The Keystone XL Pipeline, Derailed?

Summary

• Recent US oil pipeline projects.
• What is the Keystone XL pipeline and its transportation cost benefits?
• Investing subtleties of North-South and East-West oil transport modalities.

Two recent oil pipeline project failures... Kinder Morgan's Freedom Pipeline, would have carried Texas light crude from West Texas to refiners in Southern California. Last May, the company canceled the $2 billion project because it couldn't attract enough customers.

Oneok Partners, Bakken Crude Express, a $1.8 billion pipeline proposal would have carried 200,000 barrels per day of light crude over 1,300 miles, from North Dakota to the Cushing, Okla. oil trading and storage hub. Oneok dropped the proposal in late 2012, saying it could not secure enough long term deals to cover the cost.

Since 2010, due to oil transport profits from: Berkshire Hathaway's large investment in Burlington Northern Santa Fe; and other railways such as Union Pacific; Norfolk Southern and CSX; the $8B Keystone XL oil pipeline has been kept in limbo.

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