North American oil production is on the rise in a serious way, and there are two prime culprits: the Bakken shale and the oil sands. ... oil from the Canadian oil sands is so heavy that it has earned a distinct moniker: "bitumen." And there is a tsunami of bitumen on the way. The two million bpd being produced in the oil sands today is set to increase 50% in just the next three years.

However, Canada's oil sands are not the only place in the world producing heavy oil. In general, global production is gradually moving towards heavier, sourer crudes because the easy deposits of light, sweet crude are being tapped out. And that has forced refineries to evolve.

A refinery designed to handle light, sweet WTI crude cannot switch to heavy, sour oil sand bitumen without some serious upgrades. To that end, US refineries have invested billions in upgrades over the last decade to enable them to process heavy oil. The catch is, now the refinery army along the Gulf Coast needs heavy oil – just as they couldn't easily switch from light to heavy, they can't switch from heavy back to light.

The obvious source is the oil sands. It's a win-win: Oil-sands producers want to get their oil to suitable refineries, and the heavy oil refiners on the Gulf Coast want Canadian crude, because without access to bitumen they are being forced to pay a premium for to secure heavy oil supplies from Venezuela.

But that potential win-win is instead a losing predicament for all, because the pipelines to move that oil simply don't exist. ...

Cushing is overwhelmed. The storage tanks at Cushing are at record levels, housing no less than 46.7 million barrels of oil. The recent reversal of the Seaway pipeline is helping ... The pipeline's owners would ideally like to twin the pipe, but regulatory proceedings for that project are not yet under way.

The much-debated Keystone XL pipeline will also help. While routing and approval for the northern section of the pipeline are still under debate, construction of the southern leg of the project, running from Cushing to the Gulf Coast, is set to begin this summer. It could be operational before the end of next year.

[A good explanation of why the Keystone XL pipeline is so greatly desired. I suspect that mining the tar sand will be an environmental disaster for Canada. I also fear what moving the "bitumen" means for the US land and aquifer it traverses, and do not expect its builders to be any more careful with the XL than they are with anything else.]