October 16, 2011 12:05 am • By MIKE DENNISON Gazette State Bureau
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HELENA — A big selling point for the Keystone XL pipeline is that its billions of barrels of Canadian crude oil would provide “energy security” for the United States, giving the country a long-term, reliable supply of petroleum from a friendly ally.
But some critics of the pipeline are questioning this claim, saying much of the oil could end up as gasoline and diesel fuel exported to Europe and Latin America.
“The oil industry will sell their product where they will get the best price for it, (and) markets for diesel, in particular, are much more profitable abroad,” said Steve Kretzmann of Oil Change International, a clean-energy group opposed to the pipeline. “Those are growing markets. That’s what we base the assertion that this is primarily an export pipeline on.”
Keystone XL, proposed by the Canadian energy giant TransCanada, would be a 1,660-mile pipeline from Alberta to Texas. President Barack Obama is expected to decide by the end of the year whether the pipeline is in the national interest and whether to grant it a special permit.
The $7 billion pipeline, which would cross 280 miles of northeast Montana, would transport up to 830,000 barrels a day of crude oil from the Alberta tar sands to U.S. refineries.
Terry Cunha, a spokesman for TransCanada in Calgary, Alberta, said it’s his understanding that most of the oil will be for domestic use in the United States.
“As we’ve highlighted, why not get (this oil) from Canada, versus importing it from other countries that don’t share the same beliefs as we do in Canada and North America?” he said.
A spokesman for the largest U.S. petroleum refiner, Valero Energy Corp. of San Antonio, Texas, said that while some of the Canadian oil may be refined into products for export, it would be a small part of its overall use.
“Exports are an important part of our marketing effort, but it’s a small part,” Bill Day said. “There is nothing about Keystone XL pipeline that’s going to change that. It’s not set up to be an export pipeline.”
Valero is one of six major companies that have signed up to use three-fourths of the pipeline’s capacity, according to Canadian regulatory documents.
While pipeline backers say oil from Keystone XL is needed to help wean the United States off oil from politically volatile sources in the Middle East and Africa, government data show that the United States got three-fourths of its petroleum from the Western Hemisphere in 2010.
That Western Hemisphere oil came mostly from U.S. production (51 percent of the country’s consumption), Canada, Mexico and Venezuela.
Read more:
Keystone Pipeline: Would oil be consumed in the U.S. or exported?