Alex Pourbaix

Wed, 2012-01-18 11:11Ben Jervey
Ben Jervey's picture

Keystone XL Pipeline Would Increase Oil Prices in Midwest

Twitter is ablaze with the news that the State Department will announce today that the original TransCanada presidential permit application is dead in the water. Details are murky, so stay tuned for more, but what this likely means is that the State Department will allow TransCanada to re-apply for the permit with a new route that avoids the heart of Nebraska's Ogallalla Aquifer.

While it's good to see that President Obama is standing up to oil industry bullying and Republican pressure to fast-track the permit, this still means Keystone XL is very much in play. If it's ever built, Keystone XL will allow the expansion of the Alberta tar sands that climate scientists worry will send us down a dangerous path of global warming pollution. 

What's more, the Keystone XL tar sands pipeline, if built, would increase oil prices in the American Midwest. That’s the shocking takeaway point from a bombshell report about Keystone XL as an export pipeline released today by the Natural Resources Defense Council and Oil Change International.

We’ve reported time and time again here on DeSmogBlog, the proposed Keystone XL tar sands pipeline would not improve America’s energy security, but never has that reality been more clearly conveyed than by this one real-world point that is worth repeating. The Keystone XL tar sands pipeline would increase oil prices in the Midwest.

To understand how, exactly, an increased supply of oil to America could increase oil prices domestically, you have to understand two things about the Keystone XL pipeline.

First, Keystone XL is is an export pipeline, funneling foreign crude through American soil to Gulf refineries that will profit most by processing the low-grade tar sands crude into diesel to sell to the booming international market.

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