More On That Earlier Story About Re-Exporting Canadian Oil

Remember the original post?

Here's a bit more from The Financial Times:

Pipeline operator Enbridge said it plans to export Canadian crude oil via a US port in a move fraught with significance for energy policy in Washington.

The Toronto-listed company said it had been granted a licence to export crude produced in Canada through a subsidiary, Tidal Energy Marketing (US), confirming weeks of speculation in oil market circles. 

Canadian crude imports into the US hit a new record of 2.85m barrels per day in January. While US refineries are the main customers for this oil, Canadian producers want the option to sell these barrels onwards to other countries. 

The prospect of seeing some Canadian barrels disappear to foreign destinations will be controversial as the White House reviews the proposed Keystone XL pipeline, which would link Canada’s oil sands to refineries on the US Gulf of Mexico coast.

TransCanada, the project’s sponsor, has said Canadian oil shipped on the line will be processed inside the US. 

US law prohibits exports of domestically produced crude oil to all destinations but Canada. It allows the “re-export” of foreign-produced crude such as Canada’s as long as the oil has not been mixed with oil of US origin.

Bureau of Industry and Security data show traders in recent months have obtained licences to re-export crude assumed to be Canadian to destinations in Asia, Europe and Latin America. Enbridge is the first to publicly acknowledge plans to actually use its licence for re-export.

“We obtained the licence because one of our key strategies is to provide logistics solutions to an evolving North American crude oil supply environment that allows our customers to buy or sell where the prices are most favourable,” Enbridge said.

The company described as “small” the volumes to be exported – less than 1.5 per cent of Enbridge’s total US shipments of 2.4m b/d. Reuters first reported on Enbridge’s licence.