TransCanada Corporation (USA) (TRP), Enbridge Inc (USA) (ENB): Keystone XL Delayed Again; But Does It Even Matter?

But there could be another advantage for upstream players as well. With pipe and rail competing to move product, a shrewd negotiator like Harold Hamm could play these shippers against one another, reducing the company’s transit costs over the long term. Indeed, his comments to the National Journal may be part of a public effort to pressure Continental’s midstream partners.

Already taking its toll
New shipping capacity has already decimated the earnings of Midwest refineries. Last month, Marathon Petroleum Corp (NYSE:MPC), the largest refiner in the region, saw its second-quarter earnings fall 27% year-over-year. For two years, Marathon took advantage of bottlenecks in the energy supply chain, which allowed it to buy Bakken crude at rates well below international blends. But as those tailwinds dissipate, Marathon and its peers will have to eat higher input costs.

Foolish bottom line
Harold Hamm might be right. With new pipeline and rail capacity coming online, the Keystone XL pipeline is no longer critical to the future of the Bakken or the oil sands. This is bad news for TransCanada Corporation (USA) (NYSE:TRP) shareholders as it reduces the pressure on the U.S. State Department to approve the project.

The article Keystone XL Delayed Again; But Does It Even Matter? originally appeared on 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. 

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