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Oil diplomacy

May 30, 2014

A major new natural gas contract will do more than keep tens of millions of Chinese warm. It also will thaw relations between their government and Russia. Meanwhile, U.S....

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JReader

Jun-05-14 9:51 AM

Let's see, just who is the largest consumer of oil world-wide... ? Oh yeah, it's the U.S. Makes so much more sense to send it over seas when Canada's biggest customer is next door.

To top it off, we are talking about a marginal at best the impact that the keystone pipeline would bring to the current supply to our domestic production.

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Auntydem

Jun-04-14 2:59 PM

The largest refinery set to receive Keystone oil is Motavia, which may be in America, but is owned by the Saudi state and Dutch Shell. Also to receive Keystone oil is US company Valero. Valero’s intent is to refine it as diesel fuel, which gets a higher price on the global market than it does in the US – which explains the quote from the permit application about reducing “oversupply” leading to higher prices for the Midwest. Since Port Arthur TX is within a Foreign Trade Zone, the company can export tax-free. TransCanada’s CEO says not a drop of Keystone oil will be exported because it wouldn’t make sense, but in April Valero was granted a US permit to re-export tar sand oil imported from Canada. Hard to believe no oil from Keystone would be exported.

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JReader

Jun-03-14 9:26 AM

MCW,

The oil is to go to American refineries. They will turn most of it into gasoline. They will then sell the gasoline to the highest bidder. That is no different than it is today. Tell me this: The keystone pipeline would supply about 4% of America's daily need for oil. How much is a mere 4% going to impact the domestic market ? Ask any expert and they will say little to none. You can keep beating this drum that it will increase costs in the Midwest but it simply isn't true.

Any time you move oil there are going to be risks. We already move a lot of oil by pipeline why would another 823,000 barrels a day amount to such a greater amount of risk for us ?

Is Bill Clinton wrong for supporting the keystone project ?

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middleclassworker

Jun-03-14 12:44 AM

Wrong. This pipeline has nothing to do with benefiting Americans. It is all about making money for oil companies and the Koch brothers. Tell me how moving oil (and eventually leaking it into our aquifers) across our nation to be refined and then loaded onto ships to be brought to South America and China will do anything for our nation? In fact, prices at the pump ate supposed to go up in Minnesota if this ever gets built. Why doesn't Canada run it across their land to their coasts and ruin their own environment?

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JReader

Jun-02-14 10:05 AM

Aunty:

That argument has never made sense. The reason to build keystone is to bring the Canadian oil to American refineries. The American refineries are free to sell their refined products to whomever they wish (including us Americans). If American refineries have access to a greater supply of crude oil how will this in turn increase prices assuming there is no increased demand for gasoline in the U.S. markets ? Whether you like to admit it or not Midwest gas prices are already influenced by the world oil market. Just think every time there is political unrest in a large oil producing country how the prices spike locally. To think we are somehow insulated here because of discounted Canadian oil is a myth.

This argument has always just been political in nature and has no basis in economics.

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Auntydem

May-30-14 1:30 PM

The pipeline's purpose is was always has been to bring Canadian oil to American refineries for export to overseas markets, not for use here. TransCanada’s permit application says the pipeline is "expected to strengthen Canadian crude oil pricing in [US Midwest] by removing this oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude. The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of US $2 billion to US $3.9 billion.” Analysis of these figures determined this would increase per-gallon prices by 20 cents/gallon in the Midwest.

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