada/US border has changed dramatically: surging US light sweet output heading to export markets like Asia, and collapsing Venezuelan production, a chief competitor to Canadian oil sands in supplying US Gulf Coast refineries. Canadian oil sands producers are counting on three remaining proposals for new takeaway capacity: the 830,000 b/d Keystone XL pipeline, the newly government-owned 590,000 b/d Trans Mountain pipeline expansion to British Columbia, and a 370,000 b/d expansion of Enbridge’s Line 3 into the US Midwest. Three contenders “Obstacles for all three projects will persist, including potential regulatory delays, lawsuits and protests,” S&P Global Platts Analytics said in a recent report.… continue reading

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Source: CTRM Center

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