Skip to main content

The Keystone Steele City pumping station, into which the planned Keystone XL pipeline is to connect, is seen in Steele City, Neb., on Nov. 3, 2015.

Nati Harnik/The Associated Press

Canada’s second-largest oil producer, Suncor Energy, believes the political situation in the United States has increased the risks to companies counting on construction of TC Energy Corp.’s proposed Keystone XL oil pipeline, its chief executive said on Wednesday.

A legal fight between TC, previously known as TransCanada, and environmental activists has delayed the Canada-to-Texas pipeline for a decade. A court in Nebraska last month affirmed an alternative route through the state, raising hopes the project might proceed and provide badly needed transport capacity for Alberta’s crude.

U.S. President Donald Trump, a supporter of Keystone XL, faces an election in 2020 and candidates for the Democratic nomination are critics of the fossil fuel industry who favour government support for renewable energy and other steps to fight climate change.

Story continues below advertisement

“Keystone XL is a massive investment and the political situation in the U.S. is I think increasing the risk associated with that,” Suncor CEO Mark Little said at a Barclays investor conference in New York. “That’s one that a lot of people are doing soul-searching about right now because it’s also a very substantial investment. Now we still believe it will go ahead. But time will tell.”

A Suncor spokeswoman could not be immediately reached to clarify Mr. Little’s comments.

“We are committed to Keystone XL and will continue to carefully obtain the regulatory and legal approvals necessary before we consider advancing this commercially secure project to construction,” TC Energy spokesman Matthew John said.

Mr. Little said he believes plans to expand the Canadian government-owned Trans Mountain pipeline are “in pretty good shape,” and added there is still continuing work by Enbridge Inc. to replace its Line 3 in Minnesota.

Congestion on export pipelines prompted the government of Alberta, Canada’s main oil-producing province, to impose crude production curtailments this year to help drain a glut of oil in storage and support prices.

Last month, the Alberta government said it would extend curtailments into 2020 because of delays getting new pipelines built.

Government-mandated production quotas have weighed on investor sentiment toward Canadian energy stocks, but Husky Energy Inc.’s CEO, also speaking at the Barclays investor conference, said curtailments would likely ease.

Story continues below advertisement

“I think quotas will become less of an issue going forward as we see incremental pipeline and rail capacity coming on. I don’t think they’ll bite as hard,” Husky CEO Rob Peabody said.

Canadian crude-by-rail volumes have increased this year as companies look for alternatives to congested pipelines, even though it is a more expensive way of transporting crude.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies