Two high-profile pipeline setbacks are part of a broader story in which the winds facing the oil and gas industry are blowing in an increasingly unfavorable direction.
Already struggling with a lack of pipeline capacity, Canada’s oil industry hit yet another setback with the recent announcement from Enbridge of delays to its Line 3 replacement project.
Intractable infrastructure problems caused Canada to miss out on the high prices that characterized much of 2018. A majority of Canadians now believe the lack of pipeline capacity has become a crisis as current supply lines are tapped out, storage facilities are at capacity and Alberta has instituted a production cut.
However, it isn’t clear that newfound interest in a variety of shale plays outside of West Texas will prove durable.
The future for pipeline companies could be mixed. A friendlier environment from the federal government is a boon, but a potential minefield of local opposition will also block construction.
Rather than focus on midstream infrastructure, environmentalists should focus their energy on reducing oil demand if they want to reduce consumption.
The attack was designed to spark action against climate change, but the only real outcome from the sabotage was creating risk of a massive oil spill.
Although the carbon tax proposed by Canadian Prime Minister Justin Trudeau will likely cause more stress for the country's oil industry, it may lead to approval for much-need oil pipelines.
Flagging investment, price and infrastructure challenges, and the coming election are contributing to a grim outlook for Canada's oil industry.
On October 1, DOT will implement stricter safety standards for crude by rail, but two suburban Chicago communities have challenged the rules, citing glaring loopholes in the soon-to-be-implemented regulation.