[ROCKMAN]

Not much news lately about the lack of approval from the border crossing permit of the Keystone Pipeline. And for good reason: it was never an issue affecting imports of Canadian oil sand production on any significant level. The current projection is for Canadian oil exports to the US will be the highest ever in 2013. From:

http://fuelfix.com/blog/2013/02/19/cana ... efineries/

"Canadian oil sands crude is now streaming into refineries on the Texas coast even as environmentalists are attempting to block its southward flow through the Keystone XL pipeline now under construction. Canadian pipeline giant Enbridge recently increased its shipping of the heavy hydrocarbon after a set of expansions allowed it to start transporting oil from a hub in Cushing, Okla., to the Gulf Coast last year. Enbridge completed a pipeline expansion last month. The company’s Seaway pipeline has a total capacity of up to 400,000 barrels a day, though the capacity is lower when it transports oil sands crude. The system connects with other pipelines that move oil from Canada and from shale plays throughout the U.S.

Prior to Enbridge’s expansions and changes to its pipeline system, only small amounts of crude from Canadian oil sands made it either by rail or through small pipelines to the world-class refineries along the Gulf Coast. The new rush of oil sands crude to the region will allow oil companies to sell their products for higher prices. Landlocked oil in Canada and North Dakota sometimes sells for as much as $40 a barrel less than oil regularly purchased by Gulf Coast refineries. The availability of a large quantity of Canadian diluted bitumen, combined with a large amount of Gulf Coast refining capacity, has resulted in “the perfect marriage” of supply and demand linked by pipelines like the Seaway. This pipeline, which runs from Cushing to Freeport, formerly moved oil north, but Enterprise and Enbridge spent $300 million to reverse its flow because booming production from shale and Canadian oil sands created a glut of landlocked oil in the middle of North America. The reversal also incorporated modifications that increased the Seaway’s capacity from 150,000 barrels a day to 400,000 barrels a day. Enbridge and Enterprise also are collaborating on a new $2 billion pipeline that will run parallel to the existing Seaway line and will add another 450,000 barrels of southbound oil shipping capacity from Cushing."

Just to be sure the important point isn’t missed: companies spending 100’s of $millions to expand the transportation system for Canadian oil sand in the US should be a fairly good indication of continued and increased imports into the US whether the border crossing permit is granted or not. As pointed out before: fighting a battle to stop that permit is fighting a battle in a war already lost. The oil sand production is coming to the US...period. I don't say that to rub the rub the noses of the environmentalists in "it". Just pointing out they might focus their efforts on potentially more fruitful projects. While the POTUS was able to use his refusal to sign the permit for his political gain, the US govt has fully supported the importation of every Canadian bbl of oil possible.

[Plantagenet]

While the POTUS was able to use his refusal to sign the permit for his political gain, the US govt has fully supported the importation of every Canadian bbl of oil possible.

Yup.

And last month Obama signaled he is going to approve the Keystone XL Pipeline as well. He's just waiting for the right political moment.

The Obama administration has turned out to be very good for the oil biz.

[ROCKMAN]

P - Yep...none of our conservatives (and especially our right-wing nut cases) care for his positions on many issues but you won't hear us complain about anything business related with the exception of his talking about getting rid of the Intangible Drilling Cost tax credit. But so far it has only been talk.

[pwallmann]

Rockman,

I was surprised with how low the volume of Oilsands oil reaching the gulf coast for refining was. I'm having trouble locating where this oil is currently being refined. Can you shed some light on where this oil is being moved to for refinement? Thanks!

[ROCKMAN]

p - Mostly from what I've read from other posters it was going to mid-west refiners who were making a killing: buying oil a lot cheaper than the Gulf Coast refiners but marketing their products at prices close to national levels. With the bottleneck being broken at Cushing they are beginning to lose their lock on some of those imports as well as having more price competition from Texas refiners. Which I why I made the point that Texas oil producers were hoping for anything that could inhibit that Canadian oil from making it down here. I’ve been barging my SE Texas oil to La. and getting LLS prices which have been considerably higher than WTI. But that differential has been steadily falling as more Canadian crude made it down here.

[pwallmann]

Thanks Rock for the Info. I didn't realize that MW refineries had the ability to handle that much heavy oil. Sorry that our oil showing up is going to cut into your margins!

[ROCKMAN]

p - No worries. We always working on other ways to screw the oil buying public. Hmm...I meant to say we're always looking for ways to decrease our dependence on imported oil and provide the American people with greater economic stability. Yeah ... that's it...that's the ticket. LOL.