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Could the Keystone XL pipeline help lower gas prices in the United States?

The West’s economic sanctions against Russia for its invasion of Ukraine have roiled global energy markets, with a U.S. ban on Russian oil imports driving up gas prices for Americans even further. GOP leaders are now blaming rising fuel prices in part on President Biden’s decision to block the Keystone XL Pipeline early in his administration.

Texas Rep. Dan Crenshaw, who has urged the Biden administration to increase domestic oil production, said the Keystone XL pipeline would have produced 830,000 barrels of crude per day in a tweet the day before Russia’s February 24 attack.

In early March, he tweeted, “Stop importing from Russia, start producing more.”

South Dakota Gov. Kristi Noem went even further than Crenshaw, writing in a Fox News op-ed on February 24 that Mr. Biden was “signaling to the world that American energy independence is no longer a priority” by halting the Keystone XL pipeline.

“Keystone would have helped allay those fears while also providing America with the flexibility to counter Russian aggression by expanding energy exports to Europe,” she wrote.

With Americans experiencing the highest inflation in 40 years, would expanding Keystone provide significant relief at the pump?

The source of the problem

It’s critical to understand what’s causing the high oil prices in the first place. Gregory Nemet, professor of public affairs at the University of Wisconsin-Wisconsin Madison’s Energy Institute, noted that the price of oil has risen steadily since last fall, when it was around $70 a barrel, to more than $130 last week before settling back around $100 a barrel on Tuesday. The ongoing economic recovery, which boosted demand from consumers and businesses that had been dampened by the COVID-19 pandemic, was responsible for the initial increase in crude prices.

“There will be a lot more transportation and people flying around, people driving, and there will be more demand for oil,” he said. “And supply does not always respond quickly to that kind of demand shock.”

The conflict in Ukraine also plays a role, though it was not the cause of the increase.

“Whenever there is political instability in places where there is a lot of oil production, markets react,” Nemet said. “And it’s not always that they say, ‘Oh, there’s not enough oil.’ It’s as if they’re saying, ‘Oh, there’s a lot more risk now than there was before.'”

According to the American Fuel and Petrochemical Manufacturers, the United States will import an average of 209,000 barrels of crude oil per day from Russia in 2021, as well as 500,000 barrels per day of other petroleum products. This amount accounts for 3% of US crude oil imports and approximately 1% of crude oil processed in US refineries.

At its peak, Keystone XL, an expansion of an existing North American pipeline, would have transported 830,000 barrels of crude oil per day from Alberta, Canada, to Nebraska. According to Reuters, the $8 billion expansion was only about 8% complete when Mr. Biden halted construction.

Nonetheless, many experts agree that proceeding with the pipeline would not have prevented U.S. gas prices from reaching a record high. Extending the Keystone XL pipeline would have increased global oil production by less than 1%, which they described as “near negligible.”

“I can see why people think that,” Nemet said.

“However, in terms of gasoline prices and global oil prices, it’s simply something to ignore because it has no impact.”

More output, but higher prices for Americans

Even if the pipeline were already built, it would not help with the price at the pump, according to Nemet, who noted that the United States has already doubled its oil production in the last 15 years. “Yet we still have oil at $100 per barrel.”

With inflation on the rise, gas prices have been steadily rising for months, reaching an all-time high of $4.33 per gallon on March 11, according to AAA.

“The key takeaway is that the United States is not the only storey here. It’s a global market, after all “Nemet stated. “So we have 8 billion people consuming oil and many countries producing it, and it all goes into one market.”

David Kieve, president of the environmental advocacy group Environmental Defense Fund Action, also told CBS News that completing the Keystone pipeline would not have mitigated the impact of the Ukraine crisis on fuel prices.

“The Keystone pipeline, even if you were a proponent of seeing it completed, would not be completed yet,” he said. “It would not be operational and would not be pumping oil until 2023. So the notion that the president’s stance on the pipeline, which would still not be pumping oil, emboldened Vladimir Putin to invade Ukraine is absurd.”

Even if the Biden administration immediately offered new oil leases to drillers, it would not alleviate the costs that Americans are currently facing. According to Kieve, it will take six to ten years for oil from a new lease to reach the global market.

Clean energy advocates advocate for less oil.

Mr. Biden’s agreement with the International Energy Agency to release 30 million barrels of oil from the nation’s Strategic Petroleum Reserve, on the other hand, puts downward pressure on gas prices in the short term, according to Kieve. The agency will release a total of 60 million barrels of crude to help alleviate some of the supply disruptions caused by Ukraine’s civil war.

“You won’t see many environmental organisations jumping up and down and proclaiming, ‘Hey, this is the best thing ever,'” Kieve said. “However, there is an acknowledgement that such actions may have some impact on the prices that Americans pay at the pump.”

According to Nemet and Kieve, the best way to protect Americans from rising oil prices in the long run is to accelerate the transition from fossil fuels to renewable energy. Renewable energy, unlike oil, is far less reliant on fixed and limited natural resources. Energy from solar panels, wind turbines, and other low-carbon technologies is also becoming more affordable as they become more widely used, according to researchers.

“It’s different than having international competition for a scarce resource where everyone wants the oil and there’s a fixed amount of it,” Nemet explained. “It’s that as we produce more of these clean energy technologies, they become more affordable for everyone.”

“We’re all aware of the pain that Americans are experiencing at the pump right now,” Kieve said, “but the best way to eliminate pain at the pump, in the long run, is to eliminate the pump altogether.” “Clean energy that we harvest at home and work to find a better way to store will power us at home.”

About the author


Kathy Lewis

Kathy Lewis is an all-around geek who loves learning new stuff every day. With a background in computer science and a passion for writing, she loves writing for almost all the sections of Editorials99.

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