What's Happening Up North? Drop in Rigs and Delay in Keystone XL -- Connecting the Dots

Update

Someone noted that the drop in rigs is a seasonal phenomenon. That appears to be the case. I was wrong below with regard to the impact of the Keystone XL delay. The decrease in Canadian rigs is apparently all due to seasonal issues (muddy roads due to spring thaws that limit movement of heavy equipment). I appreciate the feedback.

Original Post

Last week it was reported that the number of rigs dropped a third -- a third -- in Canada. Today it is being reported that the rig count continues to drop: 94 rigs less this week; now down to 191 in Canada. 94/285 --> 33 percent. So, two weeks in a row, the number of rigs in Canada has dropped a third each week.

To put this in perspective, think what this would do to North Dakota if there was a similar cut. The drop in rigs is across the entire country of Canada, so perhaps the comparison is unfair.

The question is why? What's the reason for the drop? My hunch is that the delay in TransCanada's Keystone XL is part of the reason.

In a separate article, same source (PennEnergy) it is being reported that President Obama is putting continued pressure on the TransCanada Keystone XL.

U.S. President Barack Obama on Wednesday said concerns in the United States about the potentially "destructive" nature of the Canadian oilsands need to be answered before his administration decides whether to approve the construction of Calgary-based TransCanada's controversial Keystone XL pipeline.

Like all of the infrastructure in the United States, the oil pipeline system is aging. A new pipeline such as the Keystone would incorporate newer technology and would take pressure off other aging systems. The delay (or outright cancellation) of the Keystone XL is not about safety. It's geo-political, and there's someone behind the scenes, in addition to the environmentalists, trying to put the kabosh on this project.

I assume there are no tears of sadness over at Enbridge.

My hunch: TransCanada will make a public announcement killing the Keystone XL and then quietly start building new pipeline spurs from Cushing to the Gulf.