Cajun Notes by Kermit Hoffpauir
For those unaware of crude oil and types of refineries and where sources of crude oil are from for them and certain products, I have already proposed that Venezuela is the sole major beneficiary of the blocking of the Keystone XL. Meanwhile the chattering class is hollering Warren Buffett’s railroad, there is much more to this than that.
First, Keystone XL was to bring HEAVY crude to the Gulf Coast (TX & LA) where 12 refineries use heavy crude as a feedstock. Primarily this is Venezuelan crude, which is a good bit less expensive and great for producing petroleum coke. Canadian Syncrude is also a heavy crude, though not as heavy as Venezuelan, and would be a stable supply. We have imported around 1.2 Million Barrels per Day of this crude in recent years. Additionally, Hovensa (Hess Oil/PDVSA 50/50 venture) imports a substantial percentage for its refinery in St. Croix, the largest refinery on U.S. soil rated at 590,000 barrel per day crude charge capacity.
Hovensa is shutting down!
That would mean that Venezuela LOSES over 1 Million Barrels per Day of oil exports. There are very few refineries in the world to utilize its crude as a major feedstock. It could be used as blending with light crude but not much else. All the talk about Warren Buffett is a sideshow, and should have nothing to do with the real reason behind Keystone XL.