USA Today is reporting:
Last October, Kinder Morgan Energy Partners, the biggest U.S. pipeline operator, announced plans to build a 740-mile pipeline from the oil fields of West Texas to a refining hub outside Los Angeles. Dubbed the Freedom Pipeline, the $2 billion project would deliver 277,000 barrels a day of cheap Texas crude to West Coast refineries that had long relied on expensive oil shipped from Alaska’s North Slope or even foreign markets. All Kinder Morgan needed was to get regulatory approval and long-term contracts with large California refiners, including Valero Energy and Tesoro.
In April, Kinder Morgan began negotiating agreements with refiners, who normally commit to buy predetermined amounts of oil for as long as 10 years. On May 31, however, Kinder Morgan announced it was canceling the project after Valero and Tesoro said they weren’t interested in buying the pipe’s oil on a long-term basis. They’d found a better way to get their hands on domestic crude: railroads.