Beaumont event touts benefits of Keystone XL

By Eric Besson
Beaumont Enterprise

Despite an oversupply of crude oil that has halved trading prices and led the U.S. to consider lifting a 40-year-ban on crude exports, completing the northern leg of the Keystone XL pipeline remains a priority, U.S. Sen. John Cornyn said Friday in Beaumont.

“We know that as global demand goes up, prices will go up,” Cornyn, R-Texas, said. “I think we ought to take advantage of the opportunity we’ve been given because great innovative drilling techniques devised in the United States and the great natural resources we have … help grow our economy and help keep America safe.”

Cornyn delivered his remarks at a news conference Friday in Beaumont.

With a Republican majority in both chambers, Congress seeks to circumvent President Barack Obama’s administration, which has waited several years to decide whether to grant a permit allowing the Canadian company TransCanada permission to build the controversial pipeline across the border.

Crude has long coursed from Canada to Oklahoma through the existing Keystone pipeline. Southeast Texas connected to that line in January last year when the Keystone XL southern leg ending in Nederland was complete, and local plants are already refining crude from Canadian fields.

The northern leg is designed to run near North Dakota’s Bakken field, where hydraulic fracturing techniques have unlocked previously unreachable crude oil that refiners want to access at cheaper prices than the cost to ship it by rail. Bakken crude would supplement tar sands in the pipeline, a TransCanada executive said. Because it crosses the border, it needs a State Department permit.

Environmentalists have said Keystone XL would encourage more production of the tar sands, said to have a more negative impact on the atmosphere than lighter grades of crude. Proponents say it would increase the nation’s energy supply and create jobs en route to boosting the economy.

Ahead of next week’s Senate debate, Cornyn joined local elected officials, refinery representatives and business leaders at a gathering of people upbeat about the Keystone XL pipeline’s southern leg, which has been on line for one year.

Attendees discussed the pipeline’s importance and benefits during a gathering at Gulf Coast Fabricators, a Beaumont company that, having earned contracts to help area refineries expand, was billed as a symbol of job creation through Keystone.

Many of Southeast Texas’ benefits from Keystone have already materialized, as refineries simultaneously expanded and adjusted systems to take in heavier crude from Canada.

Greg Gentry, a Valero vice president over the company’s Port Arthur refinery, said his plant takes 15 percent of the volume from the pipeline’s southern leg, with half being from Canada and the other half from Texas.

Corey Goulet, chief of Keystone projects for the Canadian company TransCanada, said the northern leg would expand volume by 830,000 barrels per day.

Although Gulf Coast refineries continue to operate at capacity, plants like Valero may opt to replace another crude type with more oil sands, and they would receive the Canadian crude with cheaper transportation costs, Gentry said.

Cornyn and other officials hammered the message that Canadian oil would help reduce American reliance on foreign oil, which is subject to geopolitical turmoil.

Overall, supply is becoming less of an issue.Domestic production of energy sources has soared over the past several years, growing global production at a faster rate than demand.

Amid the crude price slump, domestic producers are cutting projects and jobs as international producers run by governments refuse to shrink production. Domestic reserves have led oil producers to call on the U.S. to lift its export ban.