It’s going to take more than a Donald Trump executive order to boost investors’ confidence that TransCanada Corporation’s Keystone XL pipeline will actually be built, Canadian Press reports this week, based on a series of interviews with fossil industry analysts.
“There’s still a number of hurdles,” said Justin Bouchard at Desjardins Capital Markets. “And I think there’s still a contingent of special interest groups which are going to weigh in on the whole project, so it’s certainly not a foregone conclusion that this thing will be built.”
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For Robert Kwan of RBC Capital Markets, CP notes, “news of Friday’s permits was neutral for TransCanada since it was so widely anticipated,” so “he still isn’t including Keystone XL in his valuation of the company.”
The news agency adds that “TransCanada itself doesn’t anticipate oil following through Keystone XL any time soon,” with 2020 the earliest date for the pipeline to go into operation.
Which leads Bouchard at Desjardins to wonder whether Keystone’s time has passed. “Four or five years ago we needed all of those projects. Today it doesn’t seem like we do, just given there’s been massive curtailment in spending,” he said.
On iPolitics, ex-pipeline executive Ross Belot weighed in Monday with an assessment that challenged the pipeline “fantasy” advanced by Donald Trump—and Canadian Prime Minister Justin Trudeau—among others.
“Keystone’s ultimate rejection by the Obama White House never had anything to do with the environment, of course,” Belot wrote. “Obama didn’t actually cancel the line until the discount on Alberta crude disappeared once other pipelines were expanded to eliminate the bottlenecks. Once it was clear the line was not needed anymore, Obama announced the rejection—and polished up his environmental cred in the process.”
Against that economic reality, compounded by the low cost of U.S. shale production, “Trump’s approval of Keystone XL is an empty symbol based on an empty symbol; he’s torn down Obama’s ‘green’ legacy on pipelines, even though that legacy was completely imaginary to begin with.”
But Canadians shouldn’t be too quick to critique the spin south of the border, Belot warns.
“Like the Republicans with Keystone XL, we have an NDP government in Alberta continuing to insist that everything will be fine if we just keep building pipelines. The Canadian Association of Petroleum Producers says the same thing. Even Prime Minister Justin Trudeau says new pipelines are needed support Canada’s energy sector. They’re all lying to themselves.”
