Want an executive summary? Sure! According to documents presented by the company building the pipeline to Canada's National Energy Board, Keystone XL can be used to increase annual U.S. gas costs by $4 billion.
(Originally appeared here. I'll be publishing more on Daily Kos on Keystone XL misinformation.)
You hear many lies about the Keystone XL Pipeline, but today we are just going to talk a bit about a document that completely refutes one of them: that that pipeline will make our gas cheaper.
A few years ago TransCanada, the company that’s building the pipeline, submitted a Section 52 application to Canada’s National Energy Board. Section 3: Supplies and Markets and its appendixes, clearly states that the company expects the pipeline will allow Canadian shippers to add up to almost $4 billion dollars every year to the United States’ cost of gas.
How? Partly due to scarcity. Here’s the first 1.9 billion in TransCanada’s own words:
Existing markets for Canadian heavy crude, principally PADD II [the Midwest], are currently oversupplied…Now for another $2 billion, brought to you by them no longer needing to offer "discounts":
Access to the USGC [United States Gulf Coast] via the Keystone XL Pipeline is expected to strengthen Canadian crude oil pricing [...] by removing this oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude. [...]
The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of US $2 billion to US $3.9 billion.
If deliveries on the Keystone XL Pipeline relieve the oversupply of Canadian heavy crudes, a price discount at the USGC should not be necessary. By 2013, Purvin & Gertz estimates the total supply of all the Canadian heavy crude blends to be 1.84 million B/D [barrels per day] ...There we have it. Why do our politicians and veiled lobbies like the American Petroleum Institute keep telling us this pipeline (headed for export from the Gulf, making oil scarcer) will “hold down the gas prices for consumers”?
Based on eliminating an average discount of $3.00 per barrel on this volume of heavy crude, the annual revenue to the Canadian producing industry would increase by approximately $2.0 billion (U.S.).
[So 1.84 mill barrels per day times $3 times 365 days]