This transcript is automatically generated
-- where does that all -- The Keystone Pipeline is anywhere but ending at the moment it is -- very highly debated topic in the US with protests popping up across the country supporters also -- in that.
From DC to San Francisco we have somebody who says whether you're for or against it there's money to be made.
John Stephenson is first asset investment management senior vice president portfolio manager.
Well money to be made it whether it's put into place I find this hard to believe how does that work job.
Well if it's approved obviously trans Canada the response to the pipeline would be great place to to -- some cash.
If it's denied -- and -- principal competitor would be a great place to park some cash and also in some of the railroads because.
They will do well I think the reality is -- this is what the Department of State ruled last month.
Is basically it's not gonna make it a bit of difference whether it's approved or denied in terms of the actual growth of Canada's oilsands.
And the fact that most of that oil is gonna move south into the US and ideally in the US Gulf Coast so one way or another it's coming.
Just -- matter how it comes.
We're showing three boards of the approval beneficiaries -- the rejection -- let's put the approvals back -- Suncor Energy is seen here why do you like this name as it relates to an approval of keystone.
Well I like it.
Because is very cheap it's throwing -- sixteen billion in free cash flow every year.
And this is something that will really benefit.
Currently the Canadian -- get a discount for their crude because they cannot get it to the principal market which is the Gulf Coast.
And so that discount -- ranged anywhere from.
-- -- 3540 dollars to currently about twelve dollars a barrel so there's the price you see on the screens in New York is is -- for them so they'll benefit by that.
That gap closing.
John do you.
Get the sense now I'm gonna ask at the very end whether you think is going to be approved but if -- were to fail approval here in the US does -- is TransCanada somethings that TransCanada something people should short.
Well I think you could go certainly make a little bit of money short term shorting -- candidate this is denied but -- -- -- caution you on that because.
They just announced the last week or so.
A conversion of their main line which is a natural gas pipeline to eastern Canada.
And that wouldn't.
Transport at roughly the same volume -- -- keystone XL pipeline would.
Going forward so I think either way they'll probably end up moving near the oil just depends -- where it goes.
OK now let's get to the approval beneficiaries -- you mentioned that vote.
Pacific railway Canada for Pacific railway -- Canadian national why these two.
Well the oil is going both say east and west currently as well as south and so these are the principal -- a rare royal railroads in Canada and these are the ways that.
Will be -- used to transport it to 1 o'clock eastern -- it.
If it's rejected but there's still growing their -- currently because.
Right now production is growing very rapidly under the oil -- so all the pipeline capacity is currently full that's why there is -- -- by industry for the pipeline.
-- think the pipelines going to eventually be approved there's a lot of politicking going on but in the end is this thing going to happen.
There's in my view it's all about politics and but I think -- the end of the day it's gonna happen because it is a no brainer economically.
It's jobs it's industry.
It's and it's American history it's American producers of the oil sands and American refiners who desperately want to get this product down in the Gulf Coast.
Right everybody needs to watch Nebraska because the governor of Nebraska who by the way as a Republican Dave -- -- has also said wait hold off let's -- about this but.
They do have support on balance as long as it doesn't go under apple -- are things that would really hurt their farming community so we will be watching this John thank you.
Well -- time list we're gonna put all of his picks for both rejection and acceptance of this deal on our FaceBook dot com slash after the bell Paige good to see John.
Good to see you any time.