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Why would the Keystone oil replace oil that travels a short distance?

The crude from Venezuela and that which would be shipped via the Keystone Pipeline are similar in that they both are heavy sour crude. (Think wet hot asphalt.) The refineries on the gulf coast, particularly the old Valero refinery and the Motiva refinery were upgraded to large units that specialized in handling this crude. This crude requires special units to hydro treat and cracking.

(An article to explain is at Wikipedia.)

As these are large expensive and specialized units, it is better to move the oil to the units rather than build new units near the oil. On the other hand, West Texas Intermediate Crude and Light Sweet Crude can be processed with relatively simple stills.

So, the Canadian crude will augment, not displace the Venezuelan crude.

Qazulight (You asked)
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