Investors bail on trapped Canadian oil as pipeline woes deepen

Increased environmental regulations (which force fossil companies to pay for the environmental degradation they cause), combined with lower oil prices, is causing investors to withdraw funding for pipeline projects. Increasingly investment in renewable energy makes more sense from every perspective.

Prosperity Saskatchewan

Investors bail on trapped Canadian oil as pipeline woes deepen

Kinder Morgan pipe

Canada’s energy companies can’t get any love, even from many Canadians.

With pipeline, regulatory and political frustrations reaching new heights, the nation’s energy stocks slumped to their lowest level in almost two years this month. The iShares S&P/TSX Capped Energy Index ETF, which tracks Canadian energy companies, has seen about $56 million in outflows this year versus $32 million in inflows for an ETF focused on U.S. stocks. The pain has extended to the fixed-income market, with U.S. dollar high-yield bonds from Canadian energy issuers returning less than their global peers in the past 12 months.

At the heart of the sector’s woes is a dearth of pipeline capacity, which has depressed Canadian oil and natural gas prices. A new regulatory regime designed to speed up pipeline approvals is instead seen delaying projects while Alberta and British…

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