Where Would Refined Keystone XL Crude Go?

The White House is expected to decide later this year whether to approve construction of the Keystone XL pipeline — connecting the Alberta oil sands to Port Arthur and Houston. Opponents of the pipeline are raising questions about just how much it would do to improve U.S. energy security.

Refineries on the Texas Gulf Coast are already structured to take heavy, sour crude — a grade with a high content of sulfur and carbon dioxide. Most such crude is now imported from Mexico or Venezuela.  But oil production in both countries is in decline, due to chronic underinvestment.  Supporters of the Keystone XL pipeline argue it would guarantee Texas refineries a steady supply from Canada.

Deborah Gordon is with the Carnegie Endowment for International Peace. She says little of the oil coming down the pipeline would go to meet U.S. energy needs.

“These extra heavy oils make a lot heavier slate of product. They’re making products like diesel fuel, and bunker fuel for marine vessels, and pet coke — it’s a replacement for coal which is really heavy and really dirty, and it’s actually dirtier than coal. These products are largely going to be exported.”

Gordon says the main market for pet coke would be Asia.

 

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...