The ongoing U.S. oil boom has flooded the Gulf Coast with domestic crude to levels not seen in decades, creating a homegrown oil glut in the nation's refining center just as the Obama Administration prepares to rule on a pipeline that would add a torrent of heavy Canadian crude to the same region.
It's just the latest in a string of developments that have surprised and roiled oil markets since 2009, when the combination of falling fuel demand and an unexpected surge in U.S. oil and natural gas production began destroying widely held assumptions about the nation’s need for imports.
Conditions have changed so radically that U.S. refiners are now exporting record amounts of fuel to overseas customers, and there’s a parade of tankers delivering Texas oil to refineries on the east coast of Canada. As these and other surprising trends unfold, it's becoming increasingly clear that the controversial Canadian oil import pipeline, the Keystone XL, is not an urgently needed link.
Many benefits being touted by Keystone XL supporters—American jobs, lower oil costs, greater energy independence through lower imports—are already being delivered by the domestic oil rush. The Canadian oil pipeline might expand some of those benefits, but its significance has been eclipsed by surging production in North Dakota and Texas.