Keystone XL Won’t Decrease “Unfriendly” Oil Imports Either

Written by Brant Olson

Topics: Oil

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Image credit: Richard Saunders

Yesterday, AP reported that the proposed Keystone XL tar sands pipeline to Texas won’t decrease gas prices (I broke that story last month, but who’s counting). In fact, a report commissioned by pipeline sponsor TransCanada now shows that connecting tar sands producers with Gulf Coast refiners actually pushes gas prices up for everybody.

That same report contains another unreported secret: Keystone XL won’t decrease so-called “unfriendly” oil imports either. According to the same 2008 report, if Keystone XL were completed in 2013, Gulf Coast “imports are forecast to decline initially before 2010… and then to increase by over 600,000 [barrels per day] by 2020.” Why? Because Gulf Coast “Crude runs… are projected to grow by over 500,000 [barrels per day] by 2020.” (See chart from the report, below).

So while TransCanada’s radio commercials claim that the “Transcanada Keystone Pipeline can reduce America’s dependence on  oil from unfriendly places, like Venezuela and the Middle East, by up to 20 percent,” the company’s own research shows otherwise.

The chart below sums it up nicely. If we build XL, we’ll continue importing just as much oil from Venezuela, Saudi Arabia and other “unfriendly sources,” while dirty Canadian crudes will top off the tanks of expanding Gulf Coast refineries. Put another way, Keystone doesn’t make us less dependent on dangerous sources of foreign oil, it only digs America deeper into a crushing dependence on an ever-dirtier, ever more expensive addiction to oil.


"PADD III" refers to the Gulf Coast Region--NM, TX, MS, MI, LA and AL

2 Comments For This Post I'd Love to Hear Yours!

  1. Denis C says:

    There is a huge flaw in your logic Brant.

    If the Keystone pipeline does not provide 500,000 barrels per day of oil to the US in 2013, the overall requirement for oil in the US will stay the same, so this 500,000 barrels per day (bpd) will have to come from another foreign source. Who will the US buy the oil from?

    According to the EIA, in Jan 2011, 3000 bpd of oil came from Venezuela and the Middle East. So, if the oil supplied through the Keystone pipeline offsets the oil purchased from these regions, there would be a 16% drip in oil coming from Venezuela and the Middle East. The chioce from where you obtain your oil imports is in the hands of the US people.

    Please see the attached link for the EIA import information.

    Will imports from Canada reduce the price of gasoline in the US? That is a very speculative question depending onthe worldwide supply, demand and projections. If we look at how the price of oil has been affected by the recent unrest in Libya, then removing supply from Canadian oilsands will definitely have an impact in the overall world oil price equation.

    In short, until the US can wean itself off of foreign oil, where do you want this foreign oil to come from?


  2. Brant Olson says:

    Denis, you’ve missed my point. Simply put, Building XL won’t decrease imports from what we import today. If we build XL, we’ll be importing just as much oil from Venezuela and the Middle East as we do today. Don’t take my word for it, the EnSys report commissioned by DOE last year found the same thing.

    TransCanada’s ads say its pipeline will make us less dependent on unfriendly regimes, but that’s not true. Only cutting oil demand will get that job done, and XL takes us in exactly the wrong direction in that regard.

    But even if you don’t care about reducing oil demand, even if all you care about is secure energy supply, XL is exactly the wrong way to go. Why? Because XL means Canadian oil companies can sell their oil beyond North America. Access to Gulf coast export terminals means the US has to compete with everybody else for Canadian crude. That’s the same reason why XL would make gas more expensive to Midwestern consumers.

    XL has nothing to do with energy security. It’s all about making more money for Canadian oil companies.

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