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Exxon Mobil Corporation Message Board

  • bluecheese4u bluecheese4u Sep 4, 2013 9:24 AM Flag

    U.S. Refiners Don't Care if Keystone Gets Built

    U.S. Refiners Don't Care if Keystone Gets Built

    Railroads and Rival Pipeline Firms Are Making the Keystone Pipeline Less Necessary.

    September 3, 2013, 6:57 p.m. ET

    By BEN LEFEBVRE
    CONNECT

    U.S. companies that refine oil increasingly doubt that the controversial Keystone XL pipeline expansion will ever be built, and now they don't particularly care.

    Railroads are carrying soaring amounts of crude from Canada down to refineries along the U.S. Gulf Coast, reducing the need for the TransCanada Corp. TRP.T -0.74% project, which is still awaiting approval from the U.S. government after two years of delays.

    Meanwhile, a rival pipeline company, Enbridge Inc., ENB.T -0.90% is expanding existing pipes to carry Canadian crude south—and it doesn't need federal permission because it's using existing pipeline rights of way. In addition, so much oil is sloshing around the U.S. from its own wells that refiners don't need lots more heavy crude from the north to keep busy.

    "Keystone XL has been back-burnered for so long that any relevant parties have been able to make plans as though the project never even existed in the first place," says Sam Margolin, an analyst at Cowen & Co.

    TransCanada designed the proposed conduit to ship 830,000 barrels a day of heavy crude from western Canada, as well as lighter-grade oil from North Dakota shale fields, to the U.S. refining complex along the Gulf of Mexico.

    The cross-border Keystone project, billed as a way to reduce heavy oil imports from Venezuela and Mexico, requires a permit from the U.S. State Department.

    Concerns about the pipeline's possible environmental impact and legal skirmishes over the company's use of eminent domain to acquire land along the pipeline's proposed route have also bogged down the project.

    TransCanada says that the case for building Keystone XL remains strong and that it hopes the U.S. State Department will decide whether to grant the construction permits by the end of this year .

    But refiners are movin

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