Not surprisingly, U.S. President Barack Obama rejected TransCanada's proposed Keystone XL pipeline today citing that the pipeline would not make a meaningful long term contribution to the U.S. economy. The 1,900 kilometer pipeline would have carried 800,000 barrels a day of oil from the Alberta Oilsands to refineries on the U.S. Gulf Coast (almost a quarter of all of Canada's oil exports). Given the review process for the pipeline has taken over seven years and knowing the Obama administrations hard stance on climate change, its not a surprise this administration rejected the pipeline. That said, TransCanada does plan to challenge this decision in court. Further, the project will likely get a fresh look in 2017 if a republican wins the White House and invites TransCanada to reapply. Although Keystone is dead for now, Obama's rejection won't likely be the last word on the project. In terms of a read-through for Canadian energy companies, this decision is clearly negative for Oilsands producers including companies such as Syncrude, Suncor, Shell, Canadian Oil Sands, Canadian Natural Resources, etc. This decision is also negative for services companies who derive a large portion of their revenue from the Oilsands, mainly the camps companies Horizon North and Black Diamond.
A Canadian Energy expert