What if TransCanada's Keystone XL pipeline that many in US Congress are fighting so hard to get built carries crude oil hundreds of miles through the Heartland only to have it loaded onto tankers and shipped overseas?
Opponents of the pipeline have drawn on that export scenario often during the ongoing debate in Washington.
"There's nothing to stop Gulf Coast refineries from simply exporting the refined product," Representative Henry Waxman, Democrat-California, said during a House hearing December 2. "That doesn't improve our energy security."
Except it does, argues a report issued Wednesday by the Energy Policy Research Foundation, an industry-backed think tank.
Energy security should not be seen solely as a measure of how much the US imports or exports, the group said.
Rather, the US faces threats to energy security when unstable parts of the world hold the largest concentration of low-cost reserves. Wealth then transfers from US consumers to foreign oil producers, and the US economy sits vulnerable to price shocks if supplies get disrupted.
"The US is well integrated into the world market and reducing imports provides some 'energy security' benefits, but these are limited," the report said. "The large payoff in terms of energy security is bringing on new and diversified supplies into the world petroleum market free from the instability of war and domestic turmoil."
The foundation argued that surging production from Canada's oil sands fits that picture, as it comes from one of the most stable regions of the globe. It added that the integrated investment patterns with Canada sends benefits the US.
If Keystone opponents insist on banning exports from the pipeline, as some have suggested, transportation costs would soar for US refiners, the report said.
"The net effect of a ban on petroleum products would be to raise the cost of petroleum use in the national economy since gains in transportation efficiencies would be unavailable and refinery utilization rates would fall as refiners faced rising costs from higher transportation fees," the paper said. "Such a policy would be counterproductive and increase the volume of net imports and forego the value-added benefits from higher utilization rates at US refineries."
