As if having a proposed pipeline rejected by the British Columbian government wasn’t enough, Enbridge Energy Partners, L.P. (NYSE:EEP) now faces a heap of criticism that could send shares falling.
The Canadian pipeline operator is dealing with the mess that was caused by a spill of about 750 barrels of crude oil on June 23 in Alberta, resulting in the company shutting down three of its pipelines.
The spill comes less than a month after Enbridge Energy Partners, L.P. (NYSE:EEP) was officially denied by the B.C. government permission to run a 730-mile pipeline from Alberta to the B.C. coast. Many opposition groups have also opposed the pipeline, as it appears harder for oil giants to expand to increase profits.
As if the spill and pipeline rejection wasn’t enough, the company has throughout its history spilled approximately 133,000 barrels of oil, which is roughly half the 257,000 barrels of the Exxon Valdez spill. That history doesn’t bode well for future projects, and that was evidenced in a damning report from Simon Fraser University, which said a spill on the Northern Gateway Pipeline is likely. That was one of the contributing factors in the B.C. government denying the project and is a sign to shareholders that Enbridge Energy Partners, L.P. (NYSE:EEP) faces increased challenges expanding in the future.
Another proposal from Canada
The TransCanada Corporation (USA) (NYSE:TRP) Keystone XL Pipeline Project, which would carry crude from Alberta to Steele Creek, Nebraska, could also be effected by the Enbridge Energy Partners, L.P. (NYSE:EEP) spill and several others that have sprouted throughout Alberta. Furthermore, a former TransCanada Corporation (USA) (NYSE:TRP) employee turned whistle-blower could damage this stock after calling the practices at the firm “organized crime.” However, the Keystone Project looks to have the approval of Joe Oliver, U.S. federal natural resources minister.
According to the firm’s first-quarter earnings release, the company is on the verge of completing $12 billion worth of investments, including the Keystone XL, Keystone Hardisty Terminal, the Gulf Coast Project, the first phase of the Tamazunchale Pipeline Extension, the Grand Rapids Pipeline, the NGTL System expansion, and the acquisition of nine Ontario Solar projects. For now, it looks like TransCanada Corporation (USA) (NYSE:TRP) has been able to shake the bad press from the spills, but with several projects still not approved, the firm may have challenges seeing the projects to completion.
Early in June, Kinder Morgan Energy Partners LP (NYSE:KMP) reported a small leak in the Trans Mountain pipeline. That pipeline follows a similar route as the proposed Enbridge Energy Partners, L.P. (NYSE:EEP) line.