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If you can produce more than you can transport, the price drops--maybe not elsewhere, but at the wellhead. If it drops far enough, or projections show it will, why even drill a well into a resource which will lose money today, but may make money later?

With the pipeline, drilling may pick up if the Feds get out of the way.

We have had similar problems in ND where the Bakken oil, once trading on par with WTI, was being discounted by up to $35/bbl because there was no room for it on the pipeline.

At the other end, though (once it got there) it was worth full price.

44 posted on 03/31/2010 12:01:30 PM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)

What was the pipeline carrying?.. Canadian oil?..

45 posted on 03/31/2010 12:30:59 PM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole....)

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