Latest U.S. Senate vote on fiscal deal - Continental may be open to Keystone XL shipping more US oil
The company leading the U.S. oil boom in the Bakken oilfields in North Dakota said it would be open to talks with the Keystone XL pipeline project on it carrying a greater amount of domestic U.S. oil instead of Canadian crude.
TransCanada Corp, the Alberta-based company that wants to build the 800,000 barrels per day Keystone XL pipeline to help link Canada's oil sands to refineries on the Gulf Coast, has said the line would take only about 100,000 bpd of oil from the Bakken oil fields.
Harold Hamm, chief executive and largest shareholder of Continental Resources Inc, made headlines this summer when he said the pipeline was no longer crucial because it would take a relatively small amount of U.S. oil and because rail and existing pipelines offered alternative ways to ship the oil.
On Tuesday, Hamm held out the possibility that Keystone could become a more attractive project to Continental if TransCanada decided to carry a greater percentage of Bakken oil.
"They have not talked to us about it, but we would hold that discussion with them," Hamm told reporters in Washington.
Rail is currently moving large amounts of Bakken oil to refineries on the East and West Coasts and also to plants in Louisiana.
Gulf Coast refineries are tooled to refine the type of heavy oil found produced from Canada's oil sands, not the light sweet crude found in Bakken. But that could change if Gulf Coast refineries saw larger streams of Bakken oil headed south.
Continental has a contract with TransCanada for Keystone XL to take some 35,000 bpd of its Bakken oil.
Hamm reiterated that if TransCanada sticks to its current projections of carrying some 700,000 bpd of oil sands petroleum the pipeline is not crucial for his company.
"At one time it would have been helpful, by the time it would be built now I don't think it would be, so it's not crucial to our company," said Hamm.
TransCanada was not immediately available to respond to Hamm's comments.
Oil analysts have said Hamm's downplaying of the importance of Keystone XL could be an effort to drive transportation costs lower by playing rail against the pipeline.
"Why wouldn't he want to save money by transiting crude via Keystone? Of course he would, but he's not going to get deeper savings by looking like he needs it," Kevin Book, an energy policy analyst at ClearView Energy Partners said on Tuesday.
TransCanada's applications on the project have been in the works for more than five years. The pipeline is opposed by environmentalists who say the line would expand production of oil sands, which have higher carbon dioxide emissions than the average crude used in the United States.
President Barack Obama is not expected to decide on Keystone XL until next year.
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