XL Pipeline's biggest refinery located in tax-free Foreign Trade - kotanow.com- Scottsbluff Area News, Sports, and Weather

XL Pipeline's biggest refinery located in tax-free Foreign Trade Zone

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Energy Secretary Steven Chu says Canada's status as an ally with the U.S. may help win approval of the Keystone XL Oil Pipeline.

Chu says importing oil from Canada is more "comforting" than having other countries supply the oil.

Opponents say Chu's statement over-simplifies the complexity of a global oil industry.

For example, the largest refinery at the end of the pipeline, Valero, owned by Koch Industries, is located in Port Arthur, Texas, which is designated as a Foreign Trade Zone.

This means, by importing to and exporting from Port Arthur, refiners can avoid paying taxes on both ends. Valero has committed to refining 20 percent of Keystone XL's capacity, or 100,000 barrels a day, until 2030.

A 2009 market analysis conducted by Transcanada, as part of XL's Canadian permit application, projected that prices would actually increase about three dollars per barrel as a result of the pipeline.

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