Pipelines: Go, go, no.
It’s done. A three way in one. Prime Minister Justin Trudeau has approved two pipelines and refused one. Not that approval will stop the protests but at least there is more certainty there was.
The Enbridge’s Line 3 pipeline is a go as is Kinder Morgan’s Trans Mountain. On the down side for the energy industry the long running saga of Enbridge’s Northern Gateway pipeline is likely over with the project getting the thumbs down.
Line 3 is a replacement and capacity building pipeline but still reported as Enbridge’s biggest venture to date. When the pipeline is up and running, there will be the potential to ship 760,000 barrels a day into the system that moves three million barrels a day of oil to the U.S. The aging Line 3 pipeline has had issues and really this one was a no brainer to rubber stamp.
Kinder Morgan’s Trans Mountain is still more controversial and will likely still experience strong resistance. Trans Mountain is an expansion of an existing pipeline, which is probably why it got the green light. Kinder Morgan’s $6.8 billion project is set to triple the pipeline’s capacity to 890,000 barrels a day.
Both Line 3 and Trans Mountain should see a welcome jobs boost for companies and workers along and beyond the construction route.
To be honest, I am not all surprised at the content of Trudeau’s announcement. The one that did not get the go ahead, Northern Gateway, had a very controversial route through The Great Bear Rain Forest to Kitimat and had struck legal hurdles when a Federal Court ruled that the Harper government had not adequately consulted First Nations along the route. And, given Trudeau’s reported personal dislike of the Northern Gateway I think there was little chance of it coming to fruition.
When U.S. President Elect Trump takes office next year he may well give the nod for another pipeline. TransCanada’s Keystone XL expansion. The trouble is as I look at the milling mob of journalists around OPEC representatives, whom I believe could not collectively decide on what to have for breakfast let alone on a cut in oil production, I can’t help but think that this has all come too late.
The world has changed and is still changing. The oil price is low and I think set to remain there as supply outstrips demand. I wonder what the prospect of another one million barrels a day of production coming out of Canada, not including Keystone, will do to a very twitchy market. I’m wondering if there won’t be quite a lot of midnight oil being burned by oil executives and investors as they crunch the viability numbers of these projects.
I wonder what the prospect of another one million barrels a day of production coming out of Canada, not including Keystone, will do to a very twitchy market.