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Wed, 2012-01-18 11:11Ben Jervey
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Keystone XL Pipeline Would Increase Oil Prices in Midwest

Twitter is ablaze with the news that the State Department will announce today that the original TransCanada presidential permit application is dead in the water. Details are murky, so stay tuned for more, but what this likely means is that the State Department will allow TransCanada to re-apply for the permit with a new route that avoids the heart of Nebraska's Ogallalla Aquifer.

While it's good to see that President Obama is standing up to oil industry bullying and Republican pressure to fast-track the permit, this still means Keystone XL is very much in play. If it's ever built, Keystone XL will allow the expansion of the Alberta tar sands that climate scientists worry will send us down a dangerous path of global warming pollution. 

What's more, the Keystone XL tar sands pipeline, if built, would increase oil prices in the American Midwest. That’s the shocking takeaway point from a bombshell report about Keystone XL as an export pipeline released today by the Natural Resources Defense Council and Oil Change International.

We’ve reported time and time again here on DeSmogBlog, the proposed Keystone XL tar sands pipeline would not improve America’s energy security, but never has that reality been more clearly conveyed than by this one real-world point that is worth repeating. The Keystone XL tar sands pipeline would increase oil prices in the Midwest.

To understand how, exactly, an increased supply of oil to America could increase oil prices domestically, you have to understand two things about the Keystone XL pipeline.

First, Keystone XL is is an export pipeline, funneling foreign crude through American soil to Gulf refineries that will profit most by processing the low-grade tar sands crude into diesel to sell to the booming international market.

Read more: Keystone XL Pipeline Would Increase Oil Prices in Midwest
Wed, 2011-11-09 06:00Ben Jervey
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Valero Positioning To Export Tar Sands Oil, Guarding Pot of Gold at End of Keystone XL Pipeline

In the heated Keystone XL debate, the Canadian company TransCanada, which is attempting to build the line, and the Koch brothers, who are throwing their considerable weight behind it in the interest of their Koch Industries’ subsidiaries, receive a lot of attention.
 

But there are other benefactors that are worth a closer look, as nobody stands to benefit as much in the longer term (if the Keystone XL pipeline is ever built) as the companies that operate the refineries on the Gulf Coast.

Let’s step back and review what the refineries actually do. The diluted tar sands bitumen (or “DilBit”) that would flow through Keystone XL is an ultra-acidic, highly viscous mess, that doesn’t at all resemble the refined petroleum products like diesel or gasoline or even jet fuel that are sold on the commercial markets. DilBit is, in the words of Keith Schneider, ”thick as peanut butter and more acidic, highly corrosive, and abrasive” than typical crude.

This tar sands DilBit needs to be refined before it can be sold. But only certain refineries are capable of handling the corrosive DilBit.

Refiners along the Texas Gulf Coast, where the Keystone XL pipeline would ultimately deliver tar sands DilBit from Canada, are eager to accomodate. The company that appears positioned to receive and refine more of TransCanada’s crude than anyone else is the Valero Energy Corporation (NYSE: VLO).

Read more: Valero Positioning To Export Tar Sands Oil, Guarding Pot of Gold at End of Keystone XL Pipeline
Fri, 2011-09-02 14:16Ben Jervey
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Reality Check: New Keystone XL Report Blows Up Steven Chu's "Energy Security" Claim

Earlier this week, in an interview with EnergyNow!, U.S. Energy Secretary Steven Chu hinted that the administration would likely approve the Keystone XL tar sands pipeline. The controversial pipeline, which would carry filthy diluted bitumen (or DilBit) crude 1,700 miles across six Great Plains states, 1,904 waterways, and the nation’s largest freshwater aquifer, needs State Department approval to cross the international border. Opposition to the pipeline is fierce -- over the past two weeks over 1,000 activists have been arrested at the White House in a massive act of civil disobedience -- as environmentalists, Great Plains landowners, scientists, and public health activists alike warn of the inevitable oil spills and immense carbon pollution that would result from Keystone XL’s construction.
 
Proponents of the pipeline have been pushing the claim that building this pipeline will improve our energy security and reduce our dependence on oil from Venezuela and the Middle East. Companies like TransCanada, the Canadian energy company hoping to build the pipeline, and Valero, the Texas-based refinery company that stands to profit the most from the DilBit crude that it would deliver -- have been more than happy to help perpetuate that myth, even if their internal discussions and the economics of the oil industry don’t back it up.  

Unfortunately, Secretary Chu’s interview on Wednesday revealed that the administration is going to use this false claim as political cover if (or, more realistically, when) they approve the construction of Keystone XL. Here’s the interview:
Read more: Reality Check: New Keystone XL Report Blows Up Steven Chu's "Energy Security" Claim
Tue, 2010-11-02 12:47Emma Pullman
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Largest Donor to Prop 23 Valero Has Ties to the Tar Sands Too

As Americans head to the polls today, many are aware of the Big Oil and special interest bankrolling of efforts like California's Prop 23 which would help derail progress toward the clean energy future.  Aside from Kochtopus and Tesoro funding, the biggest funder of Prop 23 is Valero, a Texas oil company keen to avoid the domino effect of clean energy legislation.  They have already contributed more than $5 million to support it, and it's no wonder: They fear that climate legislation will hurt profits at their two California refineries.

The Tyee reports that Valero has ties to the tar sands in Alberta where California laws may one day lead to limits on Valero's prospects for future growth - which depend a great deal on Alberta's tar sands.  

Why would a Texas oil company care about California clean energy laws?  The Texas oil company owns several Alberta area refineries.  Bill Day, a Valero spokesperson, calls Canada “a tremendous potential supplier for us.”

They're eyeing up the tar sands because over the coming decades, the proposed Alberta-Texas pipeline would ship massive amounts of Albertan fossil fuels to Gulf Coast refineries.   The highly controversial Keystone XL pipeline stretched from Alberta could eventually ship up to 600,000 barrels of oil per day to Texas and Louisiana.  As they noted in their most recent annual report, "This large new source of crude oil for the Gulf Coast market will further diversify our feedstock slate and increase our ability to optimize our profitability".

Read more: Largest Donor to Prop 23 Valero Has Ties to the Tar Sands Too
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