Published on July 17th, 2013 | by Scott Cooney17
New Report Shows Keystone XL Will Raise Gas Prices in U.S. Midwest by 20-40 Cents Per Gallon
A 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.
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…