Growth in world demand for liquid fuels primarily in Asia:

 

EIA projects increased efficiency, biofuels will keep total crude oil use flat:

 

U.S. crude oil imports from key suppliers are declining:

Significant suppliers of U.S. crude oil imports have been Mexico, Venezuela and Saudi Arabia

• EIA forecasts that Mexican exports of crude will drop by 2 million Bbl/d by 2035 relative to 2007

• Between 2015 and 2010, the decline will be 500MBPD

• Venezuela has been focused on diversifying exports away from the U.S. and has received investments from China

• Saudi Arabia is currently China’s largest supplier of crude oil

• Canadian crude oil production is well matched to Venezuelan and Mexican production and similar to some Saudi crudes

 

 

Keystone XL shippers have refining in the Gulf and production in Alberta:

 

 

Exporting Alberta crude to China would be inefficient and expensive through KXL:

 

 

Existing and planned Alberta to West Coast projects:

• Kinder Morgan TransMountain: 300MBPD (in-service)

• Kinder Morgan TMX: 400MBPD (open season end 2011)

• Enbridge Gateway: 525MBPD (precedent agreements in place)

 

 

Exporting crude oil to China through Keystone XL would be uncompetitive:

 

Summary:

• The crude oil to be supplied by Keystone is comparable to the declines anticipated by EIA from existing U.S. suppliers such as Mexico.

• Gulf Coast refiners do not supply significant quantities of refined products to China – primary markets are the Gulf Coast, the East Coast and the Mid West.

• Keystone XL shippers largely have both Gulf Coast refining and Alberta production.

• China is not efficiently served through Keystone XL.

• Gulf Coast refiners would have to import an equivalent amount of petroleum to serve domestic needs for every barrel exported to China – all parties would pay high and unnecessary transportation costs.

• The most cost-effective and profitable outcome is for crude supplied by Keystone XL to be utilized in the United States.

 

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