The Keystone pipeline transports Canadian synthetic crude "Syncrude" and oil sands products known as "heavy crude" to American refineries in Houston and Port Arthur, Texas. Why there, one might ask. Well, in the 1990-2010 time frame, refineries were built to handle the least expensive raw material they could buy, which was heavy crude. Most of these heavy crude refineries were built in the Port Arthur-Houston area of Texas, to make use of the ocean ports, allowing shipments from Venezuela, Russia, and Canada; although Canada was at a cost disadvantage vs Venezuela. Bear in mind the "nationalization" of all oil exploration, production, refinement, and distribution by Venezuela was completed by 1976; it's US and European refineries were, and still are, under the name "Citgo." As Venezuelan production and exportation began to falter in the late 1980s, the refineries were looking for more heavy crude to produce; although it costs more to process, the construction of additional refineries to handle the light sweet crude produced by most American wells was considered prohibitively expensive at the time. Processes were developed that allowed the mixing of the two different crudes at one point in the refining process, which had the desired effect (at least to the oil companies) of increasing the use of both types, reducing overall cost of finished product, and avoiding the construction of new refineries.
But now the search was on for more heavy crude. The oil sand products became "of interest," and Canada had the most developed and available oil sand products, and a reasonable prices.
Enter the Keystone Pipeline, by TC Energy and the Government of Alberta. Long story (or pipeline) short: it is a 2,972 mile pipeline consisting of 2,147 miles of 30" pipeline buried at least 4' deep, and the remaining 825 miles is 36" pipeline, again buried at least 4' deep. The pipeline construction began in 2008, and delivered its first oil to refineries in Patoka, Illinois in 2010, and to Cushing Oklahoma tank farms in 2011; it reached Port Arthur in 2014, and Houston in 2016. As constructed, it can deliver 590,000 barrels of oil per day to the refineries; as a point of comparison, the United States consumed 18,684,483 barrels of oil per day in 2021. (Incidentally, that is higher than any other nation on Earth. China is second, with 15,442,094.)
The United States exported 11,324,000 barrels of oil per day in July 2022.
So, what was Keystone XL? Keystone XL was a replacement pipeline proposed by TC Energy and the Government of Alberta. It would have replaced the existing pipeline from Hardesty, Alberta to Steele City, Nebraska with a 36" pipeline, increasing total capacity to 700,000 barrels per day, a net increase of 110,000 barrels per day. In theory, American Light Sweet Crude from the Bakken formation would have been mixed in at Baker, Montana; however, the technology for this was not fully developed at the time. Due to Native American activism, politics, and environmental activism, the Keystone XL pipeline was cancelled before construction was begun.
While doing research for this article, I came upon some interesting facts I'd like to share with you. These figures are from 2021, the last full-year figures available.
Canada is still the United States largest foreign oil supplier, at 3,800,000 barrels per day. (51% of our crude oil imports.) Mexico and Russia tie at 8% each of our imports, Saudi Arabia is 5%, and Columbia is 2% of our total imports. Venezuela did not even make it to 1% in 2021. It's interesting to me why OPEC, from whom we procure very little oil, has such an overstated effect on American energy prices.
All data in this article was complied from the U.S. Energy Information Administration articles and bulletins.
Thanks for reading, as always your comments are welcome! Just click the word "comments" in the white box below.
R.M. "Bob" Hartman