What is the shale boom? Colonial pipeline? So the crude comes from Canada?

The shale boom

The shale revolution refers to the combination of hydraulic fracturing and horizontal drilling that enabled the United States to dramatically increase its production of oil and natural gas from tight rock formations that were previously impossible to reach economically.

Hydraulic fracturing, universally called fracking, means pumping high-pressure water, sand, and chemicals into underground rock to crack it open and release trapped oil or gas. Horizontal drilling means that once you drill down to the oil-bearing layer, you turn the drill sideways and run it along the seam, so one well can reach far more of the deposit than a straight vertical hole ever could.

The widespread use of both techniques started in the mid-2000s with natural gas in the Barnett Shale in North Central Texas, and by the early 2010s those same methods were being applied to oil. The result was a production surge so large that the United States went from importing roughly 60 percent of its oil to becoming the world's largest producer. The Permian Basin in West Texas and New Mexico became the center of gravity for that boom, and it is still the most productive oil-producing region in the country.

The Colonial Pipeline

Colonial Pipeline is the largest refined petroleum products pipeline by volume in the United States. It delivers more than 100 million gallons of fuel every day on a system stretching from Houston to the New York Harbor. To put that in perspective, that is about 2.5 million barrels a day.

The pipeline carries refined petroleum products such as gasoline, diesel, heating oil, and jet fuel from Houston, Texas, on the Gulf Coast up to Linden, New Jersey, serving several markets along the route through various branch lines. It is responsible for transporting about 45 percent of all fuel consumed on the East Coast, providing refined products to more than 50 million Americans in 14 states.

This is why the diesel situation is so pointed on the East Coast. Because no refineries between Alabama and the mid-Atlantic produce substantial quantities of transportation fuels, the southeastern United States is supplied primarily by pipeline flows, and to a lesser degree by marine shipments. If diesel prices spike at the Gulf Coast refinery end, that cost travels straight up the pipe to every truck stop, farm, and construction site from Georgia to New York.

A Federal Reserve Bank of Dallas official noted that surging global prices for diesel "will boomerang back" onto the East Coast, meaning there is no guarantee a US export ban even causes the national price to drop, because steep declines in Texas could be offset by spikes in New York. Colonial is the mechanism through which that boomerang would travel.

So the crude: Canada, yes, but not exclusively

The shale boom made the US a massive domestic producer, so American refineries run on a mix of domestically produced crude and imports. Canada is still the single largest import source, supplying roughly 63 percent of crude imports, primarily because Canadian heavy crude moves economically by pipeline across a shared border and blends well with lighter American shale oil in the refining process. Gulf Coast refineries were originally built to handle heavy crude, so Canadian and some Latin American supply suits them well even as domestic shale production has soared.

Where things stand on the ban right now

The White House is moving closer to a 90-day diesel export ban as the Iran war continues to drive fuel prices to new record highs. The legal process is still being worked out, and the prospect has divided the White House, Republicans, and oil industry executives. It would mark the first time the US banned diesel exports since the ban was lifted under former President Barack Obama.

A ban would keep diesel in the US, potentially increasing domestic supplies and lowering prices in the short term, but analysts warn it could drive up global diesel prices and eventually feed higher costs back into the US economy. The Colonial Pipeline is the artery that would carry those consequences from the Gulf refineries to the East Coast, one way or the other.