Despite Senate Win, Keystone Pipeline Still Clogged By Politics

After weeks of debate over climate change and renewable energy issues, the U.S. Senate approved legislation that will allow TransCanada Corporation TRP to move forward with its Keystone XL oil pipeline. The project will permit the company to move roughly 800,000 barrels of Canadian crude through Nebraska to Gulf Coast refineries.

However, although the legislation has made it through both the House of Representatives and the Senate, it still faces the approval of President Obama, who previously threatened to veto.

Veto Could Be On Its Way

The bill is expected to hit Obama’s desk within the next few days, where the president will have to determine whether or not he will use his executive power to veto. If the president does veto the bill, a two-thirds vote in the House and the Senate can reverse the decision.

Related Link: The Most Volatile Oil Stocks Are Involved In Shale

Who Does Keystone Benefit?

With the bill on its way to the Oval Office, investors are already beginning to place their bets on the direction the pipeline will take. TransCanada stands to benefit from the project’s approval, but exploration companies like Canadian Natural Resources Ltd CNQ and refiners like Valero Energy Corporation VLO will likely gain, as well. Construction companies like Deere & Company DE and Quanta Services Inc PWR are also expected to see a benefit from an uninterrupted stream of crude into the U.S. economy.

Who’s Hoping For A Veto?

A veto will directly benefit Enbridge Inc ENB, which has already gained approval to build an alternative pipeline that will move crude from Alberta to British Columbia in 2016.

Shipping companies are also hoping for a veto; railroad businesses like Canadian Pacific Railway Limited CP and Union Pacific Corporation UNP generate a significant amount of revenue moving the same oil that would be rerouted, so the pipeline’s construction would have a detrimental effect on their earnings. Small shipping companies that primarily operate on the coast of North America and within the States would also cheer a veto; Kirby Corporation KEX is one such firm that may lose a substantial amount of its business if the pipeline is built.

Posted In: CommoditiesPoliticsTop StoriesMarketsTrading IdeasGeneralKeystone PipelineKeystone XLPresident Obama
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