Press "Enter" to skip to content

TransCanada Responsible for High Gas Prices, But Not Its Own Oil?

Last updated on 2011.06.22

Hat tip to Great Plains Tar Sands Pipelines!

The South Dakota press remains silent on this story, but the Minneapolis Star-Tribune has picked up the story that TransCanada's Keystone XL tar sands oil pipeline would raise fuel prices in the Midwest. This conclusion comes Philip K. Verleger, an economics professor and oil market specialist. Says Dr. Verleger of the Keystone XL backers:

The firms involved have asked the U.S. State Department to approve this project, even as they've told Canadian government officials how the pipeline can be used to add at least $4 billion to the U.S. fuel bill.

...Of course, American consumers will pay the price of this highway robbery. Food prices will rise because they reflect farm operating costs.

In addition, millions of Americans will spend 10 to 20 cents more per gallon for gasoline and diesel fuel as tribute to our "friendly" neighbors to the north [Philip K. Verleger, "If Gas Prices Go up Further, Blame Canada," Minneapolis Star-Tribune, 2011.03.13].

Dr. Verleger incorrectly states that pipeline opponents have to date ignored TransCanada's plan to manipulate the Midwest market and raise our gas prices. Ahem. The Madville Times, for example, discussed this story in January. But let's not quibble over details; we're glad to have the professor on board.

Dr. Verleger acknowledges that Keystone XL could "moderate the impact of supply disruptions." However, the professor argues that we already have the strategic oil reserve for that purpose. He calls Keystone XL "an insurance policy of little value" that allows Canadian oil companies to tax American consumers and farmers.

Meanwhile, I find a frightening statement about TransCanada's view of its responsibility for the hundreds of thousands of barrels of tar sands oil it ships across our fair prairie daily. Texas CBS affiliate KCEN asked TransCanada some hard questions about possible leaks and defective steel on the Keystone pipeline last December. Check out TransCanada spokeman Terry Cunha's responses:

Cunha says they'll continue to use Welspun for pipe laid in Texas. TransCanada continues to insist that its plans are safe. This, despite several major reports that say that's not true.

"Where are all these people going wrong in saying this is dangerous?" we asked Cunha via phone.

Cunha's response was "I don't know, and I couldn't speculate."

We've also learned Keystone XL will use a leak detection system called SCADA. It's the same system that caused the Enbridge Pipeline Company to overlook a massive leak in Michigan for 12 hours last summer. That leak dumped nearly one million gallons of crude into the Kalamazoo River before they caught it.

"This talks about data that's difficult to interpret in a system that I assume is markedly similar to the one you'll be using," we said to Terry Cunha.

"Oh, I couldn't comment on the reports or definitions of their system versus ours," Cunha said.

After almost every question, Cunha fell into a standard response. He said TransCanada is not an oil company, and they're not responsible for what goes through their pipes [emphasis mine; Field Sutton, "TransCanada Responds to Questions over Tar Sands Pipeline Safety,", 2010.12.22].

Not responsible for the corrosive high-pressure goop coursing over our water supplies in potentially leaky pipelines? (Wait: did I say potentially?) Did TransCanada mention its non-responsibility for the oil it ships when it lobbied against the pipeline tax in the South Dakota Legislature?

Take heart, fellow petroleophobes: TransCanada has postponed a transmission line project in Nebraska by sixteen months, to October 1, 2012. TransCanada needs those 74 miles of power lines to power three Keystone XL pumping stations in Nebraska. Secretary of State Hillary Clinton has yet to approve the permit Keystone XL needs to start laying that hypotenusal pipe across the Great Plains to make the Koch Brothers even richer (see? everything fits together). Every day we can delay this costly, dangerous, unnecessary pipeline is a victory.