re: Field Research Regarding Keystone XL Pipeline *UPDATE in OP*

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So how bad is Canada getting the shaft due to this technicality?

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Specifically it's TransCanada the company.

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Do they really care if the Keystone XL Pipeline gets constructed vs other alternatives for them to export the oil?

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They (TransCanada) does care because they can charge a transportation fee on their pipeline. Tar sand producers also care because the proposed Keystone pipeline is a cheaper transportation alternative for getting the oil to market. Regardless of whether Keystone gets State Department approval to cross the Canadian/US border the oil will find a market, it just depends at what cost. It's my understanding that the initial break even price per barrel to produce the tar sands was $75/barrel. It's probably a little lower now and could be a little lower with cheaper transportation cost via the pipeline. If the price per barrel dips below ~$70 tar sand production will likely halt or slow down a lot.

The big winner in the Keystone controversy is Obama and the politicians on both sides. Obama is getting huge donations from environmental nuts to continue to hold up the Keystone permit and the GOP continues to get political donations from the other side. What a game.