Keystone XL Pipeline Could Raise Gas Prices, Experts Say

• Joe Wertz
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  Joe Wertz was a reporter and managing editor for StateImpact Oklahoma from 2011-2019. He reported on energy and environment issues for national NPR audiences and other national outlets. He previously worked as a managing editor, assistant editor and staff reporter at several major Oklahoma newspapers and studied journalism at the University of Central Oklahoma.

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Oklahoma, as we’ve reported, both benefits and suffers from an uneven crude oil market.

The price of West Texas Intermediate — priced at Cushing — is depressed, which is bad for the region’s producers and state revenue coffers. But low crude prices might be a good thing for drivers in Oklahoma and the mid-continent, who fill up with cheaper gasoline than the rest of the country.

Producers are betting big on new pipelines to relieve a glut in Cushing and raise the price of West Texas Intermediate.

So could new pipelines efforts like Keystone XL and Seaway raise the price of gasoline? Producers say, ‘No,’ refiners say, ‘Maybe’ — and as our partners in Texas report: It’s possible.

“That’s the concern here. Is that by removing the glut in supply that you will cause oil prices to go up which will likely impact motorists,” Patrick Dahaan, an analyst for GasBuddy.Com,” tells StateImpact Texas’ Mose Buchele.

Phillip Verleger of energy consulting firm PK Verleger tells Buchele that TransCanada’s Keystone XL pipeline would mean consumers in “Illinois, Minnesota, probably Iowa Nebraska, possibly Missouri and possibly the Dakotas paying more.”

TransCanada, of course, disagrees with Dahaan and Verleger. The company’s Jim Prescott backed up his argument with a Department of Energy memo he forwarded to StateImpact Texas:

“It says in the summary and conclusion that these pipeline projects would not increase gasoline prices to Midwestern consumers. That’s the last line in the report,” he paraphrased.