LINDA WERTHEIMER, HOST:
This is MORNING EDITION from NPR News. I'm Linda Wertheimer.
STEVE INSKEEP, HOST:
And I'm Steve Inskeep. Good morning.
There's a little-known oil pipeline that snakes 500 miles from Oklahoma all the way down to the Gulf of Mexico. And while most people have probably never heard of the Seaway Pipeline, a tweak to the line's operations could lead to big changes in the oil market. Reporter Dan Gorenstein has more.
DAN GORENSTEIN, BYLINE: Right now, there's a real problem in the town of Cushing, Oklahoma. Storage tanks are practically bursting with domestic crude - crude that's stuck with nowhere to go. Even worse, foreign imports are flowing up the 500-mile Seaway Pipeline ending up in Cushing.
But Enbridge, the new investors in the pipeline, have a simple solution. They're going to reverse the flow. What that means is that the Seaway Pipeline will become a superhighway, releasing all that buildup out to refineries on the Gulf Coast.
PHIL FLYNN: This is a game changer.
GORENSTEIN: That's analyst Phil Flynn with PFGBEST in Chicago.
FLYNN: You know, how many years have we heard from every president that's been in office that they want to be less reliant on foreign oil? Well, here we are.
GORENSTEIN: You'd think less reliance on foreign oil means cheaper prices, right? Nope. Last week, after the Seaway deal was announced, the price of crude pushed past the century mark, the first time since June. Tom Kloza, the chief analyst for Oil Price Information Service explains that's because traders went a little nuts.
TOM KLOZA: For a moment, there certainly was a flow of money that went away from being invested in international oil. That investment community thought, ooh, perhaps I'm better off being invested in the domestic crude oil.
GORENSTEIN: It's clear why domestic oil is only getting more attractive. Production's ramped up, because it's easier to tap into U.S. shale oil. And the money's good. Kloza says producers can get oil out of the ground for $35 to $40 a barrel and sell it for more than double that.
And analysts say Seaway represents the first major project signaling that the new oil era in North America is here. But industry experts like Jackie Forrest of IHS CERA say it's not like the U.S. can stop importing oil.
JACKIE FORREST: This new domestic supply in the United States is adding to global supply and all things the same, that should help to moderate prices. But it's not going to mean really low prices, because, you know, it's just not that big of a number at this point.
GORENSTEIN: Forrest says that the U.S. will continue consuming 19 million barrels of oil a day, with prices set by the global market. So, historic highs for diesel and home heating oil aren't going away, at least this winter. If other projects do come online, production in the U.S. could add 2 million barrels a day in the next 10 years. But for now, those kinds of numbers are just pipe dreams.
For NPR News, I'm Dan Gorenstein. Transcript provided by NPR, Copyright NPR.