Rep. Lee Terry earlier this week gave national and Nebraska press the false claim that tarsands from Keystone XL would replace heavy oil from Venezuela. This is not true and has never been true.

Oil Change International released a report today (embedded below) that documents the fact that the refineries on the Gulf Coast equipped to handle heavy crude and tarsands will not simply turn away Venezuelan crude because they don’t like their politics. Refiners are in the business to take oil, not turn it away. The refineries on the Gulf Coast are owned by Venezuela, Mexico and Saudi Arabia. The steel is sourced from an Indian company, Welspun. China became the lead investor in tarsands as of last year. There is not a lot of USA in this pipeline.

Quote from Bold Nebraska executive director Jane Kleeb:

“Rep. Terry is living a pipe dream that the Keystone XL will bring America energy independence. All Keystone XL does is bring risk to family farmers and ranchers while lining the pockets of dirty tar sands producers and perpetuating a market that favors the very countries Lee Terry says he hates. If Rep. Terry truly lived his words, he would show up at the Build Our Energy barn project with a hammer to create real energy independence while telling TransCanada, Saudi Arabia, China and India that we do not need their foreign tarsands nor their foreign investments in this risky energy.”


July 11, 2013

Lorne Stockman, 540-679-1097,
or David Turnbull, 202-316-3499,

Keystone XL Won’t Stop Venezuelan Imports:
New report shows Keystone XL will compete with, not replace, foreign oil and will lead to tar sands crude exports from US soil

A report released today by Oil Change International (embedded below) provides detailed analysis of how the State Department’s review of the Keystone XL pipeline presents an outdated picture of the North American oil market. The new analysis shows that building Keystone XL will actually create a surplus of heavy oil on the Gulf Coast and force Canadian producers to regularly export their dirty oil into the world market. The Keystone XL pipeline would provide an outlet that would not otherwise exist for tar sands producers to get their crude oil to the export market.

In stark contrast to the simplified and convenient rhetoric of Keystone XL proponents echoed by the State Department, the crude delivered by the proposed pipeline would not replace oil from Venezuela or the Middle East. Using industry data, the report shows that Venezuela, Mexico, and Saudi Arabia actually own half of the heavy oil refinery capacity on the U.S. Gulf Coast and that they have no intention of replacing their heavy oil with Canadian sources.

As a result of the recent U.S. oil boom, the market has changed substantially since Keystone XL was initially proposed, and Canadian suppliers will now have to compete with discounted domestic supplies as well as international heavy oil suppliers for a share of what is left of the Gulf Coast refining market.

Just this week Rep. Lee Terry (R-NE) claimed that Venezuela’s recent offer of asylum for whistleblower Edward Snowden is somehow a reason to approve the pipeline. He was quoted as saying, “The Keystone pipeline can completely offset Venezuelan oil.” As today’s report shows, this is not supported by the facts on the ground.

“The idea that refiners will choose to buy Canadian oil because Canada is a friendly neighbor is not supported by any data or analysis – it is simply a talking point,” said Lorne Stockman, Research Director at Oil Change International and author of the report. “They will maximize their profits and buy crude from whoever is offering the best deal. Keystone XL will give Canada’s tar sands producers an outlet to export their crude abroad when they can’t sell it on the Gulf Coast.”

The report explains that Canadian producers will seek to exploit a loophole in the U.S. crude oil export regulations that allows for foreign crudes to be exported around the world from U.S. soil should Keystone XL be built. U.S. crude can only be exported to Canada.

This report comes on the heels on other calls for the State Department to redraft its simplistic analysis of the pipeline’s impacts in order to account for significant changes in North American oil markets. Just yesterday, Rep. Waxman (D-CA) and Senator Whitehouse (D-RI) wrote to the State Department calling for it to redo the analysis and accurately report the pipeline’s climate impacts.

This report adds to the mounting evidence that Keystone XL is the key infrastructure project that will enable tar sands production growth and its associated climate emissions.

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Oil Change International: KXL Crude Exports by hefflinger