Analysts: Keystone will RAISE my gasoline prices

[BenBurch]

http://www.bloomberg.com/news/2012-...een-raising-gas-prices-in-midwest-energy.html

TransCanada Corp. (TRP)’s Keystone XL oil pipeline, a project backers including Republican Presidential candidate Rick Santorum say will create cheaper U.S. gasoline, instead risks raising prices as much as 20 cents a gallon in the Midwest, Great Plains and Rocky Mountains.

The line would create a new way to carry Canadian imports outside the Midwest and reduce an oil surplus that’s depressing prices in the central U.S. Spot gasoline was 55 cents cheaper in Chicago than in New York on June 1, the second-highest ever. Nationwide, retail gasoline set its highest February average at $3.55 a gallon, data compiled by Bloomberg show.

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[Puppycow]

Yup. And even without the whole thing, just the section from Cushing, OK to the Gulf Coast could have the same effect.

Why There's So Much Interest In Half A Keystone XL In One Graph

 

[Brainster]

And reduce prices overall nationally:

Keystone XL might lower the average cost of gasoline across the U.S. by up to 4 cents a gallon, Ray Perryman, a consultant hired by TransCanada to assess the economic impact of the project, said in an e-mail.

 

[theprestige]

http://www.bloomberg.com/news/2012-...een-raising-gas-prices-in-midwest-energy.html

And reduce prices overall nationally:

Ben, why aren't you willing to pay a little more, so that the working poor in places like San Diego can pay a little less?

 

[A'isha]

And reduce prices overall nationally:

"The net impact of Keystone XL on gasoline prices would be minimal, said Perryman, whose research has been cited by TransCanada to back up claims on potential job growth and market impacts from the pipeline."

That'll really help the Republicans in those states against Obama. "He's blocking the construction of a pipeline that will take oil from somewhere else and turn it into gas that will be sent somewhere else. That will result in huge gas price increases for you, but will mean that people somewhere else will get to pay less for gas, and won't really lower the overall sky-high price of gas in the US by more than one percent because the pipeline will let the Canadians charge Americans a lot more for their oil than they're charging now! Vote for me so I can make sure that happens!"

 

[eeyore1954]

Consumers in Colorado and Wyoming currently pay less for gasoline than anywhere in the nation because of the supply glut in the Rocky Mountains caused by stranded Canadian imports and growing oil production from onshore fields.

The Wyomingites need that break to power the aircraft carrier they want. They are not fuel efficient you know. Of course maybe they should opt for a nuclear powered one.

 

[Dymanic]

Keystone XL oil pipeline [...] risks raising prices as much as 20 cents a gallon in the Midwest, Great Plains and Rocky Mountains.

I believe the source of that is this Cornell University study:

http://www.ilr.cornell.edu/globallaborinstitute/research/upload/GLI_KeystoneXL_Reportpdf.pdf

Does a pretty thorough job of putting the whole "job creation" myth to rest as well.

 

[Dymanic]

And reduce prices overall nationally:

Think about it. The plan puts the terminal end of that pipeline at a port city for a reason. If KXL has the effect of lowering gas prices in the US, the companies that refine that fuel will simply export more of it to countries where they can get a better price, just as they're doing right now.

 

[Tricky]

Think about it. The plan puts the terminal end of that pipeline at a port city for a reason. If KXL has the effect of lowering gas prices in the US, the companies that refine that fuel will simply export more of it to countries where they can get a better price, just as they're doing right now.

In fairness, port cities are also the cities in which refineries are usually built, and not only so they can export. They receive the incoming crude from tankers as well. They also are the beginning points for many other pipelines. So having a terminus in a port city doesn't automatically mean it will be exported.

 

[Dymanic]

In fairness, port cities are also the cities in which refineries are usually built, and not only so they can export. They receive the incoming crude from tankers as well. They also are the beginning points for many other pipelines. So having a terminus in a port city doesn't automatically mean it will be exported.

Conceded. I think my last sentence can stand on its own, however.

 

[JoeTheJuggler]

So I haven't heard specifically what Obama's objections are. Granted, the effect it will have on prices at the pump are minimal nationwide, and bad for people in the upper Midwest.

I've been reading through the Environmental Impact Statement. I don't know how this compares to current methods of moving oil around or what it means in terms of economic costs. It says they estimate between 1.18 and 1.83 spills (greater than 2100 gallons) per year over the lifetime of the pipeline. In most cases, it sounds like such spills stay localized and aren't too difficult to clean up.

I guess I'm wonder what the cost/benefit analysis really looks like?

 

[BenBurch]

So I haven't heard specifically what Obama's objections are. Granted, the effect it will have on prices at the pump are minimal nationwide, and bad for people in the upper Midwest.

I've been reading through the Environmental Impact Statement. I don't know how this compares to current methods of moving oil around or what it means in terms of economic costs. It says they estimate between 1.18 and 1.83 spills (greater than 2100 gallons) per year over the lifetime of the pipeline. In most cases, it sounds like such spills stay localized and aren't too difficult to clean up.

I guess I'm wonder what the cost/benefit analysis really looks like?

Thing is, the Yellowstone River spill was a lot larger than people thought it could be before it happened. This goes through some sensitive watersheds, and that is part of the objection.

 

[Ziggurat]

I believe the source of that is this Cornell University study:

http://www.ilr.cornell.edu/globallaborinstitute/research/upload/GLI_KeystoneXL_Reportpdf.pdf

Does a pretty thorough job of putting the whole "job creation" myth to rest as well.

That paper is taking mutually contradictory positions. On the one hand it criticizes the project for raising local gas prices, and on the other hand it criticizes that project for locking us into fossil fuels. Well, if it's not lowering the price, then how is it locking us into fossil fuels? Wouldn't those price increases be expected to do exactly the reverse?

But of course, the entire section on the "green economy" is nothing but vaporware. It contains nothing of any substance. Even the references are essentially irrelevant to the actual details of this pipeline, and not a single actual quantitative projection is presented.

 

[Dymanic]

So I haven't heard specifically what Obama's objections are.

His objection is that Republicans are trying to score political points by pushing the thing through -- on false promises, and before the enviromnental issues have been adequately studied. That, plus he's a Kenyan socialist Marxist Muslim nazi who hates America.

 

[JoeTheJuggler]

Thing is, the Yellowstone River spill was a lot larger than people thought it could be before it happened. This goes through some sensitive watersheds, and that is part of the objection.

I guess I'd like someone to interpret all this for me. Here's the State Department's page with all the EIS reports:
http://www.keystonepipeline-xl.state.gov/clientsite/keystonexl.nsf?Open

I've just been looking through the Executive Summary, but it still doesn't mean much to me.

It discusses the expected rate of spills, the maximum spill volume, etc. But I suppose I wonder how that compares to whatever other options are used to move the oil around (if indeed it is moved at all, or whether it just sits in the upper Midwest as a supply glut), and then compare all of that risk to the benefit.

Frankly, I have no idea how that works out. And I don't think Obama has done a very good job of communicating his objections. (I'm certainly not saying they're not perfectly valid or that weighing the costs/benefits points one way or the other--or doesn't point one way or the other.)

Back to the OP: the pipeline would move crude oil, right, and not refined gasoline? If so, then I'm not sure how the petroleum glut here has such an effect on the price of gasoline here (or how the pipeline would change much of anything). Is the oil refined locally?

 

[JoeTheJuggler]

His objection is that Republicans are trying to score political points by pushing the thing through -- on false promises, and before the enviromnental issues have been adequately studied.

The EIS has been completed. Are there other studies underway?

That, plus he's a Kenyan socialist Marxist Muslim nazi who hates America.

I get the GOP's motivation for opposing almost anything Obama says or does, but I don't really fully understand Obama's objections to this pipeline.

If he's actually in favor of it, but just wants to do it right, he's doing a very poor job of communicating that position to the public.

 

[eeyore1954]

Thing is, the Yellowstone River spill was a lot larger than people thought it could be before it happened. This goes through some sensitive watersheds, and that is part of the objection.

Have there been any oil pipeline spills in the US that have had lasting effects on anything other than a localized area?

 

[lomiller]

So I haven't heard specifically what Obama's objections are. Granted, the effect it will have on prices at the pump are minimal nationwide, and bad for people in the upper Midwest.

I've been reading through the Environmental Impact Statement. I don't know how this compares to current methods of moving oil around or what it means in terms of economic costs. It says they estimate between 1.18 and 1.83 spills (greater than 2100 gallons) per year over the lifetime of the pipeline. In most cases, it sounds like such spills stay localized and aren't too difficult to clean up.

I guess I'm wonder what the cost/benefit analysis really looks like?

From what I can tell there is some validity to the complain about it running through the Sand Hills, but otherwise the objections have nothing to do with the pipeline itself and are simply a proxy to try and stop oil sands production. There are already 10’s of thousands of miles of pipelines that run though the same areas the Keystone pipeline will so the Sand Hills were the only particularly notable thing about the route.

As far as Oil Sands production goes, this is the wrong battle. The “war on drugs” is a good example of what happens if you try to eliminate something by stopping production, it just doesn’t work and productions will just move someplace else even less desirable.

The oil sands themselves are rate limited so they will never produce particularly large volumes in the overall scheme of things. The real danger in global warming comes from coal and possibly natural gas, both of which could expand significantly and keep CO2 emissions elevated for decades or centuries. Even with oil sands production, CO2 emissions from oil are going to stabilize and drop. Within a couple decades this drop could begin to be very rapid, so the real challenge and opportunity is in preventing Coal and Natural Gas from stepping into that gap.

 

[eeyore1954]

His objection is that Republicans are trying to score political points by pushing the thing through -- on false promises, and before the enviromnental issues have been adequately studied. That, plus he's a Kenyan socialist Marxist Muslim nazi who hates America.

It probably is true that the republicans are trying to score political points by pushing it through just as it is probably true President Obama thinks it is to his political advantage to stall some more.

How long have studies been done on this project.

ETA: What is a typical time frame for approval.

 

[Dymanic]

That paper is taking mutually contradictory positions. On the one hand it criticizes the project for raising local gas prices, and on the other hand it criticizes that project for locking us into fossil fuels.

I don't see those positions as contradictory at all. It's a slam dunk that gas prices are going to increase, over any significant period of time, unless the global economy makes some dramatic changes in direction.

Wouldn't those price increases be expected to do exactly the reverse?

Well, it hasn't done so yet. It's not like many of us really have much option but to pay whatever the going rate happens to be. We're living in a society in which that decision was made decades ago -- just as the decisions we're making now will determine what kind of energy economy we'll have some decades from now. It's a question of how best to utlilize the last of the cheap oil that remains.