A decision to move ahead with the expansion on Trans Mountain would eventually provide at least some respite for Western oil producers, who have suffered low oil prices due to a shortage of takeaway capacity out of northern Alberta. Still, analysts expect that increasing oilsands production next year could force a record number of barrels onto rail cars, prolonging financial pain in the oilpatch well before any new pipeline projects come online. The move effectively nationalized the project, casting doubts on industry’s ability to build critical infrastructure projects. In December 2018, a shortage of pipeline space caused Canadian heavy oil prices to drop to their lowest in years, averaging US$43 per barrel less than U.S. prices. The replacement project would ship oil from northern Alberta to Wisconsin, and double current capacity to 760,000 barrels per day.

Source: National Post June 17, 2019 22:44 UTC