Environmentalists are claiming that approving the Keystone XL pipeline will harm consumers by raising prices at the pump.
A report by Consumer Watchdog, a left-wing group, found that the Keystone pipeline would drive up U.S. gas prices — 20 to 40 cents in the Midwest — and won’t yield any long-term benefits for the U.S. economy.
The group claims the companies that own the pipeline want to use it to “reach export outlets outside the U.S. for tar sands oil and refined fuels, which would drive up the oil’s price.”
“A vote for Keystone is a vote to raise gas prices on Americans and send the profits to a foreign oil company,” said former hedge fund manager and anti-Keystone activist Thomas Steyer, who backed the report.
However, Keystone supporters disputed the claims that gas prices would rise.
“Any analysis which attempts to show that adding 830,000 barrels per day of highly-discounted oil to U.S. markets will raise gasoline prices is not worth the paper it is written on,” said Michael Whatley, vice president of the Consumer Energy Alliance. “Clearly, Consumer Watchdog and its anti-Keystone XL billionaire backer, Tom Steyer, continue to choose ideology over logic.”
Aside from possibly raising gas prices, environmentalists, including Steyer, have opposed the approval of the Keystone pipeline over concerns that it will contribute to global warming and harm the environment.
Steyer, a leading anti-Keystone activist who has spent millions backing environmental causes and Democratic candidates, came under fire for holding investments in companies that could benefit if the Keystone pipeline was not approved by the Obama administration.
The Daily Caller News Foundation reported that Steyer, who is worth $1.4 billion, has left much of his wealth in the hedge fund he founded, Farallon Capital Management.
Farallon has investments in fossil fuel companies, including Kinder Morgan — which is building a pipeline that would compete with the Keystone pipeline being built by TransCanada.
“I think it’s hypocrisy, quite frankly,” Louisiana Republican Sen. David Vitter told Fox News. “Who knows when he’s going to divest of these investments … maybe in a few months when his helping kill Keystone will boost them up to top value. … Who knows?”
Steyer said in a letter to Vitter that his investments in Kinder Morgan are expected to generate between $1 million and $2 million in profits. However, Steyer said he was divesting himself of Kinder Morgan shares at the end of the year and that all profits from the company would go toward assisting the victims of wildfires.
In 2010, Steyer signed a pledge to give the majority of his assets away to philanthropic and community causes and asked that his investments be “greened” when he left Farallon Capital last year.
The oil and gas industry has argued that the pipeline will improve U.S. energy security and create 20,000 construction and manufacturing jobs over the life of the project.
“Experts at the Department of Energy concluded that Keystone XL and other infrastructure projects that eliminate transportation constraints from Cushing to Houston, ‘would not adversely affect Midwest gasoline consumers,’” said Whatley. “The memorandum goes on to detail how Keystone XL would, in fact, lower gasoline prices in fuel markets served by refineries in the Gulf Coast, including consumers in the Midwest.”
A major problem contributing to higher oil prices, which translate into higher gas prices, is insufficient pipeline capacity to get all of the oil we are pumping out of the ground to market.
The Boston Globe reports: “There isn’t enough pipeline capacity to transport all the oil produced in North America, and not enough refinery capacity to convert the oil into gasoline.”
Economic arguments aside, Keystone’s approval comes down to carbon dioxide emissions.
“Our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution,” President Obama said at Georgetown University. “The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward.”
A State Department review of the pipeline found that it would not significantly contribute to carbon dioxide emissions because Canadian tar sands would be extracted and transported to market even if the pipeline was not approved. However, this conclusion was heavily derided by environmentalists and challenged by the Environmental Protection Agency.
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