Pipelines are among a select group of Canadian stocks that are deemed good enough not only for amoral types, but also for investors who like to believe that their investment dollars are being put to good use.
Pipeline companies and oil producers have been fretting about running out of pipeline space for years now. The pipes are almost plugged, and while there are plans in the works to alleviate the problem – Keystone XL, Northern Gateway pipeline, Line 9 reversal, among other ideas – the spare room won't last long. Canada could be facing another pipeline shortage in just a few years.
"If supply forecasts in both Canada and the U.S. become accurate, if projects as planned get built, we would see another shortage of capacity by the middle of the next decade," Ian Anderson, head of Kinder Morgan Inc.'s Canadian operations, told reporters at a conference Tuesday.
Vern Yu, Enbridge Inc.'s vice-president of business development, agrees. If Canada's oil sands production grows by 1.5 million barrels per day between 2020 and 2030, the industry will need "significantly more infrastructure", he says.
In order to make this happen, the regulatory process must become more timely, he said.
While the folks who build pipelines believe North America needs more pipelines, at least one of their customers disagrees.
"The history of the industry says we actually tend to overbuild," Steve Douglas, Suncor Energy Inc.'s vice-president of investor relations, said. "Making these calls five, 10, 15 years ahead of time is difficult. There are a lot of things that aren't knowable."
Western Canada's oil, he said, won't be shut in given its contribution to the domestic economy. "There will be access to market."