Enbridge Inc (USA) (ENB), TransCanada Corporation (USA) (TRP): Can North America Become Energy Independent?

TransCanada Corporation (USA) (NYSE:TRP) is also facing stiff political resistance to its proposed Keystone XL proposal. If approved, the pipeline would ship 830,000 b/d of Alberta crude to refineries on the Gulf coast. While the project has received approval from the State of Nebraska, it’s still awaiting a final decision from the U.S. State Department.

Opposition to desperately needed infrastructure could trap North American crude in the ground. And even if these pipelines are constructed, there may not be enough refining capacity further downstream.

Second, it’s extreme to assume the energy industry won’t be hit by another disaster. We don’t know how any of the national governments will react if we are struck by another Exxon Valdez or Deep Water Horizon. Any similar event would delay or suspend independence.

Third, I can’t help but feel these economists are simply extrapolating current trends into the future. This is a dangerous forecasting methodology and can lead to predictions that diverge laughably from the actual outcome.

Six years ago the conversation was centered on peak oil. High fuel prices were going to put an end to the suburbs. I thought my world was going to get a whole lot smaller. No one outside of the oil industry had heard of ‘fracking’ or ‘horizontal drilling.’ Just like then, it’s likely that some unknown factor will completely throw off all of today’s models.

Foolish bottom line

Even if the continent were to achieve self-sufficiency by 2020, it would do little to lower energy prices for consumers or insulate the market from Middle Eastern geopolitics. At the time of this writing, the price of regular gasoline at my nearby Ultramar station in Ottawa, Canada – an energy independent nation – is $4.60 US per gallon.

The article Can North America Become Energy Independent? originally appeared on Fool.com and is written by Robert Baillieul.

Robert Baillieul has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.