Midwest refineries are at capacity from Canadian tar sand oil and are expanding. All refineries can't refine the heavy oil produced from tar sands. The next closest ones are on the Gulf Coast.
Midwest Oil Refineries Gobble Up Canadian Tar Sands, Spew Greenhouse Gasses « It’s Getting Hot In HereAccording to the Chicago Tribune, oil refineries across the Midwest are set to expand (see graphic) and are planning on processing heavy crude oil from Canadian tar sands, part of an industry-wide trend to buy more Canadian crude.
and Reuters ....
and The Alberta Oil-Energy Sector ......NEW YORK, June 24 (Reuters) - Refinery upgrades nearing
completion in the U.S. Midwest may further distort the West
Texas Intermediate crude market as the overhauls will encourage
plants to back out domestic oil in favor of Canadian imports.
WTI has decoupled from the global oil market due to a lack
of transportation infrastructure to move barrels to high-demand
regions on the coasts that forces producers with no access to
alternatives to discount oil to get it to market.
Over the next three years, refinery upgrades will back out
an estimated 230,000 barrels per day of domestic light crude
oil from the Midwestern refining system in favor of Canadian
heavy crude oil, according to a Reuters analysis of the
expansion plans. (See Table 1)
U.S. refiners turn to heavy oil amid pipeline crunch | Alberta Oil – Energy Sector InsightValero is far from the only refiner preparing for a flood of Alberta bitumen. As more oil sands output flows through Hardisty – the town bills itself as “Alberta’s Oil Hub” – en route to markets in the U.S., refiners from the Gulf Coast through the Midwest and up to Detroit are spending billions of dollars to refit old plants with additional or brand new coking capacity to handle and process the stuff. The last 25 years in particular have been marked by a seismic shift in the consistency of U.S. oil imports, the Congressional Research Service reports. Imports have grown steadily “heavier” while the average sulfur content of those barrels has increased. The change has forced refiners already facing higher crude prices – and thus, higher input costs – to invest in expensive technology to treat low grade volumes of crude or else exit the business entirely. At the same time, environmental legislation, improving vehicle efficiency standards and excess plant capacity are conspiring with soft demand for refined petroleum products at home to dim the sector’s long-term prospects.
Since the Keystone XL pipelines are going to the Texas refineries, what are they going to do with the product? You obviously don't know how gasoline is distributed and the logistics of doing business with bulk materials. If they're exporting the gasoline now for the existing Keystone Pipeline development, they're going to export that additional supply. What they are doing now is bringing down Canadian bitumen from tar sands to refineries in the plains, where the market was once serviced by gulf production and refineries and selling off the product from the gulf refineries to foreign markets.
The opinion is why the U.S. refineries are exporting gasoline and it's reasonable for them to compete with Venezuela. The fact that our refineries are exporting and are going to export isn't an opinion. Venezuela refinery capacity is 50% higher than their oil production, so why does Venezuela have that capacity to refine crude, if they plan on exporting the crude? Why did they go to the expense to build it? If Venezuela is going to sell gasoline, it has to do it locally. Selling gasoline, kerosene, diesel and aviation fuel is selling a value added product and a nation wanting to make money sells value added products and not bulk materials, like a third world country.
Source: List of oil refineries - Wikipedia, the free encyclopediaList of oil refineries
Paraguana Refinery Complex (CRP) (PDVSA) 956,000 bbl/d (152,000 m3/d) (Amuay-Cardón-Bajo Grande) (start-up 1997) Amuay Refinery (CRP) (PDVSA) 635,000 bbl/d (101,000 m3/d) (start-up 1950)
Cardón Refinery (CRP) (PDVSA) 305,000 bbl/d (48,500 m3/d) (start-up 1949)
Bajo Grande Refinery (CRP) (PDVSA) 16,000 bbl/d (2,500 m3/d) (start-up 1956)
Puerto La Cruz Refinery (PDVSA) 200,000 bbl/d (32,000 m3/d) (start-up 1948)
El Palito Refinery (PDVSA) 140,000 bbl/d (22,000 m3/d) (start-up 1954)
San Roque Refinery (PDVSA) 5,200 bbl/d (830 m3/d)
Upgraders (Extra Heavy Oil Joint Ventures with PDVSA at Jose)
Petrozuata (PDVSA) 140,000 bbl/d (22,000 m3/d) (start-up 2000)
Operadora Cerro Negro (ExxonMobil, Aral AG, and PDVSA) 120,000 bbl/d (19,000 m3/d) (start-up 2001)
Petrocedeño earlier Sincor (Total S.A., Statoil, and PDVSA) 180,000 bbl/d (29,000 m3/d) (start-up 2001)
Ameriven (ConocoPhillips, ChevronTexaco, and PDVSA) 190,000 bbl/d (30,000 m3/d) (start-up 2004)
If you know how to look and add, Venezuela has more refining capacity for crude oil than any other country in North and South America, except the United States.