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Author Topic: Analysis: Spills flame Canadian oil debate, but won't curb flows to U.S Back to Topics

Champion Author

Joined:Sep 2009
Message Posted: Apr 3, 2013 10:56:38 AM

By Jeffrey Jones

CALGARY, Alberta (Reuters) - Two high-profile oil spills won't stem the now-record flow of Canadian oil into the United States, despite the frenzy that the spills triggered among friends and foes of the Keystone XL pipeline to the main U.S. refineries.

The fate of Keystone remains undecided, yet Canadian crude will become an increasing part of the U.S. energy mix, despite growing competition from new U.S. production.

Visit Reuters for full article
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Champion Author Oklahoma City

Joined:Mar 2008
Message Posted: Apr 3, 2013 11:36:16 PM

Stand together and demand Canadian bitumen is refined in Canada, shipped to their East and West coasts for transport. NOT in the US.
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Champion Author San Antonio

Joined:Sep 2011
Message Posted: Apr 3, 2013 10:40:45 PM

Build the pipeline and tell OPEC to go pound sand and drill baby drill in all of America.
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Champion Author British Columbia

Joined:Sep 2011
Message Posted: Apr 3, 2013 3:55:07 PM

If people didn't have to drive you wouldn't need pipelines. We just need better controls that identify volume loss and shut off points preferable through wireless technology.

That would allow producers to instantly shut down pipelines that had burst by minimizing the impact.
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Champion Author Texas

Joined:Apr 2011
Message Posted: Apr 3, 2013 1:53:56 PM

But the liberal press will continue to leave out an important fact about tgese spills. And that is for decades, industry has shipped diluted bitumen in pipelines safely, and in that time not one internal corrosion-related leak from a pipeline carrying dilbit has been documented in the United States. Which makes sense considering that pipeline operators aren’t likely to put anything in their lines that will harm their investment.
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Champion Author San Antonio

Joined:Jun 2012
Message Posted: Apr 3, 2013 12:58:56 PM

Total economics not spills and not politics will decide if Keystone XL gets built. Valero voted with their feet first week of March by taking $900 million set aside for a 15% share in Keystone and buying rail cars and building rail terminals. That now leaves Keystone 50% short of their required financing to build the northern segment. The 35% shortage of funds was going to be difficult; 50% is just short of impossible. Also as coal shipments drop, BNSF and UP are now competing to get unit oil trains. This has wiped out 90% of the price advantage Keystone would have had and rail transport takes 1/10th the time of pipeline shipments. This results in a major drop in inventory costs and property taxes at the end of the year. Inventory costs and taxes make rail at coal train prices a breakeven with Keystone. Refineries can supply diesel in kind and control shipping fuel costs. They cannot do that with the electric pump stations on Keystone.

As to tar sands competitive position, as more sour crude becomes available in the Permian Basin and in the MARS area off shore Louisiana, Canadian oil is going to be squeezed out. ARAMCO imports 1,000,000 barrels a day and owns 50% of Shell Motiva and Exxon Baytown so that will not be displaced. All Mexican Maya, PDVSA Orinoco, and Brazilian heavy are refined and shipped back to the home countries at a profit 15 cents per gallon better than sales in the US have. Production and consumption based on markets in 2007 have had a major change. US production is up 30% and US gasoline usage is off 17%.
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Champion Author Phoenix

Joined:Nov 2011
Message Posted: Apr 3, 2013 12:09:52 PM

in 1880 John D Rock e feller poured gasoline in the river because there was no use for it. Twenty years of spillin and then he was rich.
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Champion Author Santa Barbara

Joined:Jun 2012
Message Posted: Apr 3, 2013 11:45:11 AM

evowner: well written

Today I am praying for the fast recovery of the Louisville basketball player who broke his leg.
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Champion Author Salem

Joined:May 2012
Message Posted: Apr 3, 2013 11:42:39 AM

It's a political decision rather than economic. The economics of the pipeline for a low value product is questionable. Plus this low value per ton product has a higher risk factor because the clean up is harder and cost to move the product in the pipeline requires higher pressure.
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Champion Author Lexington

Joined:Feb 2013
Message Posted: Apr 3, 2013 11:34:40 AM

As long as there is a demand for oil you will have pipe lines and oil spills to go along. Devils advocate.
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Veteran Author Vancouver

Joined:Feb 2012
Message Posted: Apr 3, 2013 11:24:38 AM

There already is a downward pressure on Canadian Crude prices. That is why the government wants pipelines to the coast to ship to Asia. They need the tax revenues and royalties to pay for all the social programs.
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Champion Author Oklahoma City

Joined:Jan 2013
Message Posted: Apr 3, 2013 11:02:16 AM

Abundent supply will cause a downward pressure on prices
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