Michael Whatley

By now, anyone watching the political debates over the Keystone XL pipeline is aware of the massive misinformation campaign that opponents of the project have used to delay that critical project. From disputing jobs that will be created by this needed asset, to hoisting an inflatable tube around the White House and shipping Hollywood’s B-list to the nation’s capital to get arrested in so-called “civil disobedience actions,” opponents have certainly made a lot of noise.

While the talking points used by these groups have been refuted time and again, several have penetrated the public narrative surrounding the project. The project will kill jobs, not create them (untrue – it will create 20,000 jobs directly and 100,000 indirectly). The pipeline will be unsafe and prone to leaks (also untrue – the Obama Administration’s State Department has found it will be the safest pipeline ever built). Oil sands crude will increase greenhouse gas emissions (blocking Keystone XL will lead to higher GHG emissions and no reduction in the use of oil).

But perhaps the biggest whopper of all is the claim that Keystone XL will raise gasoline prices. The idea that the construction of a pipeline carrying 700,000 barrels of oil per day from the United States and Canada, thus reducing our reliance on OPEC and providing a more stable supply of petroleum, will somehow increase prices is an interesting proposition. It almost requires an individual to abandon logic and rational thought altogether.

To support this argument opponents cite official documents from the Canadian government which say that the project might increase the price per barrel that oil sands producers can charge. But as could be expected, what KXL opponents ignore is more important than what they actually cite. For instance, in its Reasons for Decision filing, Canada’s National Energy Board describes how “traditional supply sources of heavy crude for the [U.S. Gulf Coast] including Mexico and Venezuela are declining.” As a result, those refiners are “seeking to diversity their supply sources by obtaining access to western Canadian crude.” In other words, existing sources are no longer reliable, which in the future will mean increased scarcity and, in turn, higher prices. In the highly complex world that is the nation’s energy supply, the answer is often not as simple as some make it seem.

Faced with declining imports from Mexico and Venezuela, the Gulf Coast refineries will replace these supplies with new crude supplies from either Canada, Montana, and the Dakotas via Keystone XL, or the Middle East via tankers. The choice is fairly simple – get cheaper oil from reliable North American reserves, or more expensive oil from unstable regions subject to disruptions. One needs to look no further than the crisis surrounding the Strait of Hormuz to understand which way we should be going as a nation.

Given the vast implications inherent in Keystone XL’s approval, and the fact that gas prices in 2011 set a record high and are projected to increase in 2012, the American people deserve an open and honest debate about this project.

Keystone XL represents an opportunity to reduce our dependence on OPEC, increase price stability and lower prices at the pump for American drivers. Hollywood actors and actresses may not understand that, but the American people do.


Michael Whatley

Michael Whatley is Executive Vice President of the Consumer Energy Alliance.