"Keystone XL is a way to get Canadian oil out of the United States"

Discussion in 'Energy' started by newpolitics, Jan 26, 2012.

  1. newpolitics
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    newpolitics vegan atheist indy

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    Last edited: Jan 26, 2012
  2. Mr. H.
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    Mr. H. Diamond Member

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    A blog? NRDC?
    :lol:
     
  3. newpolitics
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    newpolitics vegan atheist indy

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    Go stick with Fox news, who makes up numbers like 20,000 jobs, when in fact, it is in the hundreds. Who cares if this was written on a piece of toilet paper in the bathroom if it is true?
     
  4. Mr. H.
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    Mr. H. Diamond Member

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    I don't watch Fox.

    I do subscribe to various industry newsletters and reports.

    You know- the folks who are actually in the business and know what the fuck they're talking about.
     
  5. newpolitics
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    newpolitics vegan atheist indy

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    Good for you. You honestly don't believe that the Keystone XL is an export pipeline? You really think it is going to be used for US energy alone?
     
  6. Mr. H.
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    Mr. H. Diamond Member

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    This is long, but bear with me- it took a while to write it...

    Any way you slice it, we import 9 million barrels of oil per day into this country. We'll continue to do so regardless of the Keystone pipeline. That figure of course will change based on domestic production and domestic demand.

    That said, the Keystone pipeline would serve several purposes regardless of the end market for that oil. Quite simply, more oil from Canada means less need for oil from other source countries. Again- regardless of the end market (I'll get to that).

    It will also act as a conduit for relieving glutted inventories of domestic crude oil in the Cushing, OK area. Cushing is a gathering hub for much of the Midwest's crude. Continually holding such massive inventories is expensive and inefficient.

    Cushing is also a pricing point. Not for the entire country, but for that more localized Midwest and Near west market. This has depressed the price that "local" producers get for their commodity. It's probably anywhere from $5 to $10 per barrel. That difference is neglegible with respect to nationwide average gasoline prices. But to the folks who produce that oil, it's significant.

    Keep in mind that this project isn't one long continuous pipeline from Canada to the Gulf coast. It's a section that, along with other existing pipelines, would allow for a virtual uninterrupted flow of (ultimately) 700k barrels of Canadian oil per day.

    The "end market"... domestic demand for motor fuels has dropped because of the depressed economy and of course higher prices. Foreign economies aren't doing much better but there are select markets where demand for motor fuels (and other refined fuels and products) has increased quite a bit. So, rather than flood the U.S. with even more expensive motor fuels (which would not drive down the retail price), refiners are seizing the opportunity to export refined products.

    Is this a bad thing? I think not. Refineries operate best at near capacity. Better efficiencies and better economics. Rather than idle capacity or shut down entire units and lay off workforce, its best to run near full-tilt. Ergo... the net export of fuels and products.

    So, no - this Canadian oil would not be used for U.S. energy alone. Why should it be?
    This NET exporting of refined products results in more economic activity and value that is added HERE. It's driven by overseas demand and follows the same export-led strategy that other industries use in order to compensate for lower US demand for their output.

    Does this scenario sound familiar? It should.

    Many years ago, we reached a threshold in this country where agriculture became such a large and efficient industry that they were producing more food and food-grade products than we could ever hope to consume. So- what did they do? Ag exports are a multi-billion dollar business. Personally, I'm wondering why my grocery bill has skyrocketed while agriculture is allowed to export millions of metric tons of grain annually. I also wonder why 30% of our corn crop is turned into something as useless as ethanol. And I'm wondering why we EXPORT 20% of the ethanol that is produced.

    To make a long story longer, you can flood the market with $90 oil and you'll just have more $90 oil. You can flood the market with $4.00 gasoline and you'll just have more $4.00 gasoline.
    But if you take some of that oil, and some of that gasoline, and find a way to get it to an "end market" and do so by generating economic activity, increasing jobs, contributing to the GDP of this country, and reducing the trade deficit- well why the fuck not?
     
  7. LilOlLady
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    LilOlLady Gold Member

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    You are one of the very few who is really listening and doing your home work. Listening to Rush and Foxnews do not give you facts.:clap2:
    Canada is already the largest importer of oil to the U.S. so we don't need a pipeline. Who does? Canada. The few temporary jobs are a waste and who will pay the workers? Canada or U.S.? Environmental and cost of buying up land is not worth the trouble. XL pipeline is the biggest scam on American since the "illegal aleins needed to for our social security."
     
    Last edited: Feb 21, 2012

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