Keystone approval could be "light bulb moment" for investing in Canada

|By:, SA News Editor

It's been nearly three years since the Obama administration started stalling and deferring its decision on the Keystone XL (TRP) pipeline, but the prevailing view is that the project will go ahead - and when it does, an approval could be "a light bulb moment" for investing in Canadian energy, says analyst Sonny Mottahed of Calgary-based Black Spruce Capital.

The Keystone debacle has resulted in negative investor sentiment toward Canadian energy stocks, depressing their values relative to U.S. counterparts, Mottahed says; approval would remove much of the negative psychology, with investors saying Canada is in the game again.

Many investors also feel that Keystone delays are constraining the development of Canada's energy sector, "so if that roadblock is removed, it would be a big positive," says Nomura's Charles St. Arnaud.

The uncertainty has resulted in “an overhang on market access against Canadians” that has pushed capital to the U.S. energy industry, Canadian Natural Resources (CNQ) CFO Corey Bieber says.