A new report published by policy alternatives group Oil Change International indicates most of the oil to be shipped via TransCanada’s Keystone XL pipeline will be exported to Europe or Latin America.
Supporters of TransCanada’s Keystone XL have argued that the $7-billion pipeline, which would transport crude oil from Alberta’s oilsands to refineries on the Gulf Coast of Texas, is necessary for “energy security” in the U.S.
TransCanada spokesperson Robert Jones raised the question on August 25, 2011, asking the US whether “they want to import oil from Canada or get conflict oil from OPEC nations.”
But the report by Oil Change, which focuses on the main customers for the shipped oil, claims such a question is misleading the American public.
“The construction of Keystone XL will not lessen U.S. dependence on foreign oil—rather, it will feed the growing trend of exporting refined products out of the United States, thereby doing nothing to enhance energy security or to stabilize oil prices or gasoline prices at the pump,” the report concludes.
Of the six companies who have signed confidential long-term contracts with TransCanada, Valero accounts for 20 per cent of the pipeline’s capacity. According to the report, Valero explicitly detailed an export strategy for its investors on August 9, 2011 that would see most of the crude converted into diesel for the European market and gasoline for Latin America.
“The idea that Keystone XL enhances U.S. energy security is undermined by Valero’s business model that seeks to export products made with imported oil while further importing gasoline from a third country,” the report reads.
It also notes that Valero’s Port Arthur refinery on the Gulf Coast resides within a Foreign Trade Zone, meaning it will avoid paying tax.
TransCanada has disputed the report’s claims, however.
“There are some basic realities that they either ignore or they’re not willing to acknowledge,” TransCanada spokesman Shawn Howard told the Great Falls Tribune. “The U.S. consumes 15 million barrels of oil per day. The U.S. imports between 10 and 11 million barrels per day. There’s not enough oil produced in the U.S. to meet existing needs.”
He accused Oil Change of “fear-mongering” with misinformation.
Public hearings on the pipeline project are still taking place in the U.S., with the final decision to be made by President Barack Obama before the end of the year.
Two weeks of civil disobedience actions were recently held against the pipeline where protesters held sit-ins in front of the White House.