One of the reasons supporters of the keystone pipeline back the project is because they believe that it will bring lower gas prices. Americans seem to care more about saving a buck than they do about their health and the environment. But the truth is gas is a global commodity and its price is set by global markets. It rises and falls based on all sorts of factors, including current demand, demand forecasts, global economic conditions, and international events that affect distribution channels. Local supply fluctuations rarely have any but the tiniest impact on gas prices. New pipelines carrying tar-sands oil might extend the lifespan of climate-wrecking fossil fuels by a few years, but they won’t bring down the price at the gas pump.
In fact, in the Midwest, Keystone XL might actually increase the price per gallon. according to researchers at the Cornell University Global Labor Institute, TransCanada, the proposed manufacturers of the pipeline, admitted that “KXL will increase the price of heavy crude oil in the Midwest by almost $2 to $4 billion annually.” The Cornell study explains that this will happen as a result of “diverting major volumes of Tar Sands oil now supplying the Midwest refineries, so it can be sold at higher prices to the Gulf Coast and export markets.”
Fox expects us to to believe that building KXL could result in gas prices dropping “20 to 30 cents a gallon”; indeed, Asman responds to his claim by saying that the Gulf executive is “on the retail side of the gas business, so you know” how gas prices come about.
But the Cornell University study estimates nearly the exact opposite of the claim, estimating that building the KXL pipeline could increase domestic gas and diesel fuel prices in some states by between “30 to 40 cents more per gallon”
Gasoline is a significant cost for most Americans, and especially for those with lower incomes and residing in rural areas. Also, refined oil products like gasoline and diesel are very widely used throughout the economy especially in agriculture and commercial transportation. So higher fuel prices due to KXL would ripple through the economy and impact a very broad range of people and businesses.