There have been whispers over the last three years that the Keystone XL Pipeline is a doomed project. Analysts say it can’t operate at a profit unless world oil prices are around $80 or $90. That price level for oil seemed a sure thing when the pipeline was drawn up but now seems exceedingly unlikely.
Contracts probably don’t allow the project to be canceled, so one possible scenario is that the pipeline is completed and operates for a few months or a year until the money runs out. In that scenario the pipeline loans will never be paid back. If you’re leading a doomed project and you don’t have the authority to cancel, one approach you can take is to slow everything down in the hope that circumstances change. Now that approvals are in, it looks like that may be the guiding dynamic for the Keystone XL Pipeline.