The Biden administration is considering additional options for increasing crude oil imports from Canada, including increasing rail exports and extending pipeline capacity along existing routes.
There have been no clear-cut solutions so far. However, according to the Wall Street Journal, one option remains off-limits: revisiting the Keystone XL pipeline, which President Joe Biden effectively shuttered on his first day in office.
The statement came as the Biden administration tries to protect consumers from the recent spike in gas prices in the United States, which reached their highest level since 2008.
The White House has taken a number of steps to assist stabilize gas prices, including President Joe Biden’s declaration last week that the US will release another 180 million barrels of crude oil from its Strategic Petroleum Reserve to help improve supplies.
However, without action to resurrect the Keystone XL pipeline, options for increasing Canadian crude imports are limited.
While Canada might increase rail exports to the United States by 200,000 barrels per day, analysts believe this would be a costly alternative. And the increase would be insignificant, accounting for only a small portion of Canada’s total exports to the US, which last year averaged around 4.3 million barrels per day.
The Canadian government is also planning to expand the Trans Mountain pipeline, which will allow it to transport an additional 590,000 barrels per day. However, such expansion will not be finished until 2023.
The White House has claimed that even if Biden moved today to resurrect Keystone XL, the pipeline would not be finished in time to assist alleviate the country’s gas need.
“While the US continues to engage with a variety of producing countries to solve the present supply imbalance we are experiencing,” a White House spokesperson told the Wall Street Journal, “the Keystone XL pipeline would have done little to nothing to address that supply.”
According to analysts, Canada has enough supply to meet US demand; it just lacks the pipeline infrastructure to distribute it. “In terms of resource potential, there is no limit,” said Kevin Birn, an analyst at S&P Global Commodity Insights. “There is a capacity constraint.”