Now That TC Energy Has Abandoned The Keystone XL, Some Observations -- June 10, 2021

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See this post, also. 

Also, activists are targeting Big Oil; why that could backfire. 

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Headlines:

• TC Energy cancels critical Keystone XL pipeline (it couldn't have been too critical; we've lived without it for two decades)
• Canada's oil industry optimistic as prices rebound

Now that TC Energy has abandoned the Keystone XL, some observations.

• the Keystone XL, two arenas: the political arena, and the non-political arena
• with regard to the political arena, the faux environmentalists won
• the Keystone XL was the pipeline story that spawned all the rest, including the Enbridge pipelines, lines 3 and 5; the DAPL; the natural gas pipelines in the northeast; etc. The Keystone XL "win" was huge; hard to say whether it will affect outcome of existing pipeline fights;

The rest of the observations will address the non-political arena:

• headline above: "TC Energy cancels critical Keystone XL pipeline": it couldn't have been too critical; it was on the drawing board in the early 2000s', probably as early as 2005 with the US shale revolution; "we've" lived without it for almost two decades; the pipeline couldn't have been too critical;
• there is no evidence that Gulf Coast refiners will re-configure/optimize their operations for light oil as long as heavy oil is available;
• most surprising: Canadian oil sands operators have survived some of the most brutal economic impacts over the past few years;
• many thought that oil from the Canadian oil sands was landlocked; absolutely not true
  
• headline today: western Canadian operators optimistic about the future -- this is the day after the Keystone XL project was finally abandoned; the western Canadian operators knew this was coming years ago;
• but the US is still going to need lots of heavy oil
  
• group-think: 
• the big loser: Canada
  
• the big winners: Saudi Arabia, Russia, Latin America
• to some extent that's true, but it's all relative
• in reality, with regard to this very small piece of the oil pie:
• the big loser: US consumers (price of oil / price of gasoline goes up slightly)
• safety and efficiency: CBR is so much less efficient and so much more dangerous than pipelines; and all those traffic crossings in Kansas and Nebraska -- they've just gotten a whole lot worse; 
  
• the big winner: investors; CBR; every other pipeline operator; the Permian;
  
• a number of readers are very, very aware of this and have written me to tell me how they are "playing" this story
• the big winner: investors. If you don't agree, ask yourself two questions:
  
• as an investor, ask yourself, where would you be investing had the Keystone XL been in operation today?
• as an investor, ask yourself, where should I be investing now that the Keystone XL project has been abandoned, once and for all?
• the answers to those two questions are fascinating
  
• the Keystone XL -- other than transiting the Bakken -- had absolutely nothing to do with the Bakken; the Keystone XL was going to transport heavy oil, not light oil
• add up the "negatives" and the "positives" and the demise of the Keystone XL was a net win for Bakken operators;

Bottom line:

• in the political arena, all sentient Americans should be upset that the Keystone XL was killed;
• in the investment arena, where I now live, we should all be happy that the Keystone XL was killed -- perhaps not happy, perhaps "neutral" at best, but taking advantage of this new reality, in our investment decisions.
  

I have flip-flopped on this. for the past ten years (?) I was in the political arena when it came to the Keystone XL; for over ten years I have been steadily moving from the political arena to the investing arena; I still have a long way to go, but I'm getting there.