Canadian pipelines: I've held and accumulated ENB over the decades. Long, long story how I got involved. From there, EEP. Probably lost more money than I've made -- or could have made had I invested elsewhere, but that's fine. The other day a reader asked me whether I would recommend EEP (or was it ENB? I forget) as an investment. I said I could not recommend ENB/EEP to anyone who wasn't prepared to lose it all. Line 3.
Recommendations: in fact, speaking of recommendations. I can't recommend investments ideas to anyone. Everyone's circumstances are different.
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Canadian pipelines: back to ENB and EEP. Line 3 is a concern. Regardless how that turns out, I think one can say Enbridge = The Canadian Pipeline Company. Let's digress for a moment. The US desperately needs heavy oil. In fact, when folks talk about a supply "problem" going forward and a rise in prices, they are talking about "heavy oil." And because commodity traders can't keep the two separate, the price of "heavy" oil will drive the price of "light" oil.
US sources for heavy oil:
- Canada, Mexico, Venezuela, Russia, the Mideast. Did I miss any?
- Canada: landlocked; can't close a deal
- Mexico: socialist president-elect will drive Mexico's oil industry into the ground (figuratively)
- Venezuela: no light at the end of that tunnel
- Russia: are you kidding?
- the Mideast: okay
Want to see a spectacular map?
Link to Canadian Association of Petroleum Producers. Figure 4.1 from page 19:
Two things jump out at me on the graphic above:
- if Line 3 does not go in, the US consumer is the big loser; Enbridge will do just fine; maybe even better; pipeline rates stay high; again, remember: the US needs "heavy oil" -- with Mexico and Venezuela out of the picture, that pretty much leaves Canada. Mideast heavy oil goes to California and Saudi's refinery o the Gulf coast
- that orange line: Spectra. Now owned by Enbridge; that's why I say Enbridge = the Canadian Pipeline Company (the map is hard to read; I assume I am correct on this; could be wrong)
Spectra Energy Corp, headquartered in Houston, Texas, operated in three key areas of the natural gas industry: transmission and storage, distribution, and gathering and processing. Spectra was formed in late 2006 from the spin-off from Duke Energy. Spectra owned the Texas Eastern Pipeline (TETCo), a major natural gas pipeline which brings gas from the Gulf of Mexico coast in Texas to the New York City area, which was one of the largest pipeline systems in the United States. Spectra also operated three oil pipelines. In February 2017, Spectra Energy merged into the Canadian company Enbridge.Time for a music video:
Pipelines: in the investing world, pipelines are "moats"
- cost prohibitive to build
- crossing jurisdictional boundaries (state, province, international): a nightmare
- made worse by the North American Anti-Pipeline Coalition (NAAPC)
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