What do we do if Keystone is cancelled and Enbridge loses its' easement in Michigan?

Fuel has to get to central/eastern Canada. What are the possible options for transport? Do we find (and build) another pipeline route? Do we augment with rail? There are so many facets of the economy and investment decisions that could be impacted by this situation. As a long term dividend investor, the impacts on various sectors could be far reaching. There is no easy answer. Are there any announcements and/or investing options we should consider? It would be similar to losing two major rail lines. We have seen what happens when rail lines are disrupted. What about two major pipelines?
Something interesting to contemplate. I wonder if anyone has ever considered this situation?

Thanks for considering my question,

Dave.

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Asked on January 18, 2021 5:07 pm

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Hi Dave,

I think you answered your own question when you said there is no easy answer. The exists a real issue with the potential of land-locked oil in Western Canada. It can lead to pipeline congestion and increased oil by rail. We saw signs of this before and it is something the industry has been dealing with for a few years.

The impacts include lower WCS prices - which may trade at a larger discount to WTI. Railways benefit as they see an uptick in oil by rail. Overall however, there needs to be a more permanent solution that is not yet in the works. In the meantime, pipes are still generating considerable cash flows and have plenty of projects in the works - perhaps not as transformational as we might like, but enough to support consistent and stable growth.

Mat

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Posted by Mathieu Litalien

Answered on January 18, 2021 6:39 pm

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