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It’s important for us to address inaccurate and misleading claims that continue to be made regarding Keystone XL and the issue of exports. We’ve addressed the issue of crude oil exports in a previous post. This post deals specifically with the exports of refined products.
Will refined products from Keystone XL be exported?
It should be noted that Keystone XL transports crude oil, not refined products. TransCanada is an energy infrastructure company. We build energy infrastructure like pipelines, natural gas-fired power plants and wind farms. We don’t actually extract or own a single molecule of oil or natural gas that we transport. We are contracted to build the infrastructure to safely deliver those molecules to their destination. We don’t own the oil we transport, much like a moving company doesn’t own your bed during a move.
With that being said, we can provide insight into what happens to those products when they are refined.
Crude oil is not exclusively used to produce gasoline
Crude oil is used to produce thousands of products that we use every day, not just gasoline and diesel. Crude oil feedstock is used to create the plastics that encase our cell phones and televisions, asphalt for our roads and even the latex gloves doctors use when delivering a baby. The people suggesting that the oil Keystone XL will transport will be used to exclusively to make gasoline or diesel is simply a guess and they know that.
The United States consumes the vast majority of its refined products
The claim that “much of this oil is for export” is actually contrary to the facts, market analysis and what actual refiners and customers of Keystone XL have said. The fact is the U.S. consumes the vast majority of all the refined products it produces. In 2012, only about 9% of U.S. refined on-road motor fuel was exported – the other 91 per cent was consumed in the United States first.
State Department’s finds Keystone XL won’t impact export trends
The State Department’s market analysis in Keystone XL’s final supplemental environmental impact statement states, “U.S. product exports are not sensitive to different scenarios of pipeline development.” Essentially saying that exports occur (and have occurred for more than 20 years) with or without Keystone XL and the project would not impact those those trends.
What do our customers say?
Bill Day, spokesperson for oil refining company Valero, has told media that the export allegations are, “completely wrong” and that “Over the past several quarters, Valero has exported less than 10 per cent of the gasoline it makes. The vast majority of what we make in the U.S. stays in the U.S.”
We also know that tens of thousands of jobs are tied to refining and creating the products we need and use every day. Supporting the domestic refining industry with more domestic oil at lower prices keeps the industry competitive, protects jobs and supports its growth.
Isn’t the U.S. using less gasoline?
The fact that the U.S. is using less gasoline is technically true however that statement without context is a bit misleading. According to the U.S. Energy Information Agency, in 2012, about 133 billion gallons (or 3.18 billion barrels) of gasoline were consumed in the United States, a daily average of about 365.65 million gallons (or 8.71 million barrels). This was about 6% less than the record high of about 142.35 billion gallons (or 3.39 billion barrels) consumed in 2007.
The United States still uses a lot of gasoline, diesel and aviation fuels. That is not going to change overnight. What can change overnight is where the U.S. sources the crude oil to create the products that we use every day. Keystone XL is as shovel-ready as projects get. Within months of a Presidential Permit, 9,000 men and women in the United States can begin working on a project that will bring lower-cost North American crude oil to U.S. refineries, reducing reliance on conflict oil from Venezuela and the Middle East and enhancing energy security.
MYTH: “Landowners are responsible and liable in the event of an oil spill.”
Fact: TransCanada is 100 per cent responsible for responding, cleaning and restoring the site in the unlikely event of a pipeline leak.
It’s our responsibility – as a good company and under law. If anything happens on the Keystone XL Pipeline, rapid response is key. That’s why our Emergency Response plans are approved by state
and federal agencies, and why we practice them regularly. We conduct regular emergency exercises, and aerial surveys every two weeks. We’re ready to respond with a highly-trained response team standing by. At TransCanada, we continually look at ways to improve our system. Since 2011, TransCanada has invested an average of about $900 million per year in its pipeline integrity and maintenance programs.
To learn more about landowner relations and Keystone XL check out these posts from our microsite:
MYTH: “Keystone XL is an export pipeline to China.”
Fact: Not a drop of crude oil will be exported.
The Keystone XL Pipeline is not a crude oil export pipeline — period. It is a supply line to U.S. Gulf Coast refineries — which have signed up to 20-year binding commercial contracts to receive oil through Keystone XL. This much-needed oil will allow refineries to create products that we all rely on every day — gasoline for our vehicles, aviation fuels, and diesel fuels to help transport goods throughout the continent. It makes absolutely no sense for companies to purchase cheaper Canadian crude, and then pay (again) to ship that product overseas, while continuing to import higher-priced oil from the Middle East and Venezuela. The U.S. is an overwhelming net importer of crude oil. The International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA) have both forecast the U.S. will still need to import oil to meet its domestic demand for decades, despite growing oil production in the U.S. U.S. and Canadian production tranposrted by will displace more expensive crude oils from less stable countries.
To learn more about energy security and Keystone XL check out these posts from our blog:
MYTH: “Keystone XL will provide little economic benefit in the United States.”
Fact: The Keystone XL Pipeline project will support the creation of 9,000 construction jobs in the United States – work for pipefitters, welders, electricians, heavy equipment operators and many more.
The Department of State noted in the DEIS that Keystone XL will contribute to America’s long-term energy security,support tens of thousands of jobs, and provide billions in private sector investment, earnings and taxes.
The DEIS report states:
- Construction of the proposed project would contribute approximately $3.4 billion to U.S. GDP if implemented.
- A total of 42,100 jobs throughout the United States would be supported by construction of the proposed project.
- Total employment earnings supported by the proposed project would be approximately $2.053 billion.
The first Keystone Pipeline directly employed 8,969 workers, the recently completed Gulf Coast Pipeline directly employed 4,844, Keystone XL will put 9,000 more U.S. laborers to work on this much needed critical energy infrastructure project. To learn more about jobs and economic benefits and Keystone XL check out these posts from our blog:
MYTH: “Keystone XL will not be a safe pipeline.”
Fact: Keystone XL will be the safest pipeline ever constructed in the United States.
Keystone XL will use satellite technology to monitor 20,000 data points on the pipeline’s operating conditions. TransCanada has also voluntarily agreed to 57 new safety procedures to provide even greater confidence regarding the operating and monitoring of Keystone XL. This includes a higher number of remotely controlled shut-off valves, increased pipeline inspections and burying the pipe deeper in the ground. The Department of State, Draft Environmental Impact Statement (DEIS – March, 2013) for Keystone XL concluded, “the incorporation of 57 special conditions would result in a project that would have a degree of safety over any other typically constructed domestic oil pipeline system
under the current code”.
To learn more about pipeline safety and Keystone XL check out these posts from our blog:
MYTH: “Keystone XL means game over for the climate.”
Fact: Keystone XL is an environmentally responsible project.
The tagline on which Keystone XL’s professional activist opposition has campaigned has no scientific merit. In fact, some of the world’s most prominent climate scientists agree that claim is nothing more than sensationalist hyperbole. David Keith, a climate scientist at Harvard University called, “The extreme statements — that this is ‘game over’ for the planet — are clearly not intellectually true”. Ken Caldeira, a climate researcher at the Carnegie Institution for Science in Stanford, California, says “I don’t believe that whether the pipeline is built or not will have any detectable climate effect”. David Victor, a climate-policy expert at the University of California, San Diego, “As a serious strategy for dealing with climate, blocking Keystone is a waste of time”.
In addition, two of Canada’s most respected climate scientists – Andrew Weaver and Neil Swart of the University of Victoria – published research in the British scientific journal ‘Nature Climate Change’. They confirmed the climate impact of producing the oil sands is nowhere near a ‘doomsday scenario’. The research found that even if every single barrel of the oil sands is produced (a near impossible feat), it would result in a cumulative global warming impact of 0.6 degrees Fahrenheit. Similarly, a study by energy research group IHS CERA found that Keystone XL “will have no material impact on U.S. GHGs.”
Keystone XL is a choice between construction of a pipeline that supports the creation of 40,000 American jobs and reduces America’s dependence on Venezuelan and Middle Eastern crude oil versus continuing to import oil from countries that do not share American values.
Read more about Keystone XL and the environment on our blog:
New independent report and prominent climate scientists agree: Keystone XL meets President Obama’s climate standard
Keystone XL will not ‘significantly exacerbate climate change’
Why Keystone XL is the right choice for the environment
MYTH: “Keystone XL will only create 35 jobs.”
FACT: Keystone XL will create thousands of jobs.
The claim that Keystone XL will create “35 jobs” is entirely without merit. Our U.S. oil pipeline system supports the creation of over 20,000 jobs in the U.S. – 13,000 construction jobs (9,000 KXL, 4,000 Gulf Coast Project) – work for pipefitters, welders, electricians, heavy equipment operators and more. And 7,000 manufacturing jobs – from the pipe being manufactured in Arkansas, pump motors made in Ohio and transformers built in Pennsylvania, workers in almost every state in the U.S. would benefit. TransCanada has signed binding Project Labor Agreements (PLAs) with all major building trades unions which guarantee TransCanada will have the best and most talented laborers constructing this vital infrastructure project.
The State Department’s own review found that Keystone XL will generate just over 42,000 jobs both directly (employed on the project itself) and induced (as result of the economic stimulus the project will generate). We can demonstrate down to the single job, how many employees we require to build our pipelines.
MYTH: Oil sands crude is more corrosive than conventional crude oil.
This myth, invented by oil sands opposition groups without any evidence has been debunked by some of the world’s leading and most respected scientific research organizations including the National Academy of Sciences, Natural Resources Canada , Battelle Memorial, Penspen Institute and Alberta Innovates at the University of Calgary.
Each one of these studies found:
- No evidence of causes of pipeline failure unique to the transportation of diluted bitumen
- No evidence of chemical or physical properties of diluted bitumen that are outside the range of other crude oils
- No evidence that any aspects of the transportation of diluted bitumen by transmission pipeline would cause releases more likely than the transportation of other crude oils
- The dilution process needed to help these heavy oils flow yield a stable and fully mixed product for shipping by pipeline with density and viscosity levels in the range of other crude oils transported by pipeline in the United States
- No evidence of unique or extreme properties that make diluted bitumen shipments more likely to cause internal corrosion or erosion
The fact is oil sands crude is very well understood by scientists and engineers and has been shipped safely through pipelines for nearly 50 years. Every batch of crude oil entering TransCanada’s Keystone Pipeline is tested to ensure it meets strict specifications before being transported to the United States.
Read more about diluted bitumen, oil sands and Keystone XL on our blog:
Shipper Application and Accounting
Visit the Keystone Shipper Information page on TransCanada.com