A new question about the XL pipeline.

[cleller]

My wife saw a propaganda ad in something called the Lush Times, a coupon catalog purporting to expose "myths" about the pipeline. It says that all the oil transported from Canada to Houston would be for "export only", thereby not contributing any energy security. This seems like an oversimplified statement, obviously trying to get quick sympathy against the pipeline. It has a website cited called 350.org, with an online petition against the pipeline.

I imagine this is a shell game they are playing. The oil may well be for export, but is this more of a method to stabilize the import/export picture? With Transcanada oil flowing thru the pipeline does it mean fewer barrels imported from OPEC, and less US oil being exported?

I thought I might get a more even handed explanation here.

[olevetonahill]

My wife saw a propaganda ad in something called the Lush Times, a coupon catalog purporting to expose "myths" about the pipeline. It says that all the oil transported from Canada to Houston would be for "export only", thereby not contributing any energy security. This seems like an oversimplified statement, obviously trying to get quick sympathy against the pipeline. It has a website cited called 350.org, with an online petition against the pipeline.

I imagine this is a shell game they are playing. The oil may well be for export, but is this more of a method to stabilize the import/export picture? With Transcanada oil flowing thru the pipeline does it mean fewer barrels imported from OPEC, and less US oil being exported?

I thought I might get a more even handed explanation here.

Havnt kept up that much, But from what Ive read IF we dont allow the Pipeline then Canada will pipe it to their west coast and ship it to China
Ive heard that it will deliver upwards of 700,000 Barrels a day to the refineries in and around Houston, Now where that Gas will go after refining is any ones guess

Im in favor of the Project for the simple fact it will greatly reduce our dependance on Mid East oil and keep Money out of those Lunatics hands

That 700K a day is somewhere around 1/2 of what we import from the Mid east.

[pphilfran]

It doesn't make one bit of difference if we use it or sell it...

Look at it this way...

My business requires 10 do dads a day to operate....we produce 8 do dads a day in our own facility...so we need to buy two from outside sources to stay operational...

If I sell one do dad to another company at the going rate of 10 bucks I will then need to buy a replacement do dad for the going rate of 10 bucks to keep operational...

So I still have the daily inventory of 10 do dads in stock at the same cost to my company...

[cleller]

It doesn't make one bit of difference if we use it or sell it...

Look at it this way...

My business requires 10 do dads a day to operate....we produce 8 do dads a day in our own facility...so we need to buy two from outside sources to stay operational...

If I sell one do dad to another company at the going rate of 10 bucks I will then need to buy a replacement do dad for the going rate of 10 bucks to keep operational...

So I still have the daily inventory of 10 do dads in stock at the same cost to my company...

Say, what do dad all mean?

[pphilfran]

Say, what do dad all mean?

It means that it makes no difference if we sell some of it...in the end we have more crude with less money going out of the country...

Think it through...

[olevetonahill]

It means that it makes no difference if we sell some of it...in the end we have more crude with less money going out of the country...

Think it through...
UH, If the Money going to Canada Then it still going OUT the Country
jes sayin

[OULenexaman]

Think it through... I will do dat.

[pphilfran]

UH, If the Money going to Canada Then it still going OUT the Country
jes sayin

I don't know what I was thinking...it is Canadian crude...but it still don't make no difference...other than we would be buying from somebody else instead of Canananananada...

[Skysooner]

The XL pipeline is being built to transport heavy Canadian tar sands oil down to the Gulf Coast for either shipping or refining in one of the GC refineries that has been refitted for this heavy crude. As to what happens after that to the byproducts, it depends on the byproduct. We have found so much light, sweet crude lately and wet gas condensate that the lighter ends aren't making much money in the US. These products are likely shipped overseas. I would imagine any gasoline would stay in the US.

Here is something that many people don't know. It is illegal to ship any crude oil produced in the US offshore. After it has been refined it is okay per statute. This crude is produced in Canada, so it isn't subject to the same regulations.

Also, the delay in the XL pipeline is going to have an effect on the natural gas price in about 18 months to 2 years. The delay means that an increase in NG demand (ng is used in the process to extract this Canadian crude) won't happen as predicted. This was not built into the forward NG curve, and it means that at some point NG prices won't be as high as they could be (likely $0.30-$0.50/MMBTU effect for a bit) which affects corporate revenues for companies heavily dependent upon NG (Devon and Chesapeake for example).

[pphilfran]

Sky always has a good take on things...

[Skysooner]

Sky always has a good take on things...

What was funny is that initially I was kind of neutral on the whole pipeline issue. I tend to ignore political posturing as much as possible. It keeps me from stressing too much. However as part of my job, I feed data to a team in our company that does forward NG and crude oil forecasts. I found out about much of this from them. It was eye-opening and changed my perspective away from the environmental issues (never took those seriously to begin with) to the economic issues associated with moving the crude, etc.

[picasso]

My bro in law was VP of Transcanada a few years ago and he spent much of his time going to town hall meetings trying to help folks understand the big picture.

He's with a different company now.

[TheHumanAlphabet]

Don't know what in the hell they are talking about. The Gulf Coast refineries are about the only place that can take that low grade crude and upgrade it into usable products. Most of the High Carbon chains will go to chemicals feedstock here in SE Texas. gasoline in typically used in the U.S. Diesel is about the only product I understand that could be shipped out, typically to Europe. We don't use much diesel here. PetCoke (Petroleum Coke) a byproduct from Coker refining could be shipped to China for the steel industry, but we alos use much of it in the US. I'm calling BS on Lush Times.