The Keystone XL Pipeline, a political football between environmentalists and oil firms that want to move more crude from Canada to the coast of Texas has a rival. According to the Wall Street Journal:
Two major energy companies are planning to build new pipelines that will move as much as 850,000 barrels of crude oil a day from Canada to refineries along the Gulf Coast by mid-2014, in the latest effort to cope with a surge of oil production in North America.
The separate projects, planned by Houston-based Enterprise Products Partners (NYSE: EPD) and Enbridge (NYSE: ENB) of Calgary, will compete with TransCanada’s (NYSE: TRP) proposed Keystone XL pipeline, a massive project to move crude from the oil sands of Alberta to U.S. refineries.
What is not clear is how the new enterprise plans to get over the environmental objections to Keystone. The Obama Administration has blocked the construction of the northern leg of the pipeline, despite persuasive arguments that the project could push down oil prices and add tens of thousands of jobs to the U.S. economy. The answer appears to be that the new, rival pipeline will be made up of sections already approved by federal and state authorities. That may not stop environmentalists from objections that a new flow of oil will endanger regions through which the pipeline carries crude.
The Journal points out that the new pipeline does not negate the need for one that moves crude from some regions in Canada.
Douglas A. McIntyre