I have read the previous few posts and there is a misconception in regards to refining and what oil gets refined and then where it goes. I am in that side of the business.
West Texas Intermediate (WTI) is a very light oil, in its natural state it looks like diesel, it is easy to refine, if you have the right process.
Heres the irony, due to increased demand and lower domestic production that began back in the late 60's and 70's the majority of the refineries that were built, and existing refineries that were modified were engineered to refine heavy sour crude that we had to import from Venezuela, West Africa and to some extent the Middle East to keep up with our domestic demand. There has not been a refinery built in the USA in that last 45 years 85% of the existing refineries will not efficiently refine WTI or the Bakken Crude. The Keystone pipeline was being built to transport the heavy crude ( Its actually bitumen not crude oil) form Canada for purpose only, to blend with the WTI to run it through the refineries that are designed to refine the heavy crude. There is Canadian crude being imported now through the existing Keystone pipeline system and couple of other pipeline systems and amounts to about 600,000 barrels a day the Keystone segment that FJB nixed would have added about 800,000 barrels a day. Did you know we export about 500,000 barrels a day of light sweet to Canada as most of their refineries are designed for Light Sweet Crude.
The reason we still import crude from overseas is to the blend with WTI as explained above and to take up the slack from not being able to refine our domestic production. Approximately 70% of the Light Sweet Crude we produce is exported due to the fact that we do not have the refining capacity to refine the Light Sweet Crude. The reason there have not been any new refineries built is due to federal air quality regulations, that have only gotten stricter every decades. In other words you can not get the permits to build a grass roots refinery. There is new technology that meets the air standards and we will see new refineries being built in the near future. A crude oil refinery is not a simple undertaking and takes 2 to 3 years to bring on line, they are huge.
Exxon/Mobil is modifying 2 of the largest refineries in the USA to refine the WTI crude and have invested over 6 Billion to do so, these refineries are in Baytown, TX and Beaumont, TX and should be complete late 2023. These 2 refineries will help but won't fix the issue.
Guess who owns the largest refinery in the USA, Aramco, yep thats right the Kingdom of Saudi Arabia, the Motiva refinery in Beaumont, TX guess who's oil they refine ha ha.
The very last thing you want to happen is for the US Government to take over the oil and gas industry, that would end up as the biggest cluster that has ever existed, private industry is way way more efficient that Uncle Sam can even dream of. Just look how well they handled Health Care, the Covis BS, Social Security, and the real gem Afghanistan.
That's my 2 cents worth like it or don't but that is actually how it works kiddos.
