TransCanada has told us their Keystone pipeline system will be "good for America, good for South Dakota." Unlike certain big-energy mouthpieces, I have challenged that marketing assertion.
Now the National Wildlife Federation finds industry documents that prove the Keystone pipelines are "little more than a shell game designed to reduce Canadian oil supplies in America's Midwest and increase prices by as much as 15 cents a gallon."
NWF breaks down the scheme for us:
Step 1: Divert Canadian Oil from the Midwest to Texas — TransCanada is trying to overcome what they call an "oversupply" of Canadian oil to America's Midwest, which is currently the destination of most Canadian tar sands oil. This leads to cheaper oil prices (the oil companies call it a price "discount"), and Canada's oil producers don't like it. They are working with Valero and other oil companies to build the Keystone XL pipeline as a bypass around the Midwest, diverting as much as 500,000 barrels of Canadian oil daily to the port refineries in Texas. Nobody can say where it will go from there. America is increasingly becoming the "middle man" in the global oil trade &ndash we import vast amounts of crude oil, refine it, and increasingly export refined oil products like gasoline and diesel to foreign destinations including Mexico, South America, Europe, and China. 72% of these exports originate in Texas and Gulf Coast refineries, where exports have doubled in the past 5 years.
Step 2: Increase Oil Prices to the Midwest — As Canadian oil imports are shifted from the Midwest to Texas, oil supplies to Midwest refiners will decline. According to TransCanada's analysis: "Midwest demand for Canadian heavy crude would exceed the available supply and the market price ...would be approximately $6.55 per barrel above the 2008 price." $6.55 per barrel is roughly equal to 15 cents per gallon [Jeremy Symons, "Big Oil's Pipeline Scheme to Increase Middwest Gas Prices," National Wildlife Federation: Wildlife Promise, 2011.01.24].
Note that this very deliberate plan to divert oil from the Midwest to Gulf port refineries supports speculation that the real customer for Keystone XL's tar sands oil may be China, not the U.S.
TransCanada's baloney should be obvious to everyone. They aren't building this pipeline to make life better for anyone in South Dakota or America. They are building this pipeline for the same reason any corporation takes any action: to raise its profits. And they will do it on our backs with bogus promises of more cheap oil.
p.s.: $6.55 more per barrel. Hmm... so if South Dakota imposed a ten-cent-per-barrel pipeline tax, we'd only be taking 1.5% off the increased revenue TransCanada anticipates. Anyone care to invite TransCanada to fix the state budget deficit?
Here's another perspective.