Keystone XL Pipeline

DEFINITION of 'Keystone XL Pipeline'

A proposed extension of the Keystone pipeline system that is to transport oil from Alberta, Canada to refineries in the United States. As of 2014, the Keystone XL pipeline is to be developed by TransCanada Corporation, which has constructed several other pipelines between Canada and the United States since 2011.

BREAKING DOWN 'Keystone XL Pipeline'

Canada has large reserves of oil locked in oil sands. This oil is considered heavy oil, which requires a different refining process than other types of oil. The production of heavy oil releases particulate matter, such as soot, as well as chemicals such as sulfides, hydrogen cyanide, and sulfur.

The Keystone system transports diluted bitumen and synthetic crude oil from Alberta through Montana, South Dakota, Nebraska, Kansas, and Oklahoma, to refineries located in Texas, Illinois, and Oklahoma. Keystone XL would run from the Hardisty Terminal in Alberta to Steele City, Nebraska, and would pass through Montana, South Dakota, and Nebraska. Because the Keystone XL pipeline would provide a more direct route to refineries found in the United States, it will make the first phase of the Keystone less useful.

The first phase of the Keystone Pipeline, completed in 2011, is approximately 2100 miles long, while the proposed Keystone XL expansion is estimated to be over 1100 miles long. Keystone XL is estimated to carry over 800,000 barrels of oil a day, bringing the capacity of the Keystone system to 1.1 million barrels per day.

The proposed Keystone XL pipeline has been criticized by environmental groups, politicians, and residents of states that the pipeline is to pass through. These groups have raised concerns of the proposed route’s proximity to the Sandhill region of Nebraska, as well as the Ogallala aquifer, which provides a significant portion of the water used to water crops in the United States. The bitumen carried by the pipeline to the United States will likely result in higher greenhouse gas emissions, as Canada has experienced since first developing its oil sands.

Proponents of the pipeline say that it will increase the supply of oil to the United States, and that oil coming from a friendly neighboring country increases security.

 

RELATED TERMS
  1. Oil Reserves

    An estimate of the amount of crude oil located in a particular ...
  2. Pipeline

    1) An investment company whose purpose is to collect investment ...
  3. Initial Production

    The measurement of an oil well's production at the outset. Initial ...
  4. Crude Oil

    Crude oil is a naturally occurring, unrefined petroleum product ...
  5. Oil ETF

    A category of exchange-traded funds that invest in companies ...
  6. Henry Hub

    A natural gas pipeline located in Erath, Louisiana that serves ...
Related Articles
  1. Markets

    TransCanada Sits In Oil Pipeline Catbird Seat

    TransCanada stands to win no matter what happens to the Keystone XL Pipeline. Approved? Send oil to a thirsty America. Shot down? Send it west to tankers.
  2. Managing Wealth

    Gulf Keystone Petroleum: Time to Invest (GUKYF)?

    Find out why it isn't yet time to invest in Gulf Keystone Petroleum, even though the company reached a new payment agreement with the Kurds.
  3. Markets

    Is The US Dependence On Foreign Oil Necessarily A Bad Thing?

    We examine the myths and facts about US dependence upon foreign oil.
  4. Markets

    Three Things To Expect In Trudeau's Canada

    Justin Trudeau became the youngest ever Prime Minister of Canada this week. What does his election mean for Canada's economic relations with the United States?
  5. Markets

    Oil Prices' Impact On Oil Transport Sector

    Short-term changes in oil prices and in the volume of oil produced have a marginal impact on the oil transportation industry in Canada.
  6. Markets

    Oneok Partners To Build Yet Another Oil Pipeline

    Oneok has announced the construction of the Bakken Crude Express Pipeline.
  7. Markets

    Energy Sector Recap Week Ending Aug. 24, 2012

    Here's a recap of what happend during the week of Aug. 24, 2012 in the energy sector.
  8. Markets

    XL Group Seems To Be Back On The Right Track

    XL is a different company now, but still needs a better ROE to be a long-term winner.
  9. Markets

    The 5 Biggest Canadian Oil Companies

    Obtain information about some of the largest and most successful major integrated oil corporations that are headquartered in Canada.
  10. Investing

    3 Ways To Profit From Oil -- No Matter Where The Prices Are

    I recently returned from a three-week stint in Asia. After a long trip I always take time to go through my e-mail and catch up on news and reports coming in from across the commodities world. ...
RELATED FAQS
  1. Why is President Obama hesitant to approve the Keystone XL Pipeline project?

    Find out how President Obama's hesitancy over the Keystone XL pipeline project is motivated by political pressure from two ... Read Answer >>
  2. What methods can an oil and gas producer use to transport oil?

    Explore the different methods oil and gas companies have available to them to transport oil, the majority of which is transported ... Read Answer >>
  3. Why do oil stock prices drop?

    Doesn't lower oil prices mean more profit for companies that use oil products?  ... Read Answer >>
  4. What is a heavy oil differential and how does it affect oil producers?

    Learn what the phrase "heavy oil differential" refers to and the significance of heavy oil differentials for oil production ... Read Answer >>
  5. What economic indicators are especially important to oil traders?

    Economic indicators are used by traders and investors in an attempt to understand the underlying fundamentals of the market. ... Read Answer >>
  6. When you buy oil, do you have to buy thousands of stocks at one time or can you start ...

    I am new to oil stocks and want to invest a couple thousand dollars. Do oil stocks pay dividends? Is now the time to ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center