In Canada, the oil and gas industry has already been substantially weekend, in part due to pipelines, politics, fears of the stakeholders and foreign influences.
Investors confidence is down. In the past, oil and gas producers could count on an average $15 to $20 billion of new debt and equity per year. This last year, the inflow was just over $1 billion.
The S&P/TSX Oil and Gas Index has dropped 42% in the last two years. Much of that is due to price discounts in pipeline-constrained regions. All the while a leading exchange traded fund for coal is up 23% over the same amount of time.
So the question is. Will a pipeline improve things that much? In the U.S. the S&P Oil and Gas Index is down as well. Not as much, by down 17% non the less. Which is a cause for concern when broader markets are up around 18%.
A growing number of money managers, know that profitable renewable energy sources are seen as a challenge in terms of long term growth. Reduction in oil and gas demands are years away. But that doesn't stop today's investors from being pessimistic about investing.
Perhaps the challenges Canadian companies are facing today, will be the force that leads Canada to become an energy leader in the world. Canada's plight could lead to more innovation. Furthermore we have a head start, Canadian companies are having to adapt to lower prices and regulatory issues sooner than others around the world.