Keystone XL Is About Exports

Is the Keystone XL push to the Texas coast for American energy or for export?

The U.S. EIA released a new graph that is an attention-getter. In 2011, petroleum exports exceeded imports. This was the first time for this in 6 decades. What is a lede like this doing in a Keystone XL post?  Ans: These data undermine a new attack on protestors to the XL upgrade.

The attack is a response to Pres Obama’s refusal to authorize the XL upgrade.  The argument behind it is that TransCanada Ltd. is America’s friend and truly wants the oil to reach U.S. consumers. Those who do not accept this fact are traitors against America, or maybe mad. The protest argument is that TransCanada wants to quick-ship its tar-sands oil to the Gulf refineries explicitly for access to the oil tankers that deliver the product to off-shore buyers. A lot of people have argued this, including our post here.  Our point: XL will damage the American continent and not serve to help our energy security one bit.

Dilbit_txtThe Keystone line ended at Cushing Oklahoma when it was completed, way back in February 2011.  Cushing seems incapable of handling the stuff when it arrives, oil just glutting about, the stuff puddling all around the landscape.  Good American patriots (the Canadian corporate uppers) want to move the dilbit via a new modern line to where the big refineries are.  Which is at the Texas coast, just accidentally near shipping ports.

Reality – the newly completed Keystone line has been pumping hard for just about a year.  It carries stuff to two Illinois refinery centers (Patokie and Wood River) and those at  Cushing Oklahoma where the West Texas Intermediate (WTI) pricing is controlled. The amount of oil there has lowered the price of WTI vs. Brent by a lot.  So, this pool is good for normal folks’ economy because it is a brake on price increases.  Yes, fuel price is going up, but think about what it would be without that ‘glut’ around Cushing.

Are the owners of the refineries too stupid to think of enlarging capacity to handle the new flow?  Maybe these are the ones stopping all that oil from entering the U.S. market and reducing our gas prices.  Should we indict them all for Treason? Where is HUAC when it is needed against this new commie subversive 5th column of rich refinery owners?  On the other hand, the last paragraph suggest maybe we should give them all Congressional Medals of Honor for doing more to hold down U.S. prices than any other group in all the Americas.

IEAreport_img New Export Data:  This figure is from the U.S. Energy Information Administration report, 2012 Mar07. Exports exceed imports in 2011 for the first time since 1949.

This is clear proof that our extracted oil being diverted to off-shore markets rather than used to support home prices.  We vigorously sell abroad, even though we generate only 1/3 of our current demand. These sales are driving up petroleum prices.

Last year Obama opened up the strategic petroleum reserve ‘to fight rising prices.’ Coincedentally, this was when net exports became positive.  TransCanada wants access to the Gulf ports for the same reason the Strategic Petroleum Reserve was drained. To ship oil abroad so that someone can make lots of money.

click for all our discussions about the Keystone XL pipeline

TransCanada must think the U.S. public is simple.  They just completed their new pipeline, now they want a massive new duct out of the American heartland. If they just wanted a place to refine their tar-shale oil, why are the trying so hard to open a Pacific port close to the Alberta fields?  Maybe because Japan has no oil and China needs it badly.

Rhetoric aside, the tar-sand output has been flowing for only a year.   Give the marketplace time to respond.  The Ultras who own the markets and direct Cushing, Patokie and Woods River refineries will not let the huge money river flow past them.  That is, unless they suspect the current oil supply will end soon.

Let’s all stop name-calling and allow the existing brand-new pipeline to mature.   THEN we can discuss actual upgrades.


Charles J. Armentrout, Ann Arbor
2012 Mar 11
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About LastTechAge

I am a physicist with years of work in fusion labs, industry labs, and teaching (physics and math). I have watched the tech scene, watched societal trends and am alarmed. My interest is to help us all improve or maintain that which we worked so hard to achieve.
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