Yet More Proof That Keystone XL Won't Reduce Gas Prices

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There are four days left to submit a public comment to the State Department on the Keystone XL pipeline. As weโ€™ve reported time and time again here on DeSmogBlog, the proposed Keystone XL tar sands pipeline would not improve Americaโ€™s energy security as proponents of the pipeline insist. Nor would completion of the pipeline reduce gas prices here in America, another commonย claim.

Over a year ago, when the State Department was turning down TransCanadaโ€™s first bid, we took a look at why and how Keystone XL wouldnโ€™t reduce gas prices here in the U.S.

This week, Public Citizen released a reportย that piles on a whole lot more evidence to support this fact. In fact, it makes a rock solid economic case that construction of the pipeline would almost certainly result in an increase in gas prices in the American Midwest. An increase.ย 

For the report, titled โ€œAmerica Canโ€™t Afford the Keystone Pipelineโ€ (PDF download here),ย Public Citizen analyzed an abundance of data and found that average U.S. gas prices over the past year would have been as much as 3.5-percent lower had there not been any exports of oil. Because Keystone XL would primarily be an export pipeline (as weโ€™ve reported again and again, and as Canadian Energy Minister Ken Hughes has recently admitted), all evidence points to the fact that construction of the pipeline would actually increase gasย prices.

Hereโ€™s a quick rundown of the reportโ€™s mainย takeaways.

  • By diverting oil from the U.S. market, the Keystone XL pipeline is likely to increaseย gasoline prices for consumers, a reality directly at odds with proponents’ claims thatย the pipeline will tamp down rising gasย prices.
  • By diverting tar sands from the Midwest refineries, the Keystone pipeline is likely toย have particularly significant impacts on prices in the Midwest. TransCanadaย documents indicate that generating a higher price for tar sands oil is a primaryย purpose of the pipelineย project.
  • A Public Citizen analysis finds that, absent increased exports of refined gasoline,ย average U.S. gasoline prices over the past year would have been as much as 3.5ย percent lower. The Keystone pipeline will intensify the trend of increasing exportsย relative to domestic supply, putting further upward pressure on consumerย prices.
  • Because the Keystone XL pipeline is designed to promote exports of refined tarย sands oil, it will, if anything, reduce national energy security. This directlyย contradicts the claims of pipeline proponents, who routinely state or imply that theย pipeline will increase U.S. energyย security.
  • Further confounding claims that the pipeline will advance U.S. energy security isย rapidly increasing Chinese national government interests in Canadian tar sands.ย China has every right to undertake its investments in Canadian tar sands, but thoseย investments do not advance U.S. energyย security.

So much for the lowering gas prices and increased energy security talking points. But what of the State Departmentโ€™s dubious claim that Keystone XL was โ€œunlikely to have a substantial impactโ€ย  on climate change? Oil Change International pretty much shredded that argument this week in a report of their own, โ€œCooking the Books: How the State Department Analysis Ignores the True Climate Impact of the Keystone XL Pipelineโ€

The key takeaway from that report: In a single year, the pipeline will add as much carbon dioxide to the atmosphere as all the cars in California, Washington, Oregon, Florida, Michigan, and New Yorkย combined.

So, yeah, sounds like a โ€œsubstantial impactโ€ toย us.

Again, the State Department is accepting comments on the Keystone XL up until April 22. Never submitted a public comment before? 350.org has a really handy tool that lets you plug in your own facts and talking points, and they hope to gather at least 1 million comments byย Monday.ย 

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Ben Jervey is a Senior Fellow for DeSmog and directs the KochvsClean.com project. He is a freelance writer, editor, and researcher, specializing in climate change and energy systems and policy. Ben is also a Research Fellow at the Institute for Energy and the Environment at Vermont Law School. He was the original Environment Editor for GOOD Magazine, and wrote a longstanding weekly column titled โ€œThe New Ideal: Building the clean energy economy of the 21st Century and avoiding the worst fates of climate change.โ€ He has also contributed regularly to National Geographic News, Grist, and OnEarth Magazine. He has published three booksโ€”on eco-friendly living in New York City, an Energy 101 primer, and, most recently, โ€œThe Electric Battery: Charging Forward to a Low Carbon Future.โ€ He graduated with a BA in Environmental Studies from Middlebury College, and earned a Masterโ€™s in Energy Regulation and Law at Vermont Law School. A bicycle enthusiast, Ben has ridden across the United States and through much ofย Europe.

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