TransCanada Likely to Benefit from Obama Re-Election
On November 8, Bloomberg reported that President Obama’s second term was likely to be beneficial for Canadian energy companies led by TransCanada Corp (TSE:TRP) and Suncor Energy Inc (TSE:SU), with analysts forecasting that the US President will give the go-ahead to TransCanada’s Keystone XL pipeline.
**TransCanada Hopeful about Keystone**
Bloomberg quotes Robert Johnston, director of global energy and natural resources at the Eurasia Group as saying that even though some people were nervous about President Obama not moving the Keystone project forward, his group still expected the pipeline to “be approved on the basis of it being in the national interest.”
Shawn Howard, a TransCanada spokesman, noted that the company continued to believe that the pipeline would receive approval late in the first quarter of 2013. “As a growing number of Americans realise, acquiring Canadian and American oil through Keystone XL improves US energy security,” Mr Howard noted, as quoted by Bloomberg.
President Obama, however, rejected the Keystone pipeline in January, amid protests about the environmental impact of the pipeline on Nebraska’s Sand Hills region. Reuters reports that the President said he would postpone the decision until 2013 on whether or not to approve the pipeline.
!m[Analysts and Politicians See The US President Approving Controversial Keystone XL Pipeline ](/uploads/story/765/thumbs/pic1_inline.png)As reported by Bloomberg, the US State Department is preparing an additional environmental study on the pipeline, with the review unlikely to be completed before the first quarter of 2013.
**Canadian Politicians Optimistic about Keystone**
In addition to analysts and industry groups, Canadian politicians also seem hopeful about Keystone, given the importance of the US market for Canadian crude. On November 8, Reuters reported that speaking during a visit to India, Canada’s Prime Minister Stephen Harper noted that a majority of US companies and unions favoured the oil sands pipeline. “The president has told me several times that he hasn’t yet made a decision, that he will follow the regulatory process in the United States, and evidently the next steps will be very soon, and I remain optimistic,” Mr Harper pointed out.
Bloomberg in turn quotes Canada’s Natural Resources Minister Joe Oliver as saying that the pipeline will be approved since it is in the US national interests in terms of jobs, economic growth and national security. “I don’t know exactly why he postponed it but the point is right now we’re not in the middle of an election campaign and it will be decided by the administration on its merits,” commented Mr Oliver.
**Canadian Green Energy Companies Seen Benefitting from Re-Election**
And while Canadian gas and oil companies might still be uneasy about President Obama’s re-election, Canadian renewable energy companies probably see the President’s second term as beneficial for their investments in the US. Bloomberg reports that Canadian companies such as Enbridge (TSE:ENB), Brookfield Renewables Partners LP (TSE:BEP.UN) and Algonquin Power & Utilities Corp (TSE:AQN) have all made investments in US assets including solar, wind and hydropower.
“The indications are that Obama will be more friendly on clean technology,” points out Geoff Hill from Deloitte & Touche LLP, as quoted by Bloomberg. “But there’s still a lot of angst in Calgary around Keystone.”
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