Keystone XL Pipeline

AAA

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.

INVESTOPEDIA EXPLAINS '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. Unconventional Oil

    A type of petroleum that is produced or obtained through techniques ...
  2. Christmas tree (oil and gas)

    A vertical assembly of mechanical elements used in oil exploration ...
  3. Oil Initially In Place - OIIP

    The amount of crude first estimated to be in a reservoir. Oil ...
  4. Normal Spoilage

    The deterioration of a firm's product line that is generally ...
  5. BP Oil Spill

    A 2010 oil spill that occurred in the Gulf of Mexico as a result ...
  6. Oil Services Industry ETF

    A sector exchange-traded fund (ETF) that invests in companies ...
Related Articles
  1. The Getty Oil Takeover Fiasco
    Home & Auto

    The Getty Oil Takeover Fiasco

  2. Canada's Commodity Currency: Oil And ...
    Forex Strategies

    Canada's Commodity Currency: Oil And ...

  3. 5 Biggest Risks Faced By Oil And Gas ...
    Fundamental Analysis

    5 Biggest Risks Faced By Oil And Gas ...

  4. 5 Common Trading Multiples Used In Oil ...
    Investing

    5 Common Trading Multiples Used In Oil ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center