Air Date: Week of March 23, 2012

Cushing, Oklahoma: Pipeline Crossroads of the World (Photo: Roy Luck)

Cushing, Oklahoma is known as “the pipeline crossroads of the world’ and now it’s poised to get part of the Keystone XL pipeline. Cushing Chamber of Commerce director Brent Thompson tells host Bruce Gellerman that the pipeline is needed to connect oil storage facilities in Oklahoma to refineries on the Gulf Coast.

Transcript

GELELRMAN: From the Jennifer and Ted Stanley Studios in Somerville Massachusetts, it’s Living on Earth. I’m Bruce Gellerman. At last count there were 8,371 people living in Cushing, Oklahoma, but it wasn’t votes that brought President Obama to town. No, it was petroleum the President came to talk about. Cushing is home to 316 enormous oil storage tanks; it’s the biggest oil storage complex in the world. Crude from domestic producers and Canadian tar sands is pumped in but a lack of pipeline capacity makes it difficult to pump it out.

OBAMA: Right now a company called TransCanada has applied to build a new pipeline to speed more oil from Cushing to state of the art refineries down in the Gulf Coast. And today I'm directing my administration to cut through the red tape, break through the bureaucratic hurdles and make this project a priority. To go ahead and get it done.

GELLERMAN: Brent Thompson wants it done. He's executive director of the Cushing Chamber of Commerce. Mr. Thompson, welcome to Living on Earth:

THOMPSON: Thank you!

GELLERMAN: Boy, big day for Cushing, how did you prepare for the President’s visit?

THOMPSON: Well, actually we haven’t had to do a lot, we’re trying to kinda make sure that the yards are mowed and get our welcome signs out and that kind of thing, so we get an opportunity to just, kind of, take advantage of the situation and get excited.

GELLERMAN: So, it’s a historic day, but the real history in Cushing is the pipelines there, they run really deep.

THOMPSON: Yes. I mean, of course Oklahoma as you know, and Cushing is no different, has a long and storied history with energy. One of the very first huge oil finds in the world was here in Cushing back in 1912, I think. When the old Wheeler well hit and they found a huge amount of oil. And we have been involved in the oil industry ever since. I don’t know that anyone ever really planned initially to, you know, woke up one morning and said ‘we want to store oil for the rest of our life.’ But that’s the way it has evolved.

GELLERMAN: How did they get the oil out of Cushing back then?

THOMPSON: Well, it was done actually by horse and wagon, and in barrels, and everything has kind of evolved from that to trains and to now pipelines.

GELLERMAN: As I understand it, Cushing sometimes has as much as ten percent of the nation’s oil inventory.

THOMPSON: Typically, we will store about three days worth of oil at any one time, in terms of what’s consumed in the United States. You know, it doesn’t sound like a lot, but we can typically store here, if we were ever at capacity, probably somewhere in the neighborhood of 65 million barrels of oil. Typically, they don't like to stay at capacity, you know, they want to get it in and get it out, if they can.

GELLERMAN: Well, right now as I understand, you have a glut!

THOMPSON: We have never actually been at full capacity. But, compared to years past, yeah, we’ve got more oil here now than we normally have.

GELLERMAN: What does it look like to store this much oil?

THOMPSON: Well, huge tanks! (Laughs.) A typical tank that’s used for storage will hold about 250,000 barrels of oil. You know, on the north and south side of Cushing we have, we call them tank farms. We have 13 different companies in Cushing that actually make it their business to store and distribute oil.

GELLERMAN: How come you don’t have oil refineries right there? Why don’t you just take the oil that you store and just turn it into gasoline and use it there?

THOMPSON: (Laughs.) It’s funny you say that, back in the early days, we did have 13 refineries.

GELLERMAN: Oh?

THOMPSON: As time has gone on, they’ve for some reason or another, went out of business. We lost our last refinery here back in the late 80s, I believe.

GELLERMAN: Well, you’re the head of the Chamber of Commerce there, do you ever put that to some of these oil companies that bring their oil to you to store?

THOMPSON: Oh yeah. But unfortunately, it’s not that simple. They would agree, they would have no problem with that. The problem is the permitting process and the environmental regulations that we have. I mean, it’s the cost of doing that, particularly when you have refineries already built.

GELLERMAN: So, I have to ask you Mr. Thompson, with that, you know, ocean of oil that you’ve got in Cushing, what’s the price for a gallon of regular there?

THOMPSON: It’s running about $3.50.

GELLERMAN: Hmmm, cheap by today’s standards!

THOMPSON: In a lot of places, yes.

GELLERMAN: 'Cause it’s four, over four bucks in many a place…

THOMPSON: Is it four dollars in Boston?

GELLERMAN: Yeah, it’s not hard to find.

THOMPSON: I’ll be darned. You need to be in Oklahoma!

GELLERMAN: (Laughs). Well, that’s OK with me!

THOMPSON: (Laughs.)

GELLERMAN: So what would the Keystone pipeline do for you, if they were to build it? I mean, do you need another pipeline?

THOMPSON: Oh yes we do. To get the oil out to here and down to south Texas, and it will help us do that. It will also provide more oil for domestic purposes, which hopefully would have somewhat of a bearing on the price at the tank.

GELLERMAN: As I understand it, if the pipeline is built, a lot of that oil that they’re going to bring through your town and ship down to the Gulf is not going to stay in the United States.

THOMPSON: Nope.

GELLERMAN: It could go to overseas markets.

THOMPSON: Uh huh. Some of it will.

GELLERMAN: So, how does that help us, I understand how it helps an oil company, but I’m not sure how it helps the United States, and you know, me.

THOMPSON: You know, TransCananda, and I’ve sat through several meetings with them, I have never heard them ever, one time, say that all the oil that’s pumped through here into south Texas will ever be 100 percent for domestic use. You know, the fact that they’re going to sell fuel, export fuel to other countries, I don’t know that anybody here has a problem with that.

GELLERMAN: Well, Mr. Brent Thompson, I can hear why you’re the Executive Director of the Cushing, Oklahoma Chamber of Commerce.

THOMPSON: (Laughs.)

GELLERMAN: You’re a good champion.

THOMPSON: Well, it’s been all my life in this state forever, and we think very highly of the energy industry and probably always will.

GELLERMAN: Well, thank you very much Mr. Thompson.

THOMPSON: And do me one favor -

GELLERMAN: Sure!

THOMPSON: Make sure that from this year forward, that the Red Sox always beat the Yankees.

GELLERMAN: (Laughs.) WILL DO!

THOMPSON: Okay!

GELLERMAN: Bye bye!

THOMPSON: Bye bye!