I’m still not sure that the Keystone XL pipeline would have done anything but raise fuel prices in the PADD II market by alleviating the glut of Canadian crude oil available there for refining. The stated purpose of this pipeline is to move Canadian oil to the Gulf for Export to Europe. If someone has links that refute this, please post them, I’d love to read them.
thackney may have an opinion.
I would say it is very short-sighted to judge something like a crude oil pipeline based on immediate market conditions. Bottom line, the Canadians are going to find a way to sell their oil. They are not going to just sit on it so drivers in the upper midwest get a bit of price relief. It’s far better for the US for that oil to go to US refiners than to the Chinese. Sure the US Gulf Coast exports refined products to Europe but it also feeds a vast network of product pipelines in the US. The fuel will go where it is most needed, which might be the UK one day but Arkansas the next.
The first is many if the refineries in Texas handle the,.... less than sweet light crude than comes from Venezuela so they can more easily accommodate the oil from the tar sands.
The second is that oil refined in Texas is shipped to most of the country through existing pipelines, MANY existing pipelines, they have already been built.
I would have no doubt some of this may be exported, but I think the majority would be used here.
Finally, I think the pipeline from the Dakotas on ought to be built since quite a bit of oil is being produced there and since no international boundary is involved the State Department should have no role to play. You can always add on the bit to Canada later if say administrations change.
So what addition refining do you think we will bring on to increase our refining output to create additional gasoline and diesel for export.
I see the Keystone XL as feeding our existing refineries feeding products to our consumption. It will only replace oil brought in from overseas
We currently produce slightly more refined product than we use, leaving a bit for export. But that can be directly associated with our demand. Eventually that demand is going to increase when we get our economy out of the toliet.
You can try to blame the Keystone XL expansion for the eventual equalization of prices between light sweet in Cushing/ Midwest deliveries and the same quality oil on the coast. But regardless of what happens with that pipeline, other transportation projects are going to equalize that difference. The producers investing money in Central and Plains states are not going to continue to accept a lower price for their product. Already other projects are started to reduce this glut and bring that oil to higher demanding market. For example, the Seaway pipeline from Cushing to Gulf Coast is in the process of being reversed to flow oil south instead of north. Other projects will continue to do the same, including rail already. That price gas has been closing for a while already.