quote Originally posted by blackrams: I really doubt Canada is going to change Biden's mind, their oil isn't really needed at this time. Though, I do firmly support their efforts, I'd rather us use their oil so we don't have to our oil.. I don't believe the price difference is significant. Feel free to correct me if I am incorrect on that. Rams

You are, partly wrong. Unlike babies, not all oil is created equal.
Even tho we as a nation are a net exporter of crude oil and refined crude products, it isn't true for all states. People think oil is cheap to ship/transport. It isn't. It IS,complicated. Pipelines are generally owned by pipeline companies with sometimes a refining company owning a share of it, but federal law requires the ownership to allow any refinery or midstream company access to the lines as long as there is capacity available and the user pays the tolls. Cost/bbl/mile and, it is also dependent on the spot price (value of the product) and the type crude or finished product being pumped thru the line. For the Canada side of the Keystone, the cost is calculated on cu litre and not the standard 42 gal bbl. It's cost also depends where the oil is going (it's destination) Looking at the tolls on Dec 31 2020, heavy crude pumped from Hardisty, Alberta to the U.S. border near Haskett Manitoba, with deliver to Houston Texas it cost the destination $16.53/cu ltr. On the same day, heavy crude from the same source going to Cushing Ok cost $19.38. Crude going to Wood River/Patoka Ill cost $17.50/cu ltr the same date. Why was it cheaper to ship all the way to Houston--because they have what is known as a 20 yr committed contract for certain oil coming thru the Keystone. Cushing and Patoka have comitted contracts for some products, and are uncomitted for others. In the above case, they were getting oil not comitted to their contract.

It's complicated..
Only the Gulf Coast states and NM are really energy independent, with most of the other states dependent on gulf coast oil or foreign oil. That mostly means Canada and Mexico currently. Why? Gravity, terrain, distance. It is extremely difficult (and costly) to pump crude oil from the Gulf Coast over the Rockies, Appalacians and Smokey Mountains and of course, the distance is a big factor as well.
Even without the mountains, LA Calif, Patoka Illinois, Cushing Ok, Hardisty Alberta are all higher above sea level than Houston Tx by hundreds of feet. (Hardisty Alberta is nearly 2000' higher in elevation than Houston)

Almost all the crude we import from Canada ends up at Gulf Coast refineries and it is predominantly heavy high sulfur crude oil. High sulfur oil is often called sour oil as opposed to light sweet crude that is found on 'some' of the gulf coast and the West Texas Permian Basin. West Texas Intermediate is one of the 3 benchmark crude oils traded on the world market. (The Gulf Coast DOES produce a lot of heavy sour crude. The other 2 benchmarks are Brent (NorthSea) and Dubai.) The benchmark designations have more to do with availability and destination than specific gravity or sulfur content. Within those benchmarks are various other & more definitive designations for different types of crude. Another aspect is TAN.. total acid number. Much of the oil produced today has a higher TAN and it is more corrosive to pipelines and processing equipment.

it's complicated..
The crude being transported thru Keystone from Canada is called WCS. Western Canadian Select. Tar sands crude are thick and are bituminous and will NOT flow well as produced. It's either strip mined of forced to flow by high pressure steam which heats it up and makes it less viscous. To be transported very far, they have to be diluted with something thinner in order for the product to be pumped. There is a product at the wellhead of many conventional oil wells called condensate. We used to call it 'drip gas'. Thin, highly flamable and it could be burned right from the wellhead in farm equipment and early automobiles. This is often used to dilute the btumen 'oil' but there isn't enough of it so they use synthetic oil to thin it with. The product that comes across in the Keystone from the oil sands is actually known as Dilbit. Diluted Bitumen. This, will usually get blended with non Dilbit at the destination.
Almost all Gulf Coast refiners can and do process heavy high sulfur crude, while refiners on the East coasts and in the heartland usually do not. California refiners like Phillips66 can and do processheavy high sulfur crude and Calif, uses a combination of regional produced oil but previpously imported a lot of South American and Mexican crude via tanker ship.

Heavy sour crude historically came at a discount. It was cheaper, but. (again, it's complicated) with the ban on Venezuela and Iranian oil, heavy sour crude has become harder to get.. and thus, more expensive. The spread between light sweet and heavy sour has narrowed enough that some refiners that had planned to add cokers (they remove sulfur) to existing or new units have cancelled those plans.
What effect the permit loss for KeystoneXL will have is yet unknown, but I suspect if the spread between domestic light sweet and imported heavy sour again increases, we will see increases at the retail level.

[This message has been edited by maryjane (edited 01-20-2021).]

Google is watching....


up yours greenies

How dare me!!!

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[This message has been edited by blackrams (edited 01-20-2021).]