Yesterday marked the fifth anniversary of TransCanada's application to the U.S. State Department for the 1,700-mile pipeline from Alberta to Texas known as the Keystone pipeline. Keystone of course even though it has not been built has become the most famous pipeline in America. Not because of what it was but what it stood for. The Keystone pipeline became the dividing line that pitted environmentalists against the oil industry. Now after five years with the plan on the drawing room table, who has won and who is lost.
The answer is no one. The pipeline has twice been blocked by the Obama administration. The President at fist blamed the fact that the pipeline went over the Sand Hills and the Ogallala Aquifer. Later it became clear it was about oil sands production and its emissions of greenhouse gasses. Keystone has now just become a political quagmire. Both sides have lost after five years! Keystone is a perfect example of politics ahead of common sense. This was more about making political points on both sides than about the pipeline and the oil. Whether the pipeline is approved or not the oil will be produced. U.S. refiners prepared to refine that crude. We will lose jobs and revenue.
Environmentalists lose because the oil will be produced and it will move in more risky ways. By rail etc. rating more on the environment. We lose jobs, tax revenue and prestige.
Oil slips (NYMEX:CLX13) as Libya increases production. We are also seeing reduced risk premium as Syria negotiations continue and Iran's new president reaches out.
Bloomberg is reporting that Valero Energy Corp.'s Memphis refinery plans to shut production units in March for six weeks of scheduled work, a person familiar with operations said. About half of the refinery will be idled, said the person, who asked not to be named because the information is not public. The units scheduled for work include the fluid catalytic cracker, one of the refinery's two crude units and a sulfur unit. An alkylation unit will also be shut, the person said. Bill Day, a spokesman for the company in San Antonio, declined to comment. The refiner typically announces turnaround plans in an e-mailed statement shortly before its quarterly conference calls. Valero plans to release third-quarter results on Oct. 30. The 195,000-barrel-a-day plant runs primarily light and sweet crude oil delivered by the Capline pipeline, according to Valero's website. Capline runs from St. James, Louisiana, to Patoka, Illinois.