Valero Energy Corp. has secured a permit from the U.S. Commerce Department to ship crude oil from the Gulf Coast to its plant in Quebec as part of a plan to lower the cost of its feedstock.
Most of the crude will come from South Texas' Eagle Ford Shale and will displace the light, sweet crude that Valero now buys from Europe and Africa.
Shipping Eagle Ford oil from the Gulf Coast to Valero's 265,000-barrel-a-day plant near Quebec City will cost about $2 a barrel less than shipping crude across the Atlantic, Valero spokesman Bill Day said.
“The permit would bring additional Eagle Ford crude to Quebec, and there is a lot of Eagle Ford crude,” Day said.
Exporting crude from the United States is prohibited without a Commerce Department permit, Day said. That Valero got the OK “demonstrates the amount of domestic crude that's produced now.”
A call to the Commerce Department as to the total number of permits issued wasn't immediately returned.
Valero's one-year permit was valid starting in November, but the company hasn't made a major shipment to Quebec yet, Day said.
U.S. crude production gains have mostly come from the Bakken and Eagle Ford shale formations in North Dakota and South Texas, according to Energy Department data.
U.S. crude being shipped to Canada would displace light, sweet oil from West African nations such as Nigeria and Angola, Amrita Sen, chief oil market analyst for Energy Aspects Ltd. in London, told Bloomberg News.
“We're going to see more volumes shipped to Canada” from the Gulf Coast, Sen said.
Valero's refineries in Three Rivers, Houston, Corpus Christi and Meraux, La., now process Eagle Ford crude, Day said. Also, the company is shipping about 40,000 barrels a day of Bakken crude to its Memphis refinery by a circuitous route that takes it by rail to Louisiana and then via pipeline to Memphis.
“Even that is less expensive than buying imported crude,” Day said.
Valero also is considering shipping Bakken crude to its California plants, he said.
I can't put anything else to reference this or Yahoo won't publish this. I don't understand this. You be the judge. This all happened while we were worrying about the Fiscal Cliff. The president signed off on this as the article said. Is the Transcontinental Pipeline for bringing IN oil or taking OUT oil? Do we not need the "work" in the US? Isn't that what the TCP is all about? Makes no sense. You be the judge.
I have heard that it has been many years since a new refinery has been built in the USA. Seems there are too many restrictions. Shipping crude all over the World does not seem like the most economical solution.
I'm not entirely sure why this is confusing to you. The oil market is a global market. This is why the Keystone Pipeline wasn't expected to lower gas or oil prices in the US--because it makes it easier to export the oil. As it is now the oil has to be shipped by rail which is slower and more expensive to export compared to pipeline oil. The only question with the pipeline is whether the oil goes through the US for routing through Gulf terminals or through a Canadian pipeline to a new pacific coast terminal. But the oil is going to enter the global market--it will go wherever it fetches the highest price.
This is what capitalism is all about. If you want to live in a place where government controls resources to keep prices low for the people, you're barking up the wrong economic system.
I completely understand how the cost of a roll of toilet paper can affect AT&T,, but it is built into the expense account. But why does every person with a keyboard insist on posting stuff that affects all the businesses? I come to this board because I want to read about opinions of how AT&T is doing business compared to their competitors. So oils remarks need to be kept on the oil board, "MILK" remarks on the milk board,, & political remarks kept to yourself.!!!