In purely chronological terms, the opposite of a “Scaramucci” could arguably be called a “Keystone.” The Keystone XL pipeline expansion was first proposed almost 13 years ago. On Wednesday, newly installed President Joe Biden killed it. Again. This one looks like the actual death knell. Certainly, the message from the market to TC Energy Corp. — the Canadian company that wanted to build Keystone XL — is to just walk away; the stock isn’t notably bothered by the pipeline’s latest demise. Such sanguinity speaks to how the world has changed since July 2008; a mere Keystone, yet so many Scaramuccis, ago. That was a hot summer for the oil market.
Piping Hot
The Keystone XL project was proposed less than a week after crude oil prices hit their all-time peak
The oil price is only the most obvious difference, itself a manifestation of the bigger change. Fear of “peak oil” supply gave way to a growing expectation of peak demand. The intervening period has, among many other things, witnessed the resurgence of U.S. oil supply from shale; the emergence of electric vehicles exemplified by Tesla Inc.’s soaring stock; and the reformation of OPEC as a bigger group to deal with this changing world.
Popularity Contest
Interest in peak oil has collapsed as challenges to it on both the demand and supply side have risen
Source: Google Trends
The political context has also been transformed. Since the failed attempt to pass cap-and-trade carbon emissions legislation in President Barack Obama’s first term, climate policy has become even more of a tribal issue (just like everything else). Obama ultimately used his executive authority to block Keystone XL in 2015. Notably, he justified it on the grounds of strengthening U.S. credibility in global climate negotiations. Under President Donald Trump, “energy dominance” dictated loosening constraints on the oil business, including using executive authority to revive Keystone XL. Now the president’s pen will work once again in the opposite direction.