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Author Topic: TransCanada says east route eases oil discount Back to Topics
Nicoalbum

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Ottawa

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Message Posted: Feb 8, 2013 1:26:04 PM

Crude from Alberta’s oil sands sells at a 30% discount to its U.S. counterpart. TransCanada Corp. Chief Executive Officer Russ Girling plans to narrow that gap whether or not his Keystone XL pipeline to the Gulf of Mexico wins approval from the Obama administration.

Canada’s second-largest pipeline company proposes to ship oil 3,000 miles (4,825 kilometers) to the Atlantic Coast, allowing producers to send it by tanker to the Gulf, Girling said Wednesday in an interview at Bloomberg’s New York headquarters. While he expects U.S. passage of Keystone “very soon,” the East Coast route makes sense in any event because of rising production from Alberta.

Pipeline bottlenecks due to U.S. refinery downtime and increasing output are depressing prices of Canadian crude, which sold for 30% less th
Visit Financial Post for full article
REPLIES (newest first) Post a Reply
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drpepperTX
Champion Author Texas

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Message Posted: Feb 10, 2013 11:19:02 AM

Correct Cdnlynx.
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CdnLynx
Champion Author Ontario

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Message Posted: Feb 10, 2013 1:04:09 AM

These articles need clarification; it was always my understanding the the Keystone XL pipeline was going to carry both American and Canadian (shared pipeline) crude to be refined on the Gulf coast. The Canadian portion should then not be considered in any American Import/Export equation and should not come under any US quotas!
Now for another problem; Canadian crude oil prices; they are saying that Canadian crude is getting lower prices due to the quality of the crude; Canada has many different qualities of crude oil, not just tar sands!
Canadian Crude assay's
There is no mention of the prices for these other grades of Canadian crude that are harvested by conventional oil rigs! Higher grades/(assay's) should be able to command a higher price then just Tar Sands bitumen!
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lesndave
Champion Author Texas

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Message Posted: Feb 9, 2013 11:24:16 PM

Hmmmm
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MAC48
Champion Author Dallas

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Message Posted: Feb 9, 2013 10:16:46 PM

This article keeps stating that Alberta or Canadian oil producers had foregone profits of X, Y or Z billions in 2012 due to the “discount” the Alberta oil production sold for compared to the price of West Texas Intermediate (WTI) or to the European Brent oil prices for the same period. Logical thought would disagree that the Alberta oil production was sold at a discount since it was sold at a price that willing buyers would agree to pay in a free market and that there were therefore no “foregone” profits at all in the market that existed during 2012.

If Canadian oil production can command a higher price if it was available for sale at US Gulf Coast ports, then that is a different market with different circumstances and is indeed a completely different set of facts as well as being a different question.
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nsdp
Champion Author San Antonio

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Message Posted: Feb 9, 2013 9:25:20 PM

http://us-code.vlex.com/vid/domestic-supplies-materials-equipment-19248030 prohibition on export of American crude. I believe this has been one of your pet laws Dr Pepper when discussing whether or not Keystone would export crude shipped to the gulf coast last July. By statute US refineries are "hired" to refine the crude for Venezuela, Brazil and Mexico among others.

DrPepper you are hoisted on your own petard. 42USC6212.

[Edited by: nsdp at 2/9/2013 9:29:33 PM EST]
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drpepperTX
Champion Author Texas

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Message Posted: Feb 9, 2013 12:09:56 PM

Watch out Cdnlynx, take every word nsdp says as the Gosoel truth, he's an ex attorney after all! ;^)
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CdnLynx
Champion Author Ontario

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Message Posted: Feb 9, 2013 1:13:16 AM

This is a little off topic of Cdn oil going east;

DrPepper and NDSP - The words Export and Import in these economic times really need clarification.
Venezuela export 40% of their crude to America in 2010 (eia pie graph)
EIA Analysis of Venezula (pie graph - part way down in article)

Compared to US export of refined gasoline (conventional), 1,004, hundred thousand barrels to Venezuela in 2011; there was only "1" hundred thousand barrels in 2010; suspect due to damaged refining capacity by Venezuela.
EIA Analysis - US exports of refined gasoline to Venezuela

When Venezuela exports crude to be refined in America, then the refined product is shipped back to Venezuela, is it really an quote/unquote American refined gasoline, or was it a case America was hired to process the crude of Venezuela due to damaged refining capacity by Venezuela?

[Edited by: CdnLynx at 2/9/2013 1:14:21 AM EST]
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CdnLynx
Champion Author Ontario

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Message Posted: Feb 9, 2013 12:52:04 AM

TXRanger09 - Like America, Canada is free enterprise and markets and Global oil companies are the movers and shakers. Refineries seem to be a hot potato, nobody wants to build, maintain, and many seems to change hands as companies continue to disinvest their refineries!
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TXRanger09
Champion Author Dallas

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Message Posted: Feb 8, 2013 11:46:33 PM

And the Canadians aren't building their own refineries because....?
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nsdp
Champion Author San Antonio

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Message Posted: Feb 8, 2013 11:28:57 PM

DrPepper if you really imagine that the US "BUYS" oil from Venezuela you need to think again.

"The United States now sells large volumes of oil to Venezuela, with
the country importing 1 million barrels of processed gasoline in December 2011 alone, which, added to the its purchases from the United States of crude oil and oil derivatives totaled 2.21 million of barrels."Source is Fox News of all places. http://latino.foxnews.com/latino/news/2012/08/24/venezuela-imports-oil-despite-having-huge-reserves/

What we do is bring in Venezuelan oil refine it and ship it back to them. We have a net export market of 1million barrels a day. So if you Really think that PDVSA is going to buy product made with Canadian crude instead of their own I will sell you the Huey P Long bridge in Louisiana and throw in a second Huey P Long Bridge for free. The refineries running Venezuelan Orinoco are owned in whole or part by PDVSA. Management would be fired immediately if they took Canadian crude instead of Venezuelan crude. What will happen is there is a 370,000 barrel per day refinery on St Croix 1/2 owned by PDVSA that would be reopened or Aruba(275,000 barrels a day) and we would lay off US refinery workers due to reduced throughput as we would lose the Caribbean market.

From yesterday's San Antonio Express News:

"Favela, the Hart Energy executive, said those advantages keep U.S. refineries, especially those with facilities along the Gulf, in a strong position to export to Mexico and South America.

Announced refinery expansions in Mexico, Brazil and elsewhere in Latin America have been delayed, he said. And although they likely will be completed at some point, the availability of low-cost imported gasoline and diesel from the U.S. makes additional delays easier for those countries to absorb, he said."

And you want to give away US refinery jobs? This is why we started exporting refined product in 2011; lower refining costs. Substitute Canadian oil for Venezuelan oil and we lose the market and the jobs because Venezuela sells gasoline for 8 cents a gallon for political reasons. They can do this because they discount their own oil instead of buying on the world market and can shift refining for the Caribbean market to St Croix or Aruba if we quit taking their oil.

So quit claiming we will displace Venezuelan crude. PDVSA will simply take that refining work away from us. Even if it were free, WCS cannot compete with Orinoco discounted by the Venezuelan government
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RBob
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Message Posted: Feb 8, 2013 9:05:55 PM

TransCanada has said on numerous occasions that the pipeline's purpose is to get oil where it can be exported, not used in either the US or Canada.
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jwkycola
All-Star Author Columbia

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Message Posted: Feb 8, 2013 8:04:52 PM

Ok.
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bmxstud
Veteran Author Chicago

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Message Posted: Feb 8, 2013 5:31:16 PM

bad news
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CocoPaz
Champion Author Santa Barbara

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Message Posted: Feb 8, 2013 3:54:36 PM

How is the current blizzard affecting this?

We are praying for the safe capture of the cop killer in Calif. Am I the only one who smells a movie deal out of this?
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drpepperTX
Champion Author Texas

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Message Posted: Feb 8, 2013 3:04:04 PM

November 2012, the US imported 1,032,000 barrels of oil per day from Venezuela.

Keystone XL could replace the heavy Venezuelan crude at a reduced price.

[Edited by: drpepperTX at 2/8/2013 3:05:34 PM EST]
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nsdp
Champion Author San Antonio

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Message Posted: Feb 8, 2013 3:01:44 PM

Every one disregards economics. Refiners don't care if it is pink, purple or polka dotted. It is how much does it cost in the refinery's tank farm. The increased flow of WTS and Midland to the Gulf coast has a lower price in the refinery terminal than Keystone or the Eastern Canada route with Tankerage will ever hope to have. WTS will always be able to underbid CWS in the Gulf coast and make money where CWS can't.
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humblepie
Champion Author Toledo

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Message Posted: Feb 8, 2013 2:50:25 PM

the world needs new pipelines everywhere
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Zuegma
Champion Author Nova Scotia

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Message Posted: Feb 8, 2013 2:49:44 PM

This is long overdue. Not only would it bring the oil 'directly' to the more populous Eastern Canada but also to the North East States which we already supply with a good portion of their gas demand (via a long circuitous route).

Who knows, we might get 2 new pipelines: one to Eastern Canada and one North via a more than will North West Territories for export. That would appease all the contrarian 'green' British Columbians (a la California) and would eliminate our bringing oil from Venezuela. They can keep their part time windmills and solar cells.
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gizbo123
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Message Posted: Feb 8, 2013 2:26:55 PM

Canada is a good friend. The dictator can stick it.
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drpepperTX
Champion Author Texas

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Message Posted: Feb 8, 2013 2:24:19 PM

Like water, Canadian crude will flow downhill. As Girling said in the interview. “Once you get on tidewater, you can get anywhere, and you don’t need a presidential permit to bring oil into the Gulf Coast.”
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darshanzala
All-Star Author Illinois

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Message Posted: Feb 8, 2013 2:19:43 PM

Nothing good... Gas prices still be high as many refineries in US are closed.
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Suzzoom
Champion Author Nevada

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Message Posted: Feb 8, 2013 2:19:39 PM

Plus, you get to keep all the jobs in Canada. Better for your economy.
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listerone
Champion Author Boston

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Message Posted: Feb 8, 2013 2:09:56 PM

Canada shouldn't assume that Osama Obama will approve the pipeline.Americans know that Osama doesn't give a rat's hindquarters about this country's well being while Canadians would have no way to know that.
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ss70
Champion Author Detroit

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Message Posted: Feb 8, 2013 1:49:38 PM

good for them ... may be good for east coast
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HorizonChaser
Champion Author Montgomery

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Message Posted: Feb 8, 2013 1:42:00 PM

yawn, eh
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NHLiveFree
Champion Author New Hampshire

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Message Posted: Feb 8, 2013 1:40:47 PM


Wishful thinking and pipe dreaming by Girling. TransCanaada's obvious preference and predeliction to send the Alberta caustic crude south to the Gulf Coast ports for shipment to China is a shame. He should be working to assure Canadians have enough fuel first at less than $1.50 or $1.60 per litre.
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whatif81
All-Star Author San Antonio

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Message Posted: Feb 8, 2013 1:38:51 PM

ok
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Nicoalbum
Champion Author Ottawa

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Message Posted: Feb 8, 2013 1:26:46 PM

The situation is aggravating, nothing can be done any time soon.
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