Report: Oil glut makes refiners indifferent to Keystone XL

The Wall Street Journal reports:

U.S. companies that refine oil increasingly doubt that the controversial Keystone XL pipeline expansion will ever be built, and now they don’t particularly care.

Railroads are carrying soaring amounts of crude from Canada down to refineries along the U.S. Gulf Coast, reducing the need for the TransCanada Corp. TRP.T -0.74% project, which is still awaiting approval from the U.S. government after two years of delays.

Meanwhile, a rival pipeline company, Enbridge Inc., ENB.T -0.90% is expanding existing pipes to carry Canadian crude south—and it doesn’t need federal permission because it’s using existing pipeline rights of way. In addition, so much oil is sloshing around the U.S. from its own wells that refiners don’t need lots more heavy crude from the north to keep busy.

“Keystone XL has been back-burnered for so long that any relevant parties have been able to make plans as though the project never even existed in the first place,” says Sam Margolin, an analyst at Cowen & Co.

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