Oil pipeline operator TransCanada Corp. (NYSE: TRP) announced this morning that it will cease development efforts on two proposed pipeline projects that would have transported crude oil from the oil sands of western Alberta to Canada’s east coast. The company cited “changed circumstances” as the reason for cancelling the Energy East and Eastern Mainline projects.

The company estimates that it will take an impairment charge of about $1 billion in the fourth quarter as a result of the cancellation.

The circumstances that CEO Russ Girling referred to are of two kinds. First, regulatory delays have pushed out the date of construction and ultimate completion of the pipelines. In early September TransCanada asked the Canadian government to suspend consideration of its applications for these projects while it reviewed additional requirements.

Second, in the current crude oil pricing environment, western Alberta oil is barely competitive and that is true only for existing production sites. When existing operations run dry, the cost of building a new mine or in situ operation would be almost certain to exceed the price of crude and, therefore, uneconomic. IHS Markit in 2016 estimated a new mine would require a West Texas Intermediate price of $85 to $95 a barrel while an in situ operation could break even at $55 to $65 a barrel.

The recent approval by the White House for the Keystone XL pipeline to move western Alberta crude to the Gulf Coast also played a role in TransCanada’s decision. That project, too, still awaits final U.S. regulatory approval as well as several lawsuits. TransCanada has begun another open season — industry-speak for finding customers willing to sign up for a long-term contract to ship crude on the pipeline — on the Keystone XL and has not yet announced how successful it’s been in signing up more customers.

TransCanada appears to have put all its new transportation eggs in the Keystone XL basket. Investors have not reacted much to today’s announcement, and the stock was last seen trading flat at $48.83, in a 52-week range of $42.69 to $51.85.

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