Nov 12, 2012 No Comments ›› Pat Dollard
Excerpted from E2 Wire: President Obama will give the proposed Keystone XL oil sands pipeline a green light, Moody’s predicts in a new report.
The fate of TransCanada Corp.’s proposed Alberta-to-Texas pipeline is shaping up as a major post-election battle.
Environmentalists oppose Keystone and will stage a Nov. 18 demonstration at the White House, while a number business groups and unions want the State Department to permit the project.
“We believe the White House will reverse course and approve the Keystone XL pipeline, which would ship crude from Canada’s western oil sands to the Gulf Coast,” the ratings agency said in a wide-ranging report Monday on the implications of the elections.
However, the Moody’s Investors Service report adds: “[A]pproval will not be quick. A prolonged permitting process risks missing the very oil price boom that inspired Keystone XL in the first place. Still, even if Keystone XL went into operation in 2015 or 2016, Gulf Coast refining and marketing companies would benefit from wider light/heavy crude price differentials.”
More broadly, the report says the election will bring risks for the oil industry.
The industry, in the elections, was much more supportive of Republicans, who are seeking to scuttle or nix some environmental restrictions and open up more areas to drilling than the White House allows.
“Energy regulation may tighten in general as well, with the US Environmental Protection Agency (EPA) expanding its regulatory reach. Hydraulic fracturing will likely come under more scrutiny, and federal oversight of deepwater production will remain strict following the tightening of the permitting process for deepwater [exploration and production] after the [BP] Macondo accident in 2010,” Moody’s states.