TransCanada Corp. is slowly but surely digging itself out from under Keystone XL's shadow, adding a slew of new projects that will diversify its future revenues and dim the spotlight beating down on the controversial pipeline.
At the energy stalwart's investor day this week, there wasn't much by way of news, but the company rearticulated its spending plans for the next few years, making it clear that Keystone XL is now just one component of a much larger strategy.
Of the $29.5-billion TransCanada plans to dole out in capital expenditures over the next three years, only $5.4-billion, or 18 per cent, is devoted to Keystone XL.
"While Keystone XL is an appealing project that will help solidify TransCanada's medium-term growth profile and has future expansion opportunities," Canaccord Genuity analyst Juan Plessis noted, "it does not impact the company's longer-term growth profile by nearly as much as it once did just a few years ago."
In 2011, Keystone comprised $7-billion of TransCanada's $12-billion growth portfolio.
For now, TransCanada isn't exactly singing the same tune. Because the pipeline to carry crude from Alberta's oil sands to the Gulf Coast is still caught up in political gridlock in the U.S., executives must continue to stress Keystone XL's benefits to all stakeholders.
"While we view rail as a complementary short-term solution until more pipeline capacity is brought online, more rail terminals will be built to fill the capacity gap if Keystone XL is not approved," Alex Pourbaix, the company's president of energy and oil pipelines, told those who attended the investor day.
"And I think it's a real tragedy if this situation continues indefinitely, as pipelines are obviously much more cost-effective. They are statistically safer and more environmentally friendly to transport oil," he added.
The truth is that TransCanada's future doesn't hinge on Keystone XL any more. And even if the U.S. government blocks development of the entire pipeline, there is hope that at least some of the route will be built.
But keep in mind that the reweighting of Keystone XL's importance is in large part the result of TransCanada's recent plans to spend $12-billion on its Energy East pipeline, which will convert a portion of its underused natural gas mainline to oil service, and also build 1,400 kilometres of new pipeline to Saint John, N.B. Energy East is expected to send as many as 1.1 million barrels of Alberta oil a day to refineries and export terminals in Quebec and New Brunswick.
Energy East's approval isn't a uncertainty. Just last week governments in Ontario and Quebec threw up roadblocks, launching public hearings. If the pipeline suddenly fades from the overall, Keystone XL will become much more important – again.