The truth about the Keystone XL Pipeline...

[kentuck]

It is being promoted by the Big Oil companies. Why?

Primarily, it is to drive up the price of gasoline.

We have a limited amount of refineries that are used to supply the gasoline resources for this country. If the KXL oil is taken to OK and TX to be refined, it will replace the present supply that is being refined, and the price of gasoline will go up. Because the Canada oil will use the capacity of our refineries but they will then ship the product to the world market - it will not be kept within the US.

If a penny cut in gas prices equals a billion dollars of oil company profits, then you can see why this is important?

[louis-t]

1. B-b-but they promised the oil would stay here!!!1!1

And if you believe that....

[Fred Sanders]

2. Alberta tar sand oil, Hardisty it is called after the northern terminal 's town name; it is shipped to Hardisty,

Alberta, from northern Alberta, and is about 10 to 15 dollars a barrel cheaper than WTI. It is needed for the Gulf refineries after being mixed at Hardisty, Alberta, and then sent down the pipeline as Western Canadian Select. This will now be blended with high condensate "sweet" shale oil coming from Eastern USA and refined to gasoline at the Gulf refineries that have the capacity to refine the mix....for world markets. The Gulf refineries are on the Gulf for a reason...the international market.

The sands oil is "feeder stock" for the shale oil..but if shale oil production is being drastically reduced, less need at all for the feeder oil.

I am not sure if the Alberts tar sands can even exist with $30 Canadian heavy Hardisty oil.

http://en.m.wikipedia.org/wiki/Western_Canadian_Select

http://www.nrcan.gc.ca/energy/fuel-prices/crude/15085

Prices in C$

[LiberalAndProud]

3. I need something explained.

Why is it better business to build a transcontinental pipeline than to build refineries where the oil is fracked? What does Canada know that OK and TX don't?

[GummyBearz]

4. One thing that comes to mind...

...is that it will have to be shipped to its end destination no matter what. So routing it from the fracking area to get refined in a central location (like Oklahoma), then trucked east, west, north, south etc. somewhat makes sense.

I'm not sure on the cost of building a new refinery in Canada vs. the cost of building the pipeline... but you can be sure the workers in OK/TX will be pissed if they are told they need to relocate to the frozen north or lose their job.

[LiberalAndProud]

5. Might it be that it inflates oil prices?

If refineries are the supply bottle-neck, seems to me that not building more keeps the prices high. I'm no expert, just thinking out loud.

[GummyBearz]

11. Not sure it would... Saudi Arabia/OPEC has the power to put oil prices where ever they want

As we have seen in the last several weeks

[kentauros]

6. First off, they did not expect the controversy surrounding it in the least.

They expected to get it designed and built within a few years with no interference, not even for the International crossing. Similar transcontinental pipelines from Canada and into the US had never faced such opposition (much less, common knowledge of their existence.)

Second, a refinery takes at least two years to design and build from scratch. Cost is about a billion, or more, depending on its capacity. I don't know what the capacity of a single plant is, but would guess most can't handle the projected 800,000 barrels per day without splitting it up among other plants.

So, if TransCanada had to built their own plant with the capacity to handle that much bitumen per day, it would likely have cost them another couple of billion. While they would have finished either the pipeline or a new plant at about the same time, refining it at their site would still leave them with the problem of shipping the refined product to market. I don't know what the shipping capacity is for their ports, but would also guess they can't handle the surpertankers that would likely be required to get that much product out per day, or even more 'regular' sized tankers for the equivalent carrying capacity.

None of that is a problem for the Ship Channel in Houston, where most of the petro-chemical plants here are located. The port in Beaumont/Port Arthur also has the capacity for such amounts. I thought I'd seen a map showing a branch of the pipeline heading that way for processing, to seemingly further spread out refining capacity.

I hope that answers your question. Oh, Oklahoma is known as a primary distribution center for many of the major pipelines going across the country. Their refining capabilities are limited compared to what's on the Gulf Coast.

[LiberalAndProud]

7. Thanks. It does answer a great deal.

[kentauros]

8. You're welcome :)

I've stated it before around here, but I'm often dismissed as being an "industry shill." Too bad that's not true, or I wouldn't be unemployed by the same industry at the moment

[panader0]

9. How many jobs would this really create?

A few thousand to build the pipeline maybe. Then what, a few hundred afterwards? So Koch Bros oil can cross the USA's best aquifer and be sold overseas? I fail to see any upside for the US.

[kentauros]

10. Not many permanent ones, even with contractors

that do things like hazmat response and so forth. The people that build pipelines are pretty well established in the industry. Most are transient workers that go where the work is. They may have nice houses in that part of the country where they like to live, but they live on the road most of the time.

It's a highly specialized form of employment. There are generally little to no "laborers" on such jobs because there isn't any work for a general laborer. You have to be a construction person with a specific skill related to building, and burying, pipelines.

[madokie]

12. You got that Right