Trends -- The Impact of the Bakken -- Further Impact of the President Killing the Keystone

Link here.

And more here.

This is really quite incredible -- the impact of four counties (Williams, Mountrail, McKenzie, and Dunn) in fly-over country.

Unless I'm reading one of the linked stories incorrectly, it looks like Valero won't be adding another coker in Louisiana because of the UNCERTAINTY of the KEYSTONE XL. The CEO is not convinced that the pipeline will be finished any time soon, obviously.

Every day, the decision to kill the Keystone XL 1.0 looks more and more irresponsible and ill-conceived.

Meanwhile, purging of the Seaway is complete, one more step in process of reversing the flow.

Back to the earlier links.

First, the  impact on the Bakken leading to increased sweet oil imports in the Gulf:

Increasing U.S. onshore shale oil output likely will displace light sweetcrude imports to the U.S. Gulf Coast by 2015, Valero Corp Chief Executive Bill Klesse said on Tuesday. The increased sweet crude going to Gulf Coast refineries also is expected to narrow heavy crude differentials to thepoint that Valero aims to shelve plans to add a coker unit toits 292,000 barrel-per-day refinery in Port Arthur, Texas,because it won't be economical, Klesse said.

Four years ago we thought we want to build cokers to do allof this but today you're seeing much more light sweet crude,"said Klesse, head of the largest U.S. independent refiner,during a break at the annual meeting of the American Fuel and Petrochemical Manufacturers in San Diego, California.

"In another two to three years, we are saying like 2014 to 2015, there will be no light sweet crude imports into the U.S. Gulf Coast. It's about a million barrels today," he said.

In North Dakota alone, drilling in the Bakken shale prospectdoubled the state's crude output in the last two years to546,050 barrels per day (bpd). That will narrow the discount of heavy crude compared tolight, so much so that Valero expects to let its permit for a $500 million coker project at the Port Arthur plant expire.He said a big factor in the equation is uncertainty as to when TransCanada's proposed $7 billion Keystone XLpipeline can move forward to transport Canadian heavy crude from Alberta to U.S. Gulf Coast refineries with coker capability to process it -- like several of Valero's plants. 

Pressure on Canadian oil sands and  Bakken sweet:

Bargain-basement discounts on Canadian crude are more than just a short-term irritant for producers as surging supplies and a limited U.S. Midwest refining market threaten to cut
industry-wide revenues by as much C$18 billion ($18 billion) a year, an analyst said on Monday.

Wide light and heavy crude price spreads plaguing the Canadian market since the start of the year could expand even more in the coming two months as numerous refineries begin
maintenance, and the end of that work and start of a reversed pipeline to Texas from Oklahoma won't bring permanent relief to fundamental problems.

He said the situation could last beyond 2013, when the Keystone XL southern portion starts to drain large volumes of>supply from the Cushing, Oklahoma, storage hub and moves it toTexas refineries. The northern, cross-border portion of Keystone XL and or newpipeline capacity to Canada's West Coast are not expected tostart up until the second half of the decade.Another factor that may ease the situation could be a reversal of Royal Dutch Shell's 1.2 million barrel a day Capline pipeline to Illinois from the Gulf Coast, Potter said.

One source told Reuters on Monday that the concept i sunder discussion.

Canadian synthetic crude, derived from the Alberta oil sands, and Bakken light oil, from North Dakota shale deposits, are selling for around $16 a barrel and more under U.S. benchmark West Texas Intermediate crude and $34 under the international Brent marker.

Some great investment opportunities, if one thinks about it.