The Wall Street Journal reported this week that two major energy companies are planning crude oil pipelines that will move as much as 850,000 barrels of oil from Canada to Gulf of Mexico refineries. The estimated completion date is sometime in the middle of 2014.
What’s more, these two companies — Enterprise Products Partners (NYSE:EPD) and Enbridge (NYSE:ENB) aren’t allies taking on the Keystone XL pipeline together. They are rivals, meaning there are three players in the race to connect the energy industries on the Gulf Coast and in Canada.
TransCanada Corp. (NYSE:TRP) proposed the Keystone XL pipeline, a massive project to move crude from the oil sands of Alberta to U.S. refineries, but the project was held late last year after pressure from environmental groups. Democrats and the president were reluctant to approve the pipeline without proper studies on the impact and risks of the project. However, TransCanada announced it would build a portion of the Keystone XL Pipeline anyway.
Oil in the tarsands of Candada is difficult to extract, but plentiful. That supply to the north could seriously reduce America’s reliance on oil from politically unstable reasons like North Africa and the Middle East. However it’s not as simple as just getting oil — refineries need to process crude into gasoline, and then it needs to be delivered to gas stations for distribution.
Any one of these pipelines would make that process easier. Unfortunately, environmental concerns loom and the long window between now and the completion of the pipelines means no relief is coming anytime soon.
So don’t expect either of these transcontinental pipeline projects to affect gasoline prices anytime soon.