Keystone pipeline could raise Midwest gas prices by 40 cents

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While the Keystone XL pipeline has stirred plenty of controversy, all consumers can agree that higher gas prices are bad.

According to a recent report by Consumer Watchdog, the Keystone pipeline could increase gas prices in the Midwest by 25 to 40 cents per gallon. The Los Angeles Times explains the pipeline would “allow oil companies in Canada to export crude oil to a range of markets in the U.S. and abroad, leading to possible increases in the prices paid in areas that are already heavily dependent on that oil.”

The Los Angeles Times states that, in a 2010 report, Canadian regulators said they hoped the Keystone pipeline would help Canada "obtain new customers and higher prices for the country's oil." Areas of the U.S., like California, that import very little oil from Canada might see slight price increases, but areas, like the Midwest, that rely on Canadian oil would suffer the highest gas hikes.

The Keystone XL pipeline, if built, would transport crude oil 1,700 miles from Alberta to refineries in the Texas Gulf Coast. Although the controversy is complex, in short, proponents of the pipeline say that it would introduce new jobs and supply the U.S. with a new source of crude oil, and opponents argue that the pipeline could have a hefty environmental impact that first needs to be investigated.

President Obama remarked last month that his decision on the pipeline is hinged upon its environmental impact. Read more here.

Although the pipeline has divided public opinion, in a recent poll, 59 percent of Americans support the pipeline while 28 percent oppose it. Forty-seven percent of respondents answered that the protecting the environment is less important than generating new sources of energy.

The Obama administration is unlikely to make a decision on the pipeline until late this year. Read more here.

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Huron SD  |  July, 17, 2013 at 09:59 AM

How does bringing more crude into the US increase prices. I would think that in the laws of Supply and Demand more Supply would decrease prices. Can someone help me out with this logic?

South Dakota  |  July, 17, 2013 at 10:13 AM

Logic? They don't use logic they use uninformed emotion.

Colo  |  July, 17, 2013 at 11:41 AM

This pipeline will prove to be an environmental disaster. It will leak. They all do. We are constantly told about all the jobs that will be created - they're temporary - once it's built they'll disappear. The only permanent jobs will be running around fixing leaks, and based on past performances, the fixers are pretty slow to show up. This doesn't begin to address the property condemnation. Land owners have no rights, just ask the people in Texas who are already getting run over. The final product refined from this toxic sludge will be sold to China. So, in a nutshell, we screw up our land and water so China can keep poluting the skies above their cities. And Big Oil can make even more money.

SD  |  July, 17, 2013 at 06:40 PM

If opponents to the Keystone XL pipeline were honest, they would do the research and tell us how many oil spills from tanker truck and railroad tanker spills have occured in the USA and Canada in the past ten years. That recent one in Canada was very tragic, wasn't it? Contrast also the amount of oil spilled in those incidences and the amount in modern pipeline (say those built in past ten years, to be fair about it, not just the very old ones, and document how much was spilled in each) spills in same time frame. Fuels are priced based on world markets, are they not? Whether the Canadian oil goes into he world market, or is sold in the USA, it will be distilled here, right? More jobs! Then, there is the fact that the oil from Bakken Formation in ND also will 'ride' that pipeline to refineries even in the north central USA. Some people, especially in our federal government leadership, seem determined to do all possible to hamper energy production, knowing reasonably low priced fuel has been a large driver of financial success of our US citizens. Why would they do that?

SD  |  July, 17, 2013 at 07:00 PM

Aren't oil and fuel prices set on world markets? Adding production to that volume should drop prices, all other factors being equal. Whether it is sold in the USA or elsewhere in the world doesn't seem to make a difference, does it? Refining it in TX, SD, or OK certainly will help jobs in the USA. As will building that pipeline. It definitely will take time to finish it, and jobs in the current market, whether for a few months or a few years, will benefit our citizens. The counties the pipeline passes through will benefit long term due to taxes paid on the land the line passes under, which will be paid by the company. The county roads will be re-built in areas affected by the lines. The land owner will be paid for the land used. And for any disturbance to his/her business. I doubt there is any landowner who wouldn't like to have more people paying taxes in the county their land is in, since there nearly always are more USERS of the services paid for with taxes, than there are tax PAYERS in the county.

VA  |  July, 19, 2013 at 09:02 AM

This article is fundementally dishonest.

Nebr  |  July, 19, 2013 at 10:32 AM

I always get all my investing advice from "Conumer Watchdog" and the LA Times. Thanks to them I deftly avoided crushing market losses in the crash of 2008 -- because their economic advice kept me broke and still does -- they have3 me nicely set to weather the next downturn, too. Why would anyone seek financial insight from CME, Charles Schwab or Morgan Stanley when they can get free unsolicited instruction from anti-industry agenda-driven nutjobs who carry water for the luntic fringe?

B. Erickson    
Wisconsin  |  July, 19, 2013 at 03:18 PM

Very easily. It's not actually bringing more crude into the Midwest. Right now a large portion of our gasoline here in the midwest comes from Canadian tar sand oil. By building Keystone, the oil companies are able to transport the tar sands further South and no longer are forced to sell it in our market. Compounding this is that prices for oil and gas in the US are much lower than they are on the world market. Building Keystone gives oil companies a way to get tar sands all the way to the gulf of Mexico and onto the world market. After all is said and done, more oil might be flowing THROUGH the US, but less of it is going to stay here, and what does stay here will cost more. Logic.

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