Republican Donald Trump’s victory in the U.S. presidential election cheered investors in Canadian energy producers eager to revive the stalled drive to approve the controversial Keystone XL pipeline, giving oil sands crude better access to U.S. markets. President Barack Obama denied a permit to TransCanada Corp’s proposed cross-border Keystone XL pipeline last year. In May, Trump said that if elected, he would “100 percent” approve Keystone XL, which would carry 830,000 barrels per day from Alberta to Nebraska, but would seek a better deal.
TransCanada shares rose 2.2 percent to C$59.49 on the Toronto Stock Exchange on Wednesday while the Canadian energy index climbed 2 percent led by Suncor Energy which gained 2.5 percent.
“I suspect there are a few people in the offices over at TransCanada who are dusting off some files,” said Dirk Lever, an analyst with AltaCorp Capital in Calgary.
Obama’s decision last year to deny the permit was a victory for environmentalists who campaigned against the project. U.S. Secretary of State John Kerry said the pipeline “would significantly undermine” efforts to fight climate change.
In a statement on Wednesday, TransCanada said it remained fully committed to building Keystone XL.
“We are evaluating ways to engage the new administration on the benefits, the jobs and the tax revenues this project brings to the table,” spokesman Mark Cooper said.
Analysts in Canada’s energy capital Calgary said it was unclear how quickly the pipeline could go ahead if approved, or at what point in the regulatory process TransCanada’s application could pick up again.
A greenlight on Keystone could have implications for Canadian Prime Minister Justin Trudeau’s decision next month on Kinder Morgan’s Trans Mountain proposal to expand its pipeline from Alberta to the Pacific Coast.
Canada holds the world’s third largest crude supplies and is the No. 1 exporter of crude to the United States but has struggled to build new oil export pipelines, raising the risk that crude will get bottlenecked north of the border as Alberta oil sands production grows.
Alberta has been particularly hard hit as global oil prices tumbled more than 50 percent since mid-2014.
Better market access for Canadian crude would narrow the discount at which it trades to U.S. barrels and boost profits and activity in the struggling Canadian oil patch.
Trump’s support for Keystone XL may also reassure producers debating whether to invest in new projects. Statoil ASA and Royal Dutch Shell have deferred or cancelled planned oil sands facilities because of lack of export pipelines.
Pipeline company Enbridge Inc, which is seeking approval from the Minnesota Public Utilities Commission to replace its Line 3 pipeline from Alberta to Wisconsin, said it was looking forward to working with the new administration.
ARC Financial analyst Jackie Forrest said Trump’s focus on energy security and affordability rather than climate change could help Canadian barrels dislodge other foreign imports in the U.S. market, but his threats to rip up the North America Free Trade Agreement may hurt Canadian oil exports.