Study Finds Keystone XL Will Raise Gas Prices

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One of the most common arguments for exploiting the Canadian tar sands and building the Keystone XL pipeline is that it will make the US more energy independent and reduce fuel costs. Challenging this view is a new report (pdf) released today by Consumer Watchdog that finds that the pipeline will instead raise gasoline prices by 20 to 40 cents per gallon in the Midwest:

The report finds 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.
  • 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.

Yesterday, I wrote about how a study published by the National Academy of Science that concluded transporting tar sands oil via pipeline would not increase the likelihood of spills was seen as a boon for supporters of the Keystone XL project. However, concerns have been raised about the lack of new research that went into this study, as well as the failure to consider how tar sands oil spills are harder to clean than conventional crude.

President Obama has stated that he will not approve the pipeline project if it will lead to "a net increase in greenhouse gas emissions," but aside from the climate change issue, this Consumer Watchdog study strikes a blow against one of the central economic arguments for the pipeline and gives citizens additional reason to oppose the project.

Here's a video that was released today along with the study:

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