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Frances Beinecke

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Keystone XL Tar Sands Pipeline Won't Ease Gas Prices; Senate Must Reject It

Posted: 03/ 7/2012 10:50 am

This week the Senate is likely to vote on an amendment that would force approval for the Keystone XL pipeline. President Obama already rejected the dirty tar sands pipeline because it needed a more thorough safety and environmental review.

Yet instead of allowing engineers, public safety, and other experts to assess the pipeline's sweeping impacts -- on American communities, drinking water supplies, and the stability of our climate -- this amendment would let the politicians in Congress decide what is safe.

It would bypass our nation's long-standing environmental review process and give Congress the unprecedented authority to hand out permits on massive projects.

This amendment, sponsored by Senator John Hoeven (R-ND) and attached to a largely sensible, bipartisan transportation bill, is bad for government process and worse for America's national interest.

Pipeline supporters and their allies in Congress are trying to capitalize on rising gas prices by claiming the pipeline would lower prices at the pump. That is patently false.

The company behind Keystone XL, TransCanada, has admitted the pipeline would increase the price Americans pay for Canadian oil by up to $4 billion a year. It's no wonder oil companies want to build it.

In 2009, TransCanada told the Canadian government that Keystone XL is meant to relieve the oversupply of oil in the Midwest. By diverting oil to ports in the Foreign Trade Zone in the Gulf of Mexico, the pipeline would cause oil prices to rise in the Midwest, which will likely mean consumers will pay more at the pump for their gasoline.

In other words, in addition to all the other forces driving up gas prices -- tensions with Iran, supply disruptions in Libya and Sudan, a tripling of cars in China in the last five years -- Republican lawmakers support a project that could increase gas prices even further for millions of Americans.

Importing oil from Canada has never helped America get off the oil price rollercoaster. Over the last 11 years, the amount of oil we bought from Canada increased 50 percent, yet gas prices have tripled over that same period, with ups and downs along the way.

America cannot control the long-term price of oil; it is set on a global market and shaped by global forces. But we can reject a dirty pipeline that would increase oil prices in the Midwest. And we can shield ourselves from future price hikes by embracing real transportation solutions.

Proven solutions like cleaner cars, sustainably grown biofuels, bus rapid transit and light rail systems, bike and pedestrian-friendly policies, and other transit options can end oil's monopoly on our economy and put money back in our pockets.

Smart policies can achieve that. President Obama has raised fuel economy standards to 54.5 miles per gallon by 2025. Within 20 years, better-performing cars will save drivers more than $80 billion a year at the pump while cutting our oil use by more than we imported from Saudi Arabia and Iraq in 2010.

Americans want these better performing cars. A Consumer Reports poll found that 80 percent of consumers agreed that "fuel economy standards should require auto manufacturers to increase the overall fleet average to at least 55 miles per gallon by 2025."

Drivers welcome these cars because they will save money. The Keystone XL pipeline offers no such benefits. Instead, on top of raising oil prices, it would fuel the destruction of Alberta's ancient Boreal Forest and threaten communities, water supplies, and farm lands along the entire pipeline route. And because producing tar sands oil produces three times as much global warming pollution as regular crude, it would intensify extreme weather and other hallmarks of climate change.

Climate change, pipeline oil spills, contamination of drinking water. This tar sands pipeline has grave implications that warrant careful consideration, not hasty political decisions.

President Obama already determined that the Keystone XL tar sands pipeline needs more review. The Senate must oppose any amendment to approve the Keystone XL tar sands pipeline. Congress must stand for accountability to public safety and the environment, not for higher profit margins for oil companies.

Click here to tell your leaders they must not play politics with a dirty energy project when the safety of our communities, farms, waters, and climate are at stake.

This post originally appeared on NRDC's Switchboard blog.

 
This week the Senate is likely to vote on an amendment that would force approval for the Keystone XL pipeline. President Obama already rejected the dirty tar sands pipeline because it needed a more th...
This week the Senate is likely to vote on an amendment that would force approval for the Keystone XL pipeline. President Obama already rejected the dirty tar sands pipeline because it needed a more th...
 
 
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HUFFPOST SUPER USER
windwolf
07:06 PM on 03/08/2012
The truth is, even if Keystone was up and running today, it wouldn't eased our grossly inflated gas prices. Why? Because right this moment we're at full domestic production, and most of it is being sold and shipped to South America, of all places. I'm sure huge booming Brazil is getting much of it, at the expense of us passive consumer auto commuters.
02:34 PM on 03/08/2012
Here come the "speculators drive up the price of oil" conspiracy theorists. Of course, they are wrong. Most of the speculator studies have not utilized sound economic data in supporting their theory. Do they effect pricing? yes to some degree, but most data shows that market fundamentals are the basis for gas prices rising and falling.

http://www.dallasfed.org/research/eclett/2011/el1111.html

Don't believe the speculator theorist hype.
05:36 PM on 03/08/2012
Will speculation effect the price of oil, yes ... yes it will. Will it be responsible for the rise in prices, no not really ... demand is going up world wide and as demand rises the price will go up; people will speculate a little on the price of oil and push it a little higher but mostly it will be demand that drives the price of oil up.

And, it doesn't look like world wide demand is going to go down anytime soon ... my advice, find something else to run your car on.
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HUFFPOST SUPER USER
grappler1987
Heaven is a gift, not a reward
09:59 AM on 03/08/2012
"By diverting oil to ports in the Foreign Trade Zone in the Gulf of Mexico"

Funny, all of America is a FTZ for Canada. Why? NAFTA. Any mention of FTZs is dubious.
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HUFFPOST SUPER USER
missouriwatcher
military veteran, veteran teacher, father, grandpa
10:36 AM on 03/08/2012
Exactly so! fanned and faved
10:40 PM on 03/07/2012
The dishonesty of this statement deserves rebuke.

"The company behind Keystone XL, TransCanada, has admitted the pipeline would increase the price Americans pay for Canadian oil by up to $4 billion a year. It's no wonder oil companies want to build it."

$4B per what? What this says is that up to $4B of Canadian crude would be piped into the US each year. How many gallons is that exactly? What price per bbl will be paid for this oil? That is what matters, not the total cost. All that oil will do is replace imports from other places like the Middle East. Where would you like to pay your $4B? To some hostile Islamists, Hugo Chavez or the Canadians? That's an easy one for me. How about you?
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HUFFPOST SUPER USER
ddeanfountain
I think micro-bios are overrated!
12:38 AM on 03/08/2012
"The dishonesty of this statement deserves rebuke."

Did you read the same article as I did? Where did you get this warped logic? The reason for the 4$B increase is the oil would be made available for export. As has been reported recently by the HP, gasoline has now become this nations largest exported product which has driven up prices further and by piping additional supplies to the "Foreign Tax Zone" thru the XL would simply make additional oil supplies exempt from US taxes while increasing the amount processed for sale to other foreign countries to increase profits in countries with higher fuel prices.

According to HP reports, we import almost 51% of the oil we use daily. Canada and Mexico supply almost 40% while the remainder comes from the middle East, primarily Saudi Arabia. $4B per what you ask! Try an additional $60+ a year for every family living in the US.

Oh by the way...less than of 1% of the oil we consume comes from Chavez but he certainly uses our refineries because no other country has the refinery capabilities to refine the heavy Venezuelan crude. So if anything, Mr Chavez actually creates jobs in this country!
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HUFFPOST SUPER USER
grappler1987
Heaven is a gift, not a reward
10:02 AM on 03/08/2012
Funny, the Department of Energy disagrees with you. Canadian oil will offset imports from the Middle East according to the DOE.

Plus, any mention of FTZ is dubious. Canada is part of NAFTA. All of America is an FTZ for Canada.
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HUFFPOST SUPER USER
Ruta Victoria Jodis
Spin does not = TRUTH, send more facts!
11:36 PM on 03/11/2012
Soooo Chavez possibly creates what - 1% of the jobs as well in the US? or more? Where are all these refineries located? Pipelines are bad but refineries are good??
How many jobs has Chavez "created?" Your terminology amazes me.

Im sure some of the XL oil could be used here in the US as well as for export. But only if all involved had any common sense...
my favorite tho is you ost scare tactic:
$60.000 a year ( per family)
hmm...divided by 12= 5000 a month- what does THIS figure mean exactly??? LOL
ThinkCreeps
Seriously, it's time.
07:19 AM on 03/08/2012
A 0.5 million barrel per day increase in oil shipped from Canada means an increase of up to about $20bn a year of Canadian oil paid for in the US. The cost of extracting that oil to Canada is about $13bn.

Any local price rise at the pump near the pipeline would be due to refining less in the midwest, and needing to ship it back. Overall, it would lead to a modest easing of the price of oil in the US, likely due to favorable long-term contracts for the price, Canada having no other choice for exporting or consuming the oil. The issue is that the exporters can't accept less than about $70 per barrel, otherwise they lose.
09:37 PM on 03/07/2012
NRDC and Ms. Beinecke continue to exhort the falsehood of widespread groundwater contamination associated with an operational crude oil pipeline. Yes there would be a localized plume if the leaked product actually reaches the water table, but no reasonable scenario would EVER develop into a regional aquifer problem. NRDC is a propaganda mouthpiece preying on the earth science illiterate.
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HUFFPOST SUPER USER
Robert Lee Harrington
I'd Love To Change The World..
06:06 AM on 03/08/2012
Spill from Hell:

...a 30-inch pipeline owned by Calgary-based Enbridge Energy Partners burst and disgorged an estimated 843,000 gallons of thick crude into a tributary of the Kalamazoo River...the first ever major spill into water of diluted bitumen from the Alberta oil sands.

...The local residents and EPA responders near Kalamazoo quickly learned that bitumen and diluent do not stay together once released into the environment. Volatile portions of the diluent containing toxic fumes of benzene and toluene began off-gassing in the area, impacting the health of almost 60 per cent of the local population with symptoms such as nausea, dizziness, headaches, coughing and fatigue. Clean-up crews were issued respirators to protect them from toxic fumes.

Local residents...smell the fumes up to 50 kilometres away. The local health department...instituted a voluntary evacuation within about one mile of the river to limit people's exposure to benzene fumes -- a known carcinogen...Twenty months after the spill these expensive recovery efforts continue, and 30 miles of the Kalamazoo River impacted by the spill remain closed to swimming, boating, fishing or even wading for the foreseeable future...

Enbridge now estimates...the bitumen spill will cost more than $720 million...the average clean-up cost for heavy crude of $18.95 per litre. The Kalamazoo spill has so far cost over 10 times that much...

http://thetyee.ca/News/2012/03/05/Diluted-Bitumen/
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HUFFPOST SUPER USER
Ruta Victoria Jodis
Spin does not = TRUTH, send more facts!
11:15 PM on 03/11/2012
its terrible and unfortunate when you have such a spill. However I dont think they are deliberately planned but neither are tornadoes, hurricanes earthquakes and other disasters. Maybe we should stop driving and flying, go back to horse and buggy, or further to mus and cave dwellings, throw out our satellite dishes computers and cellphones, and grow all our own food; Petroleum products are used just about everywhere in the modern world. The more control we have over them the less we have to depend on others. And all this transporting across the globe? Please dont tell me THATS GREEN either!
09:21 PM on 03/07/2012
Letting the pipeline be built will cut Co2 and a faster method of it getting to the US. and will Help us force Opec to rethink there pricing . Putting the hurt on Opec or completely cutting Opec out .
And tap in to our own resources would bring the price down .
09:14 PM on 03/07/2012
Get rid of Opec . Drill our own oil crack in to shale oil . Tree huggers and EPA let them build new Refinery's Here the price will drop and make the same types of fuel for all the states . Force Opec to rethink there Prices .
02:38 PM on 03/08/2012
You obviously don't know how much it costs to extract oil from rock. We can do it, but your price of gas will rise, not fall.
05:46 PM on 03/08/2012
Your idea would work great if the US was the only customer of OPEC but it is not. China is becoming a voracious consumer of oil and that appetite is only going to grow. Not to mention you are ignoring the fact that the US consumes about 18 million barrels of oil a day, and we only produce 5 million barrels of oil a day. We'd have to increase our production what roughly 260%?
07:46 PM on 03/07/2012
What is wrong with the dems on this one? An international project between one of largest trading partners and best allies of the United States to transport oil in one of the safest ways possible is a cause for outrage? I mean, would you rather the oil companies, say, go to war for oil?
Let it go.
07:22 PM on 03/07/2012
Yes oil speculators drive oil price spikes, however this Keystone project will also raise prices through other dynamics, I have heard from one oil supply professional.
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HUFFPOST SUPER USER
Ruta Victoria Jodis
Spin does not = TRUTH, send more facts!
11:45 PM on 03/11/2012
pray tell...WHAT OTHER DYNAMICS?and what professional. the full serve guy at the gas pump? Sheesh if youre going to make that kind of a statement back it up with FACTS..
HUFFPOST SUPER USER
rybalaw
07:13 PM on 03/07/2012
There is a disconnect between what Brent Crude and West Texas intermediate trade for in London and New York respectively with Brent being the higher price. There is an actual oil glut at the Cushing, OK pipeline hub because that hub has no direct connection with the refineries on the Texas and Louisiana Gulf Coast. This means that refineries on the Gulf coast have to pay the higher Brent price and that Refiners in Chicago and Denver pay the WTI price. The part of the Keystone that connects the Cushing, OK and the Henry Pipeline Hub outside of Houston needs to be build as it would base crude prices on the Gulf Coast on the WTI as it trades in the NY and Chicago Pits.
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HUFFPOST SUPER USER
Ruta Victoria Jodis
Spin does not = TRUTH, send more facts!
11:50 PM on 03/11/2012
Rybalaw...have heard this from an oil professional as well...LOL
seriously you are correct
AMERICA >>>>JUST BUILD THE DARN PIPE, its A PIPE
IT TRANSPORTS.
IT DOESNT BITE

ITS not a gosh darn NUCLEAR WARHEAD....
09:19 AM on 03/12/2012
Ruta Victoria Jodis

I don't know what side of the fence you are on
But fanned for your enthusiasm!
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HUFFPOST SUPER USER
Charles Milburn
You can't fix stupid...but you can elect it.
05:39 PM on 03/07/2012
For those of you who weren't aware of the pipeline consequences, food for thought. And she didn't mention the oil speculators who are the main cause of higher gas prices.
10:31 PM on 03/07/2012
Explain how Oil Speculators are the cause of higher prices.

Some people might think that prices are higher because buyers perceive that future supplies will be more scarce.
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HUFFPOST SUPER USER
Gottlieb
hated by left since 1973 and right since 1982
02:28 PM on 03/08/2012
I can see you look to non-biased sources for your information.
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Minolta321
Photographer
05:31 PM on 03/07/2012
Obama will approve it, AFTER the elections. Why? Because he doesn't care about the far lefts demands when they can no longer keep him from his second term.
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Minolta321
Photographer
05:24 PM on 03/07/2012
For decades the left has been keeping the US from it's own oil saying: "If we drill now the oil wont come to market for 5 years or so".

Well it's been 25 years and the left is still keeping us from drilling. Their short term argument has become a long term, generational effort to keep prices up and keep the US from it's oil.

Obama should do two or three things here.

1) Promote the use of our own oil and gas. Lets go for it, lets drill lets get it lets use it.

2) Stop wasting tax payer money on oil and gas subsidies and stop wasting tax payer money subsidizing Green energy that is not really ready.

3) Put more money into green energy RESEARCH. Lets invent the batteries we need for electric cars. Lets invent a better way to extract energy from renewable sources. Stop wasting money on people who give Obama political support and start putting the focus of our effort into better green technology.
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HUFFPOST SUPER USER
ameriki00
05:03 PM on 03/07/2012
The price of oil is set by a cartel, not by market forces.
05:03 PM on 03/07/2012
we should just call this the poison the ground bill