Folks who tell you we need to let TransCanada build the Keystone XL pipeline to increase our supply of safe North American oil are not paying attention to the true intent of the pipeline. Keystone XL will decrease the supply of oil in middle America:
Traders have long bet that infrastructure bottlenecks at Cushing, Oklahoma, which prevent surplus oil supplies from flowing to the Gulf Coast, will eventually be alleviated.
Two big proposed pipelines, TransCanada's Keystone XL and the Double E, have the potential to start clearing the crude oil glut in the middle of the North American continent from 2013, if everything goes according to plan [Robert Campbell, "Keystone, Cushing, and Fixing the Oil Market," Reuters, 2011.06.20; backup links at CNBC, Xe, and VanSun].
Oil glut. Gee, when you pay $3.50 a gallon at the pumps, do you feel like there's too much oil in our market?
Campbell makes clear that the main reason traders want Keystone XL and other tar sands pipeline projects is to close the price gap between West Texas Intermediate and Brent crude and satisfy "every oil producer in Canada dreaming of triple-digit crude prices."
In other words, the business case for Keystone XL rests on increasing oil prices.
So the next time the Big Oil lobby and the legislators in its pocket tell Keystone XL will lower our prices at the pump, recognize that they are lying to you.
Bonus Rebuttal: Campbell also notes that we don't even need Keystone XL:
The irony of all of this is that Keystone XL is not needed, or at least not now. Keystone XL is designed as a "bullet line" that will mainly ship oil directly from Alberta to Houston.
But export capacity from Western Canada is expected to remain in surplus until sometime after 2020, according to a study prepared by EnSys for the U.S. State Department [Campbell, 2011.06.20].
I don't quite follow... (Regardless of whether WE would ever see a drop in price) I would assume that the pipeline is a cheaper, easier solution than what they're doing now (resulting in lower overhead per barrel)... or it gets more oil into markets this group couldn't reach before (increased competition and supply). Otherwise they wouldn't build it... right? My take on the article is that traders were betting on cheaper wholesale prices on the horizon, but are now worried the pipeline might not happen. In that context "clearing the glut" seems to refer to solving a distribution problem, not literally reducing supply. But I'm genuinely asking; I'm okay being corrected on this one.
Adam, from what I've read, Keystone XL reduces supply available in the Midwest and raises our gasoline prices 10 to 20 cents per gallon. I'll agree that the global supply isn't reduced, but supply is shifted out of our tanks and out to the global export market. TransCanada wants South Dakota, Nebraska, and other Great Plains states to host the risks of a pipeline from which those states will profit little.
Gotcha - you're saying "we" (Midwest) lose by shipping more oil further South (and beyond). My bad, I was looking at the wrong scale - US as a whole. But couldn't we just collect what spills out of the pipe and process it ourselves?! (Leak? What leak?)
Leak? Heck, I've thought we should impose a condition on the pipeline that yes, you can run through our farmland and aquifer, but you have to place taps every ten miles where locals can come fill up their own barrels with free oil (assuming, of course, that folks around here could refine that oil in their garages to useful gasoline).
Given the profits TransCanada will make, we are at least entitled to a ten-cent-per-barrel tax to make up for the risk we bear and the higher prices we'll pay.
The initial impact statement on CD showed the intention to connect XL to the Gulf ports. It may have been buried in maps. I have not looked at the CD since I put it together with a useable menu however.
The problem for most of us in South Dakota is having a bunch of county commissioners who are easily snowed by corporate crap and blinded by "all" the property tax revenue they are told will be theirs to squander.
Just announced: http://bsnorrell.blogspot.com/2011/06/environmental-leaders-call-for-civil.html
Tarmageddon begins: http://northernrockiesrisingtide.wordpress.com/