N. American Oil – ‘Caught Between The Sands And The Pipelines’
The two biggest sources of oil in North America produce significantly different types of oil, and the lack infrastructure to link those sources to proper refineries results in higher costs and less competitiveness on the global oil market.
A great piece from ZeroHedge, Oil Price Differentials: Caught Between The Sands And The Pipelines, will provides useful background to US energy infrastructure, and how it is impacting (impeding) the vast flow of Canadian oil. I give a brief summary of the article below, and will likely reference this post in the future.
A “range of oil qualities and a raft of infrastructure issues are creating record price differentials. And with no solution in sight, [the authors] think those differentials are here to stay.” Historically, United States oil infrastructure has been built to refine large quantities of imported oil – essentially from the perimeter of the lower 48 states, and shipping it towards the interior – but this is the opposite of present day needs, which require oil from the interior of the country to be moved to outlying refineries.
http://jpinfluence.com/2012/06/28/news-n-american-oil-caught-between-the-sands-and-the-pipelines/
Map of the existing and planned oil and gas pipelines from Baku (Source: Wikipedia)