Great Idea, ship it from Canada to Texas and then back up to the nortern states as gas and diesel. Makes sense to me, who wants a stinky old refinery up in the northern states when we can keep them pipelines piping. Maybe I’m missing something here? :( :(
Southern U.S. refineries import heavy oil akin to Alberta bitumen. Their price discounts are only about half the penalties - as much as 50 per cent off the world benchmark grades of light oil, Brent and West Texas Intermediate - charged against low quality crude in the Chicago region, TransCanada has estimated.
Refineries in Texas and Louisiana are set up to refine heavy oil like the Orinoco crude from Venezuela. Refineries around Chicago are not; perhaps it is too difficult for them to get through the state and federal regulatory processes. The building of this pipeline will enable Alberta (and Saskatchewan, where oil production is increasing) to sell in Texas and Louisiana, where they can get a significantly higher price for their product than they can in Chicago.
Some readers here may be wondering why Canada and the U.S. aren't already connected by a web of pipelines -- after all, they're not enemies, there's a lot of oil and gas produced on both sides of a long border, and it's all free of OPEC boycotts, Hugo Chavez, and Middle Eastern political issues. The reason that such pipelines don't exist already is that the U.S. Congress blocked them in order to maximize profits for oil and gas producers in the northern states. Many politicians participated; one who was particularly notable is Montana Senator Max Baucus. This was one of the reasons that Canada's Conservative Party federal government of the 1980s became interested in negotiating a free trade agreement with the U.S. The so-called "Super 301" legislation was used to impose sudden blockouts of Canadian energy and agricultural products. This benefited oil, gas and agricultural interests in places like Montana and North Dakota at the expense of American consumers in general.