We’ve attacked this subject from a couple of different angles– Canada’s Conservative Party leadership gambling the country’s entire economy on the goal to make the country a “global energy superpower,” and the tar sands exploitation is so costly that low-cost transportation via pipelines is necessary to make exploiting the tar sands profitable– but today, Canada’s public broadcaster emphatically makes the case that without Keystone XL and other pipelines, the tar sands could lose $100 billion over the next 15 years.
The reason for the loss is that comparative pricing between U.S. “West Texas Intermediate” grade oil and the tar sands’ “Western Canada Select” strongly favors the U.S. Because of the cost of processing and transporting tar sands oil, that difference will continue to make American oil the better buy on the international market.
On top of that, one market analysis firm says that unless the price of oil rebounds to pre-glut levels, KXL might be “irrelevant.” According to PetroleumWorld.com, which covers the Latin American oil market:
“I think that the market has had to move on,” [market advisor RBN Energy president Rusty Braziel]┬ásaid. “If you’re on the contraction scenario, and we’re at $65 [a barrel] by 2020, the Keystone pipeline project is probably not” necessary, he said June 16 at the sidelines of the [Energy Information Administration] conference.
These stories confirm some things we’ve long believed at PipeLIES Exposed. First, KXL does nothing to help American consumers; Braziel confirms that oil prices need to go up to make Keystone XL “relevant.”┬áSecond, KXL wouldn’t help the U.S. economy, and in fact would hurt it by making tar sands oil more competitive with West Texas Intermediate.
(h/t to Jane Kleeb at Bold Nebraska for flagging the CBC story.)