Yesterday Prime Minister Steven Harper was in New York speaking on bilateral issues. He was speaking at the Council of Foreign Relations. One of the main topics was the Keystone Pipeline Project through the US. PM Harper provided support for the project indicating that the positive aspects outweigh the negative.
Before I go further I must confess that I am not an oil and gas specialist. I do not follow the industry closely and to the best of my memory I have never invested in oil and gas (directly). One of the best ways to demonstrate my skepticism for oil investing is to provide a chart. Here is a chart of oil around 2008-09:
On the chart you see oil decline from $145 to below $40. Then back up to $70. These kinds of swings are heart stopping for me. It reminds me of the early 80's when oil collapsed. (and 1986). BTW please do not take this personally - the folks who manage the companies are very talented as far as I can see.
Anyways, back to the issue of Keystone. This project has taken on a gargantum life of its own. It has been going on for at least 2 years in the public domain. This project has a capital budget. Billions of dollars tied to thousands of jobs. I suspect that given all the time spent by politicians, TV pundits, analysts, environmental groups and other interested parties the cost of approving (or dis) will soon exceed the capital cost of the project. Well OK maybe I am exaggerating. Clearly US politicians need to make some decisions here. 2 years is long enough to decide.
Finally, if you want an explanation of why the economy is slowing down in growth this Keystone issue is a great example. Delays due to lack of political will and decision making will obviously slow down projects and the economy as a whole.
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