TransCanada Corporation (USA) (TRP) Looks East

Once again, a growing grass roots is pressuring to block the proposal. To make matters worse, a small oil spill on the same route last week has severely damaged Kinder Morgan’s credibly.

Enbridge Inc (USA) (NYSE:ENB) has also struggled to access the pacific coast.

In 2006, the company’s proposed its controversial Northern Gateway pipeline that would ship Alberta crude to the Kitimat, B.C. But this has faced heavy resistance as well. In May, the provincial B.C. government rejected the proposal over the risks of shipping crude thorough rugged remote wilderness. The fate of the Northern Gateway pipeline now rests in the hands of the Federal government.

In response to these challenges, Enbridge Inc (USA) (NYSE:ENB) is now looking east as well. To take advantage of cheaper Alberta crude oil prices, the company has proposed reversing the flow on its Line 9 pipeline so that oil would move from southern Ontario to Montreal. Enbridge also wants to increase the pipeline’s capacity from 240,000 b/d to 300,000 b/d.

Of all the options available, the Energy East Pipeline is the most expensive and a last resort.

Foolish bottom line

TransCanada Corporation (USA) (NYSE:TRP) investors worried about the fate of the Keystone XL project fear not–the company has a Plan B. If approved, the Energy East Project would represent a major hidden catalyst for TransCanada’s earnings, dividends, and share price.

But the project has relevance for upstream oil companies as well. The east coast may be the last possible destination for oil sands product. If this option is rejected, Canadian crude could become permanently landlocked.

Robert Baillieul has no position in any stocks mentioned. The Motley Fool recommends Kinder Morgan Inc (NYSE:KMI). The Motley Fool owns shares of Kinder Morgan. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article TransCanada Looks East originally appeared on and is written by Robert Baillieul.

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