YORK — The Keystone XL pipeline will raise gasoline prices in the United States, hiking prices at the pump 20 to 40 cents per gallon in the Midwest, with no long-term economic benefit to the U.S. economy, says a new report by Consumer Watchdog.
The independent agency’s report, released this week, concluded that the “Midwest’s gas prices could increase anywhere from 20 to 40 cents per gallon if the Keystone XL goes through.”
The Watchdog report found that:
* “Drivers, especially in the Midwest, would pay 20 cents to 40 cents more at the pump if the disputed pipeline were built, as the current discount of up to $30 a barrel for Canadian oil disappears if the Keystone XL is built.
* “The true goal of multinational oil companies and Canadian politicians backing the pipeline is to reach export outlets outside the U.S. for tar sands oil and refined fuels, which would drive up the oil’s price.
* “With U.S. oil production rising fast, any ‘energy security’ benefit for the U.S. would vanish as American oil output exceeds that of Saudi Arabia in about 2020, according to the International Energy Agency.”
The report, produced by Research Director Emeritus Judy Dugan and independent energy analyst Tim Hamilton, utilized existing industry data, public records and company documents.
“Keystone XL is not an economic benefit to Americans who will see higher gas prices and bear all the risks of the pipeline,” said Dugan. “The pipeline is being built through America, but not for Americans.”
Dugan explained in a conference call on Tuesday morning that since over 50 percent of the Midwest’s gasoline comes from Canadian oil, if the price were to jump $30 a barrel, the Midwest would be hit the hardest, seeing gas prices jump 38 cents per gallon.
Thomas Steyer, an American businessmen said, “A vote for Keystone is a vote to raise gas prices on Americans and send the profits to a foreign oil company.” Steyer added that the nearly 40 cents per gallon increase is nothing more than a “foreign company tax,” adding “You still get the same as you already do, one gallon of gas, but the extra 40 cents will now go to Canadian tar-sand oil owners.”
The report indicated if the Keystone XL is approved, the current price of the tar-sand oil, which is selling for $30 less than similar imported oil, will increase, and the increased refinery costs will be reflected in higher gasoline prices.
Although the greatest impact to gas prices would be in the Midwest, states such as California would also see increases of nearly 10 cents a gallon.
“Any reduction of deliveries to Midwest refineries would crimp gasoline supply, further driving up pump prices, and Keystone XL’s backers want to move cheap oil out of the Midwest,” Dugan said. “Many major Midwest refineries have also made expensive changes to maximize their use of the tar sands oil and could not operate as efficiently using different grades of oil from other sources.”
Consumer Watchdog states, “The conclusion of the report is U.S. consumers should be wary of the Keystone XL pipeline — not just for substantial environmental and safety reasons — but because it threatens their wallets. Given the fleeting benefits of construction jobs, the un-provability of long-term benefits and the negative effect of higher gasoline costs on consumers, Keystone XL is no economic boon to the United States. U.S. consumers and the overall economy would bear the substantial risks of the pipeline without measurable permanent benefit.”