Good news - the Keystone XL pipeline is dead in the water. How can I make such a bold prediction? Consider why it needed to be built. Crude oil that goes to midwestern refineries is priced at the West Texas Intermediate benchmark. Crude that goes to Houston is priced at the worldwide Brent benchmark. Since last November's elections, the spread between those prices has shrunk from $23 dollars higher for Brent to only 2 cents higher. With virtually no differential between the two benchmarks, Canadian producers don't need to send their oil to Houston. This will enable President Obama to quash the Keystone XL pipeline and earn points from mainstream liberals. By the way, the increase is due wholly to West Texas Intermediate price increases (27 percent since November) as the Brent price hovered around $108 a barrel in November, same as now.
For a similar reason, the Gateway Pacific Terminal coal terminal is likely kaput. China no longer needs exponential economic growth and are happy to buy cheap Australian coal until they get the infrastructure built to maximize their own coal reserves. Without massive U.S. subsidies for the Gateway Pacific Terminal, U.S. coal cannot compete. However, it is unlikely new coal subsidies will pass the GOP-controlled house. Ergo, no subsidies - no Gateway Pacific Terminal.