Keystone XL Critics Warn Pipeline Would Push Up Midwest Gas Prices

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A Consumer Watchdog report released Tuesday said Keystone XL would push retail gasoline prices 20 to 40 cents a gallon higher if approved, with prices spiking most in the Midwest.

If built, Keystone XL would cut the discount  Canadian oil now sells for in relation to international  benchmark crudes, the group said.

Midwestern drivers would be the hardest hit because their region imports more than half of its oil from Canada, the report said.

That Canadian oil would likely be diverted elsewhere through Keystone XL pipeline system, reducing supplies available to Midwest refiners, the report said.

As proposed, Keystone XL would carry oil from Hardisty, Alberta, to Steele City, Neb. and from there connect with existing lines and lines under construction to carry crude to Gulf of Mexico refiners.

The controversial pipeline, because it straddles the Canada-U.S. border, is under State Department review. A decision on whether to approve the line is expected by the end of the summer.

Environmentalists fear Keystone would accelerate the development of Canada’s tar sands, a far dirtier source of fuel than most hydrocarbons, and cut through environmentally fragile parts of the United States.

Supporters say building the pipeline would enhance energy security by reducing U.S. reliance on oil from politically unstable countries. It would also create jobs.

Crude imports from Canada could reach 4 million barrels a day by 2020, double what the U.S. currently imports from the Persian Gulf, trade group American Petroleum Institute said on its website.

Follow Claudia Assis on Twitter @ClaudiaAssisMW

Follow Energy Ticker on Twitter @EnergyTicker  

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