Originally posted 25 January 2017
The day before Robbie Burns Day was an especially propitious day for executives at TransCanada Corporation. Two working days into office and the new U.S. President has “delivered” on the promise to revive the Keystone XL pipeline from Hardisty Alberta to Steele City on the border of Nebraska and Kansas. The decision is subject to terms being negotiated with the proponents, presumably to achieve some return to the U.S. Treasury and to U.S. construction and factory workers. Several commentators have noted this negotiation may be similar to the “shake-down” orchestrated by Premier Christy Clark with the Trudeau government’s approval of the Kinder-Morgan TransMountain pipeline. 
While jubilation appeared to reign in the office towers in Calgary, environmentalists and indigenous leaders promised to carry on the fight to stop the transport of bitumen to the gulf coast.
The expansion, if completed, will add another 1.1 million barrels per day of shipments over and above the roughly one million barrels being exported via Kinder Morgan and Enbridge’s Line 3 to the U.S. mid-west. After the Obama administration rejected TransCanada’s proposal, in January 2016 the company filed a Notice of Intent to initiate a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) seeking $15 billion in costs and damages due to the rejection of the proposed line. The company took a $2.9 billion after-tax non-cash impairment charge in February 2016.
With the political momentum appearing to shift from environmental sympathies to economic development in Washington, Ottawa and Edmonton, pressure will next be applied on Canadian governments to make Canada’s regulation, taxation, and royalty regimes “competitive”. This will now become necessary in order to fill the pipes.
A recent article by Professor Thomas Gunton, Director of Simon Fraser University’s Resource and Environmental Planning Program in The Globe and Mail questioned the wisdom of all the added pipeline capacity. (Is Canada setting itself up for a pipeline glut?) Unless the industry finds a way to fill the pipes, the shippers will pay the pipeline utilities. This may be the next fight but the oilsands producers must convince a New Democratic government and its regulators of the desirability or necessity of further expansion.
(Disclosure: the writer owns shares of Enbridge and TransCanada Coproration)