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(JEFF MCINTOSH/Jeff McIntosh/Associated Press)
(JEFF MCINTOSH/Jeff McIntosh/Associated Press)

Economy Lab

Why more oil sands crude in U.S. doesn't make sense Add to ...

Susan Casey-Lefkowitz directs the international program at the Natural Resources Defense Council in Washington, D.C.

A recent Economy Lab post on a Fraser Institute study should have taken a closer look at U.S. oil markets and the destination of tar sands oil in the proposed Keystone XL pipeline.

Forget 'ethical' for a moment, what is so 'sensible' about more tar sands oil being sent by pipeline to the United States? U.S. oil demand has already fallen and will continue to fall as new fuel economy standards and other oil reduction strategies come into place. The Obama Administration's new blueprint for a secure energy future pledges to further reduce the use of oil by 3.7 million barrels per day in just over ten years, by 2025.

Additionally, the United States has enough tar sands pipeline capacity right now without needing more of the oil sent in a high cost, high risk transboundary pipeline. The State Department as the agency responsible for permitting the Keystone XL pipeline has shown it would be more than a decade before the pipeline would do anything more than shift tar sands oil from its current destination in the Midwest to the Gulf coast. Far from helping America relieve high gasoline prices, this move could actually raise Midwestern gas prices.

It's also unlikely the Keystone XL pipeline will replace oil from the Middle East since, being the tar sands' first major pipeline to a port, it will more likely cause Canadian oil to be sent outside the United States. That makes us the friendly neighbor to the south, allowing Canadian oil across our land and waters only to have the pollution remain.

University of Calgary economist Phil Verleger recently wrote that Gulf coast oil is increasingly destined for export. Meanwhile, Gulf coast oil refining giants such as Valero have indicated they see a future in diesel exports for the tar sands oil they expect from Keystone XL. According to the U.S. State Department, Keystone XL "would not substantively influence...the overall volume of crude oil transported to the U.S. or refined in the U.S."

As for "ethical" the proposed pipeline has caused outrage over the hijacking of America's clean energy future that can be heard in the halls of Washington, D.C., on farms in Montana and Nebraska, and in refining communities in Texas. Only clean energy will give us the homegrown, long-term economic prosperity, environmental safety and energy security that North America needs. Countries around the world are seeing clean energy as the economic development path for the future.

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