One Is the Loneliest Customer - Disappointed by Keystone XL Setback, Canadians Look to Asia
It’s been a tough few years for Canadian oil producers. As they ramped up production in the oil sands, Canadian E&Ps faced pipeline takeaway constraints that drove down the price of Western Canadian Select versus Gulf Coast crudes. The Keystone XL pipeline would have largely solved things, but when that project was killed by Canada’s U.S. friends and neighbors, oil sands producers had to settle for a series of smaller, more incremental projects that provided only a partial fix. The devastating Alberta fires of May 2016 reduced production and pretty much eliminated constraints for much of this year. But volumes have recovered, and if oil sands production is to continue growing, more pipelines and new customers will be needed. Today we consider Canada’s long-running effort to ensure there’s enough capacity to move its crude to market, two major projects that just won the backing of the Canadian government, and what may be next.
