The long-debated Keystone XL pipeline project will be debated a while longer. The U.S. State Department postponed its decision on extending the Keystone pipeline to the Gulf Coast until 2013, effectively putting off expected gains for TransCanada
Who might get hurt?
Keystone XL was more than just a longer pipe; it was also a bigger one, with capacity expected to increase to 1.1 million barrels per day. Oil sands production has already surpassed that figure and is reaching for 3 million barrels of daily production by 2018, so major oil sands producers could certainly use the capacity.
Syncrude's partnership also includes Murphy Oil, Imperial Oil, Sinopec, Mocal Energy, and Nexen Oil. Canadian Natural Resources
Stepping up to the plate
All is not lost, despite the delay. Enbridge
Since the construction time for the Keystone XL pipeline could be about two years, Enbridge's Wrangler pipeline needs to get going soon. Wrangler could be completed by mid-2013, and it might even reduce oil prices slightly -- though this could easily be offset by any number of political or economic problems that could crop up in the interim.
The Foolish bottom line
However, with oil sands production expected to hit 3 million barrels per day in a few years, will Wrangler be enough? An analyst at FirstEnergy Capital believes that Keystone XL is still necessary, and it's hard to disagree -- the two pipelines' combined capacities would be a million barrels less than 2018 targets. That oil has to go somewhere, and wouldn't our economy be better served if it flowed into America's refineries? TransCanada and most oil sands producers certainly believe so, so it will fall to the State Department and President Obama to determine the final strength of our Canadian pipeline connections.
To stay on top of pipeline progress, or to monitor any other development in these companies' financial futures, add them to your Watchlist now. If you're looking for an oil stock with less Canadian exposure, take a look at The Motley Fool's free report on one well-positioned company that's set to capitalize on the rising cost of oil.
Fool contributor Alex Planes holds no stake in any company mentioned here. Add him on Google+ or follow him on Twitter for more insights and random information. Motley Fool newsletter services have recommended buying shares of TransCanada and Enterprise Products Partners. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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