the lies about the keystone pipeline: Theres been a longstanding assumption in the minds of Americans that more access to oil from North America necessarily means lower gas prices. In 2008, with the drill, baby, drill mantra humming through national politics, Katie Couric (then at CBS) challenged vice presidential candidate Sarah Palin on the link between drilling and prices during her now-infamous interview. More recently, the argument has been made in favor of building the Keystone XL pipeline, set for a vote in the Senate on Tuesday. That assumption, though, is mostly wrong. Or at least, the reality is far more complex. To wit: * Keystone XL pipeline oil wont all stay in the United States. Oil from the pipeline, President Obama said last week, would be extracted from Canadian tar sands, processed and sent through our land, down to the Gulf, where it will be sold everywhere else. That doesnt have an impact on U.S. gas prices. The industry points out that not all tar sands oil heads overseas. There is shipping by rail and truck, as well as an existing (lower capacity) Keystone pipeline thats bringing the product into the United States already. Those shipments have been given some credit for helping to keep American gas prices flat. (We import more oil from Canada than any other country.) The entire point of the pipeline, to Obamas point, is to open up the tar sands to international markets. The difficulty in getting the product to foreign customers has kept prices low — so low that it threatens the viability of extraction in the region. * Theres no direct link between more production in North America and national gas prices. Even if all of the oil from the tar sands came to the United States, the effects would be hard to measure. After all, we have seen a massive spike in oil production over the past few years thanks to the increase in hydrofracturing (fracking) in shale formations in North Dakota, Texas and Oklahoma. But the effect on gas prices isnt one-to-one.
Posted on: Tue, 18 Nov 2014 03:28:24 +0000
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