New Report Shows Keystone XL Will Raise Gas Prices in U.S. Midwest by 20-40 Cents Per Gallon


Consumer Watchdog ReportA newly released report by the nonprofit group Consumer Watchdog shows that Keystone XL will not decrease gas prices in the U.S., and will actually have the opposite effect: raising gas prices 20-40 cents per gallon in the Midwestern U.S.

How is that possible? The answer lies in the fact that the Keystone XL pipeline is not being built to benefit Americans at all: it’s being built simply to get dirty Tar Sands oil a cheap passage to ocean shipping lanes so that Canada can sell its oil to China and other foreign markets.

Currently, oil extracted from tar sands (aka Bitumen) in Alberta is mostly sold in local markets, like the U.S. midwest, at about $70 per barrel. But if oil companies are able to get that oil out to global markets like China, they can charge $100 per barrel. The Consumer Watchdog report shows that that oil will easily be diverted to higher profit export if the Keystone XL pipeline is built. Losing that less expensive source of oil, the U.S. would see prices higher at the pump as far west as California.

Judy Dugan, the co-author of the Consumer Watchdog report, said, “Any reduction of deliveries to Midwest refineries would crimp gasoline supply, further driving up pump prices, and Keystone XL’s backers want to move cheap oil out of the Midwest. Many major Midwest refineries have also made expensive changes to maximize their use of the tar sands oil and could not operate as efficiently using different grades of oil from other sources.”

Here’s a video explaining more:

Tar sand oil may be the worst environmental disaster mankind has ever unleashed on his fellow citizens and the world. According to author Andrew Nikiforuk, it creates three times as much greenhouse gas to produce one barrel of bitumen as it does for conventional oil. In addition, Nikiforuk writes about the subsidies given to oil companies, both direct and indirect. Part of this is to cover the giant open pit mines often created to extract bitumen: “Canadian taxpayers, who made $150 million [Canadian] in royalties from mining activities between 1966 and 2002, have spent more than $4 billion tidying up scores of contaminated sites”. Further complicating the process is that highly toxic  petroleum coke (petcoke) is a byproduct of refining tar sands oil, and petcoke is among the dirtiest fuels in the world.

Please sign this online petition encouraging President Obama to fully reject the Keystone XL pipeline.

Who is really benefiting?

Keystone’s proponents long insisted that if we didn’t build the Keystone XL pipeline in the U.S., then the oil would simply be shipped through Canada and off to China. That idea was rejected strongly by the British Columbia government in June, which cited the potential despoiling of one of Canada’s greatest natural treasures, the Great Bear Rainforest, home to indigenous communities, Spirit Bears, pristine salmon rookeries, as well as a great number of other natural resources that create jobs and sustenance.

That rejection gave new strength to opponents of Keystone XL in the U.S., who are further bolstered by the lack of evidence of any long term job creation and economic development being promised by oil companies and TransCanada, the company chiefly behind the Keystone XL proposal. This lack of proof of long term economic benefit, coupled with potentially very substantial environmental destruction, and higher gas prices for U.S. drivers is all covered in the Consumer Watchdog report (which you can download here in PDF form).

And, as it turns out, the main beneficiaries of any construction on Keystone XL will be the Koch Brothers (who regularly buy and sell politicians, lobby against renewable energy, and promote anti-sustainability efforts in higher education), ExxonMobil, Shell, ConocoPhillips, Chevron, and others.

None of whom need any more money. Here’s a graphic from the report showing who owns the Tar Sands, and who owns the Gulf Coast refineries. It this picture doesn’t tell a thousand words…

tar sands oil and pipeline owners: Koch Brothers

This article was supported by Social Stream Media, LLC

About the Author

Scott Cooney (twitter: scottcooney) is an adjunct professor of Sustainability in the MBA program at the University of Hawai'i, green business startup coach, author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill), and developer of the sustainability board game GBO Hawai'i. Scott has started, grown and sold two mission-driven businesses, failed miserably at a third, and is currently in his fourth. Scott's current company has three divisions: a sustainability blog network that includes the world's biggest clean energy website and reached over 5 million readers in December 2013 alone; Pono Home, a turnkey and franchiseable green home consulting service that won entrance into the clean tech incubator known as Energy Excelerator; and Cost of Solar, a solar lead generation service to connect interested homeowners and solar contractors. In his spare time, Scott surfs, plays ultimate frisbee and enjoys a good, long bike ride. Find Scott on
  • grammarian

    too many typos in this article!

    • Jo Borras

      Way to focus on the important part …

    • Scott Cooney

      I think this comment is actually spam…I wrote this article, am an author published with McGraw-Hill, and a grammar nazi with a grammar rod up my butt. I just re-read the article, and with the exception of “None of whom need any more money.” being a deliberate fragmented sentence, there’s not a grammar mistake in here that you wouldn’t also find in or other high level web pubs. Probably just another right wing nutjob with nothing more important to say trying to distract from the facts.

  • This article smells of propaganda…. the pipeline would be good for both Canada and the USA.

    • Jo Borras

      Your comment smells of ignorance and bulls***, but I think everyone else was too polite to tell you.

    • Gabriel Stinson

      Troll or ignoramus, both equally bad.

    • Scott Cooney

      Hi Tom,
      I respect your opinion, but it’s just that, an opinion. Back it up with some facts. The facts of this report, and many others like it, show that Keystone will have no lasting economic benefit, and definitely has lasting environmental and health effects that are quite negative.

  • Ziv Bnd

    If XL isn’t built, then the oil will be shipped to China via BC. Nothing else changes. The US gets a piece of the action or not. The carbon footprint is the same, or worse due to the fact that refineries in China are not even close to as clean as the ones in the US, plus the price of gasoline will be same for most of us regardless.

    The only loser if the XL isn’t built is the US. Jobs in Louisiana and along the XL route, or jobs in China. You choose.

    • T Adkins

      A pipe line thru BC would be cheaper, faster, shorter, and most likely more profitable to the ‘Oil Sands Industry’. BC doesn’t feel the risk is worth the reward and has said no to a pipeline multiple times. A longer pipeline thru the US is not their first choice.

      When the currently existing Keystone pipeline was built from Canada to the US Mid-West it was guaranteed by the builders to have on the average of 1 spill in 10 years. They were very very wrong in their estimate it has had over 12 spills in just 1 year or the equivalent of over120 years of spills in just 1 year. Now they want to make a bigger longer pipe thru sensitive land for farming and drinking water. On top of the wonderful spills is they have no idea how to clean up the mess of this synthetic crude that has never existed before.

      As for the China refineries you are very correct China’s refineries are not up to the task so pipeline or not the US will be doing the refining the US has the infrastructure and upgraded systems to do the refining we already refine gasoline for China and the ultra low sulfur diesel for Europe. The US will refine this very heavy crude while the lighter stuff on the scale can be done elsewhere.

    • Scott Cooney

      It’s clear that that’s not the case, as I said in the article. They of course wanted to go the BC route first, but it ain’t happenin’. They have had less ability to sway voters in BC, and are relying on a huge money PR campaign in the U.S. to get us to give them what they want.

  • Markwbrooks

    I am sorry, but I just cant let this one slide by. I got to tell you that you have a typical American first bias that missed the key facts. Thousands of in-situ wells in the Oil sands are being drilled and then capped. These wells are being drilled now to take advantage of the tax incentives provided by the Alberta and Canadian governments that are being phased out by 2017.
    They will remain capped, waiting for the price of oil to make them economically viable. This can be assisted by reducing transportation costs (increasing export pipeline capacity) or by the growing internal demand. If this oil is to be exported, fine, but given that it is partially subsidies by the Canadian tax payer, that tax payer wants to hear that there is a good political or economic reason for it.
    The Oil sands was created with the help of over $50 billion of Canadian Tax payer incentives over 15 years. This oil is to insure Canadian energy independence for the next century or more.
    Please explain why it should be exported at any price?

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  • Barry from Kenya

    The comments displayed from the assorted high school freshmen below is certainly amusing but a shadow on our educational system

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