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Keystone Pipeline Approval Could Shift Dynamics of Crude Export Debate

The debate over lifting the nation’s restrictions on exporting crude oil centers on refinery capacity and the types of available crude, complexities that could shift if the Keystone XL pipeline is approved, Roll Call reports.  

“We have to be very aware and sensitive of the investments that have been made by our refineries,” said Sen. Mary L. Landrieu, D-La., describing a mismatch in the capacity of the nation’s refineries, many of which added expensive technologies to process heavy oils from Venezuela and Mexico.  

Having made those investments, refiners stand to make more by processing heavy crude — like the oil produced in the Western Canadian tar sands that would be shipped through Keystone — because it commands a lower price on the market than light oil, which is easier to process.  

With production of light, sweet crude from shale formations in North Dakota and Texas booming, some lawmakers are pushing to lift decade-old export restrictions to provide market flexibility and encourage further oil field production.  

But that muddles a political argument for the Keystone XL pipeline. Supporters of the project argue the pipeline is needed to promote U.S. energy security, which is a tougher sell if domestic crude is being shipped abroad.  

Businessweek reports that "four politically vulnerable Senate Democrats are urging U.S. President Barack Obama to approve the Keystone XL pipeline, spotlighting the implications of an election-year decision that may influence which party controls the chamber."

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