The Bucknuts Hot Spot

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ng164300 said...

Right now there are not enough oil pipelines to get the oil from the Canadian oil sands to the coasts of Canada or the U.S. so the oil is effectively landlocked in North America. Because that oil is trapped in our market we pay around $15 less per barrel than the Europeans do because our oil cannot reach international markets. http://www.bloomberg.com/news/2012-03-01/keystone-oil-pipeline-seen-raising-gas-prices-in-midwest-energy.html Enbridge is also planning on building another oil pipeline from Illinois to Cushing, Oklahoma which will provide more Canadian oil access to international markets. Enbridge is also building another oil pipeline from the oil sands to Vancouver. These pipelines will inevitably be built but they will not bring down gasoline prices. The oil from the Canadian oil sands already gets to market but a lot of it gets there by train instead of pipeline. The only people who benefit from these pipelines in the longrun are people like me, who owns stock in the Canadian oil sands companies and the pipeline companies. The operators in the Canadian oil sands only get around $80 per barrel for oil because it is more expensive to ship it by train and the oil is mostly trapped in North America. When those pipelines are finally built they will get closer to the Brent crude price of $115 which will send their profit margins through the roof. If you want our oil to stay significantly cheaper than Brent crude you should definitely be cheering for new oil pipelines to not get built.