No Benefits for US

Oil for Export -- Increasing Domestic Costs $2 to $3.9 Billion

Exporting Gas and Oil

Enterprise Products Partners announced May 30, 2013, that it will begin exporting gasoline, deisel, and other products from its Houston docks in early 2014. Read the complete announcement on the Enterprise site.
rising oil price graphic from Shutterstock
Tar sands oil does not enhance energy security simply because it comes from a friendly neighbor. Continued reliance on oil empowers ALL major oil exporters. The recent debate over tar sands has obscured the fact that Canadian oil is being moved to the Gulf Coast primarily for export.[1]

Dilbit would increase the price for Canadian crude by $2 to $3.9 billion per year.

When analyzing the movement of Dilbit crude from Canada to the Gulf coast:

  • The cost of production adds $50 more a barrel than conventional foreign imports.[2]
  • The cost of pipeline construction, due to distance, is four times greater than transporting Dilbit to the Pacific West. When this distance is expressed as pipeline dollars in cost per barrel, the price per barrel is $8-$10 less if the Pacific West coast destination was used.[3]
  • Dilbit will increase midwest oil prices as it will divert oil destined for that region and be sent to the Gulf coast, in turn reducing U.S. oil supply and increasing prices.[4]
  • Tar sand oil would increase the price the U.S. market pays for Canadian crude by between $2 billion and $3.9 billion a year.[5]

Immediately after the White House rejected TransCanada’s application for Keystone XL, crude oil futures fell by $.75. When Enbridge announced its plan for Seaway, U.S. crude jumped by over $3.00 a barrel. Meanwhile Brent crude, the world market’s oil benchmark, declined by over $0.30 a barrel.[6]

Enbridge and Keystone are simply using these export pipelines as part of a larger strategy to redirect oil for international buyers willing to pay a higher price for oil, adding billions of dollars to the annual cost for U.S. consumers. Conveniently, many of the Gulf coast refineries are also in Foreign Trade Zones where they can export refined products without having to pay U.S. taxes.[7]
 
 
 
 


1.^Keystone_Energy_Security_report_summary.pdf, January 2012, National Resource Defense Council, Oil Change International http://www.nrdc.org/energy/files/execsum.pdf

2.^"Keystone XL Pipe Isn't Best Option", Costwise, MCT Forum, William Edwards, Austin-American Statesman, Jan. 23, 2012 [Originally published as "Economic flaws fill pipeline plan", William Edwards, Omaha World-Herald, Jan. 20, 2012 http://www.omaha.com/article/20120120/NEWS0802/701209982]

3.^"Keystone XL Pipe Isn't Best Option", Costwise, MCT Forum, William Edwards, Austin-American Statesman, Jan. 23, 2012 [Originally published as: "Economic flaws fill pipeline plan", William Edwards, Omaha World-Herald, Jan. 20, 2012 http://www.omaha.com/article/20120120/NEWS0802/701209982]

4.^Keystone_Energy_Security_report_summary.pdf, January 2012, National Resource Defense Council, Oil Change International http://www.nrdc.org/energy/files/execsum.pdf

5.^Keystone_Energy_Security_report_summary.pdf, January 2012, National Resource Defense Council, Oil Change International http://www.nrdc.org/energy/files/execsum.pdf

6.^Keystone_Energy_Security_report_summary.pdf, January 2012, National Resource Defense Council, Oil Change International http://www.nrdc.org/energy/files/execsum.pdf

7.^Keystone_Energy_Security_report_summary.pdf, January 2012, National Resource Defense Council, Oil Change International http://www.nrdc.org/energy/files/execsum.pdf