TransCanada Flip-Flops on Keystone XL’s Impact on Oil Prices
On January 25, TransCanada spokesman Terry Cunha told the AP that a $3-a-barrel increase is expected for the price of Canadian heavy crude oil in the Midwest if the Keystone XL pipeline is approved.
Canadian heavy crude oil refers to Alberta tar sands.
Then yesterday, Mr. Cunha told The Globe and Mail, “In no way will this project increase prices on gasoline or the price per barrel.”
Why the flip-flop?
Oregon Senator Ron Wyden sent a letter yesterday to Federal Trade Commission (FTC) Chairman Jonathan Leibowitz, asking for an investigation into whether seven Canadian oil companies have illegal agreements to use the Keystone XL pipeline to drive up oil prices in the Midwest.
“It has been brought to my attention that documents and testimony indicate that at least seven Canadian oil shippers have agreed to incur increased near-term shipping costs on the new pipeline in order to impact market supply in the existing markets so as to drive up the overall price of their product for U.S. refiners,” Senator Wyden said in the letter. “According to TransCanada, the proposed Keystone XL pipeline can be used by Canadian oil shippers to add up to $4 billion to U.S. fuel costs.”
Senator Wyden has a track record of success in catching oil companies red-handed manipulating markets to increase their profits. Everyone knows their profits soar when oil prices go up, but rarely do we get an inside look at how they actually make it happen.
The State Department should consider waiting to start the next round of public review for the project until the FTC has had a chance to look into this. Americans deserve protection from oil companies that seem bent on emptying our pockets to fatten their bottom lines.
TransCanada has some explaining to do. It doesn’t pass the laugh test to say that Keystone XL won’t increase oil prices now, after the company’s own previous statements, documents, and testimony say otherwise.
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