It is also not just about volumes of oil and moving it around, its about the quality of the oil and where it can be refined most efficiently.
Valero is already on record of pulling their support for just the southern section of the XL pipeline because they don't want sweet crude. They only want the cheap heavy/sour crudes because this is what they are set up to run most efficiently. Having access to WTI isn't always a no-brainer.
HFC is set up to run their preferred crude inputs and is in prime locations for access these feedstocks at the cheapest price.
For some reason, people say nothing about all the additional pipelines / expansions that will feed Cushings. A quick google search pulls up all of the following in a bout 5 minutes of looking:
Kinder Morgan - Additional 210k/d Plains All-American - 175k/d Enbridge Flanagan South - 600k/d Plains American (from West Texas) - 50k/d XL Pipeline Northern Section - ??
The truth is that the WTI/Brent spread will narrow, but with the established tariffs on the pipelines from Cushings going south, HFC will have access to the cheapest crude available to almost any refinery.
The current HFC cash windfall will most likely decreased, but if you look at current PE ratios its not even baked in at the current price. Its amazing that people forget that these refineries were exptremely profitable when WTI was actually at a premium to Brent.
I know i'm right about all of this, but the market doesn't seem to care.
Production of new crude oil in all the producing basins in the mid-continent will grow at a much greater rate than the capacity of pipeline takeaway ability for many years to come. This shouldn’t be a big issue for us.