Rise in the East
IT’S NOT VERY OFTEN THAT WE CAN talk about a new oil pipeline opening in this country. In fact, some members of Canada’s energy industry weren’t even alive when many of Canada’s main transmission lines were built. But in December, while we didn’t get to talk about a new pipeline per se, we did get to talk about the next best thing. That’s when the second and final phase of Enbridge’s Line 9 reversal project was completed and oil from Western Canada and North Dakota began to flow from terminals in southwestern Ontario to two refineries in Quebec.
Those refineries, one owned by Suncor and one by Valero Energy, could eventually run exclusively on North American oil once the reversed line reaches its full capacity. That new eastward flow is already drawing crude away from the Cushing, Oklahoma hub, as Enbridge’s Spearhead pipeline from Illinois to Cushing is expected to operate below capacity in December and January for the first time in more than two years. That should help alleviate some of the storage shortage at Cushing that’s still weighing on the WTI price, while also giving Western Canadian crude a much-needed shot in the arm. Enbridge’s shareholders, meanwhile, are also seeing some of the shine – perhaps as a result of those positive expectations. In the same week that fellow pipeline company Kinder Morgan gutted its quarterly dividend by more than 75 per cent to 12.5 cents per share, Enbridge raised its own by 14 per cent to 53 cents.