Despite oil price slump, pipeline project still viable

What’s encouraging news for motorists is often foul news for those in the petroleum industry. Crude oil prices have fallen to under $40 a barrel after peaking last summer at over $140. Jeff Rouh is spokesman for the Keystone pipeline, which is under construction through several Nebraska counties. Despite the drastic drop in oil prices, Rouh says the pipeline project -will- continue.

“The economics of the project are looking very, very good,” Rouh says. “While the price of oil is down, the demand for petroleum products is still high enough to warrant ensuring refineries have a strong, stable supply of oil and that’s very much what the refiners see in oil from the Keystone pipeline.”

Trans Canada plans to spend about $5-billion to complete the pipeline from Tar Sands in Canada, through the Dakotas and Nebraska, to refineries in Oklahoma, Kansas and Illinois. Rauh does say the down oil market has had an impact on the extraction processes in Canada.

“It certainly has effected the pace of activity for newer projects,” he says, “but we have firm commitments for shipment for over 900,000 barrels of oil a day on the Keystone system so there’s still strong demand for this project.”

The Keystone pipeline will transport about 450,000 barrels of oil daily when it goes into service early next year, before ramping up to full capacity.

Thanks to Jerry Oster, WNAX, Yankton