TransCanada Turns Up the Heat on President Obama

Keystone is grabbing headlines by the day but it’s a decision that is largely out of Canada’s control. The focus needs to shift to options that involve us controlling our own energy destiny.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The United States Congress is no stranger to lobbyists, but targeting the President and his staff directly isn’t exactly the norm for most corporations. Judging by the most recent actions of TransCanada (TSX:TRP,NYSE:TRP), the Keystone XL pipeline decision might just be a make-or-break decision for the company’s future. Even the province of Alberta has boarded the lobbying express with a direct ticket to Washington, DC.

Shift focus

While we all wait to find out if this northern leg of the Keystone XL pipeline will pass the final sniff test, there are a few other pipelines that could help alleviate the current oil glut that is causing Canadian crude to trade at a steep discount.

Mentioning this discount is important because refineries both in North America and abroad would love to get their crackers on it due to its relatively cheap asking price.

When identifying these potential buyers, it’s hard to overlook the 1.3 billion person market that is China. Toss in the 128 million strong Japanese market, and companies like Suncor (TSX:SU) – the world’s largest producer of bitumen – are suddenly licking their chops at the prospects of a market opening up that is nearly five times the size of their current south-of-the-border target market.

So how can they go about feeding these far-flung, yet voracious appetites? Well, pipeline expansions and proposals could be just the solution.

Kinder Morgan Energy Partners (NYSE:KMP) and Enbridge (TSX:ENB, NYSE:ENB) have applied to either expand an existing pipeline – in KMP’s case – or to build a brand new line out to the West coast.

Because this is a decision that rests solely with Canadian officials as no borders are being crossed, I believe that this is the area most of Canada should be focusing on. These pipelines would provide access to the Asian market via exports and the U.S. market by way of ships sending crude to refineries along the coast.

In the meantime, oil sands producers must remain on the edge of their oil derricks since a significant portion of their fates rest on these decisions. Takeaway capacity is badly needed in these producing regions, and without it, the disparity between the price of oil that can be charged and the overall benchmarks will undoubtedly remain wide.

While oil and natural gas steal many of the energy related headlines we see, uranium has the potential to be the fuel that powers the 21st century.  Click here now for instant access to our FREE report titled “Fuel Your Portfolio With This Energetic Commodity”.  We think you’ll be surprised just how bright the future is for uranium, just how far these two Canadian names have fallen, AND how fast they could rebound.  Click here to access this free report, and hop on for the nuclear ride of your life!

Follow us on Twitter and Facebook for the latest in Foolish investing.

This post was authored by Fool.com contributor Taylor Muckerman. 

Fool contributor Taylor Muckerman has no position in any stocks mentioned at this time.  The Motley Fool has no position in any stocks mentioned at this time.      

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Profit dial turned up to maximum
Tech Stocks

$1,000 Invested in Constellation Software Stock Would Be Worth This Much Today

Constellation Software (TSX:CSU) is trading above $2,000 today. Why this stock is so expensive, and is it worth buying?

Read more »

Dividend Stocks

Passive Income: 3 Top Canadian Stocks to Buy for Monthly Dividends

Companies such as Pembina Pipeline and Killam Apartment REIT pay investors monthly dividends, making them top bets for income-seeking investors.

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Stocks for Beginners

TFSA Investors: Top TSX Stocks to Buy With $6,000

Here are two safe, dividend-paying TSX stocks for your long-term portfolio.

Read more »

Gold medal
Investing

3 Growth Stocks That Could Be Huge Winners in the Next Decade and Beyond

Are you looking for growth stocks that could be huge winners in the next decade? Here are three top picks!

Read more »

Retirees sip their morning coffee outside.
Investing

Retirees: How to Make Over $95/Week in Passive Income TAX FREE!

Canadian retirees who are hungry for passive income should look to snag stocks like Sienna Senior Living Inc. (TSX:SIA) in…

Read more »

Man holding magnifying glass over a document
Investing

Where to Invest $500 in the TSX Right Now

Given the massive correction, long-term investors can start buying stocks like Shopify and goeasy to outpace the broader markets by…

Read more »

Aircraft wing plane
Investing

Air Canada Stock Is a Fantastic Deal Right Now

Air Canada (TSX:AC) is a great stock to own, as market fear turns into hope amid falling recession fears.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Investing

Beginner Investors: Get Passive Income by Investing in REITs!

You can get passive income by investing in REITs like Northwest Healthcare Properties REIT (TSX:NWH.UN).

Read more »