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.