Oilpatch fears delays as U.S. judge orders more study of pipeline route
Potential delays in the completion of the Keystone XL pipeline following a U.S. judge’s order mean that Western Canadian oil producers could suffer current price discounts for a longer period of time, an industry spokesman says.
On Wednesday, U.S. District Court Judge Brian Morris ordered additional environmental study of the altered route through Nebraska for TransCanada Corp.’s proposed pipeline.
The potential setback illustrates how difficult it has become to relieve market access woes that have resulted in larger-than-usual price discounts for Western Canadian crude, said Chris Bloomer, CEO of the Canadian Energy Pipeline Association.
“We need the pipeline, we need it yesterday and we need more market access across the board,” he said in an interview.
“We’re not getting a fair price for our crude in the U.S. because of a lack of capacity. That’s just fundamentally an issue.”
The difference between Western Canadian Select and New York benchmark West Texas Intermediate crude was about US$25 per barrel on Wednesday, down from peaks over US$30 earlier this year but higher than historic averages in the mid-teens.
Crude-by-rail exports from Canada reached an all-time record high of 199,000 barrels per day in May, up from about 131,000 bpd in May 2017, despite higher costs and a poorer safety record than pipeline shipments, Bloomer pointed out.