Canadian Oil Pipelines At Capacity Poses Difficulties for Producers: Energy Biz Update

Even though current plans call for new oil pipelines to be built like mad, the problem remains: Canada’s oil pipelines are full and could soon begin to dramatically stall oil growth. The number one cause, which ordinarily would be good news, is the surging output from Alberta’s oil sands and also from tight oil fields across North America. During the next days and weeks, producers will reveal their investment plans for next year, starting with Canadian Oil Sands (COSWB.OB) on Thursday. In December, the pipeline manager firm Enbridge (NYSE:ENB) will apportion space on several of its key pipelines, while Kinder Morgan (NYSE:KMI) is allotting space so that a mere 30 percent of the producers’ hoped-for volume gets into the usually crowded TransMountain pipeline. Meanwhile, analyst Andrew Potter at CIBC thinks that  Canadian Natural Resources (NYSE:CNQ) might demur before launching its Horizon oil sands project expansion, while plans of others are ongoing, such as Imperial Oil’s (NYSE:MO) Kearl oil sands mine, and can not be shut down at this point without loses huge amounts of investment.

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