A Chronology of Canada's Energy Export Plans
Analysis
Editor's Note: In light of the defeat of the Keystone XL bill in congress Nov. 18, 59 - 41 votes in favor, we have assembled a chronology of Stratfor's recent analyses on the matter of Canada's fast-evolving energy transportation plans with the rest of North America.
The defeat of TransCanada's Keystone XL project in the U.S. Senate on Nov. 18 is unlikely to be the final word on the controversial pipeline. Lack of Senate endorsement is anticipated to be only a temporary delay to the Keystone XL approval bill working its way through Congress. The proposed bill will be one of the first things on the agenda in 2015. The Republican win in November's general elections appears to have given the bill a filibuster-proof number of supporters, meaning it will likely appear on the president's desk next year.
It is important to remember, however, that Keystone XL is far from the only option available to Canada. Ottawa currently has three outstanding proposals with potential backing. The Pacific Ocean-based TransMountain Expansion and the Northern Gateway pipelines face significant hurdles in British Colombia, but going east, Canada also has the potential Energy East pipeline, which faces less domestic opposition yet is large scale and expensive.
Even in the United States, Keystone XL is only one of many options. Enbridge's Alberta Clipper pipeline from Alberta to Superior, Wisconsin, is being expanded to 570,000 barrels per day with a further application in process to increase its capacity to 800,000 bpd. Unfortunately for Enbridge, like Keystone XL, the second expansion has been frozen at the State Department level. In another effort to get oil downstream to Texas, Enbridge has built pipelines running to Cushing, Oklahoma — the most recent conduit to come online being the Flanagan South pipeline from Pontiac, Illinois, to Cushing, Oklahoma.
For Canada, pipelines are important, but right now, even with low oil prices, many Canadian producers are getting higher returns than they did earlier. Other pipeline alternatives and increased rail capacity has reduced the differential between Canadian oil prices and global oil prices, meaning, in some respects, that the Canadian price hasn't really dropped despite lower global prices. At the same time, however, the Canadian dollar has weakened against the U.S. dollar, meaning that the incentives for Ottawa to improve energy flows to the United States remain heightened. Pipeline and energy sector concerns will be the heart of Canada's next national elections in October 2015.
Read the rest of the article online on Stratfor here: A Chronology of Canada's Energy Export Plans | Stratfor
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