What he doesn't tell voters is that his cheerleading and strong-arm tactics in Congress on behalf of a foreign oil company — TransCanada — will actually jack up the cost of gas in Nebraska and the entire Midwest, but contribute almost nothing to US energy independence, since Keystone XL pipeline oil will flow to refineries in Houston, be refined and then get shipped off in tankers bound for the four corners of the world and the highest international bidders.
Currently, Canadian crude can be pumped only as far as the U.S. Midwest, where a crude oil oversupply is keeping regional oil prices low. The Keystone XL would clear that bottleneck, send Canadian oil to the Gulf Coast and open access to world markets, creating a massive business opportunity for tar sands players.
"There's no ability to access world markets, and that's the reason why WTI [Midwest oil pricing] is depressed. Keystone XL will relieve that issue," said Chad Friess, an oil and gas analyst at UBS Securities Canada Inc. in Calgary, Alberta. "Pricing is expected to improve as it comes on stream."
A 2009 market analysis conducted for TransCanada, the Alberta-based company that hopes to build the pipeline, projected that it would create a $3 per-barrel increase, at minimum, for Canadian heavy crude in the Midwest. Canada's petroleum producers would benefit most from the price hike.
The report predicts their annual revenues would increase $2 billion to $3.9 billion in 2013. But the entire industry—including the refineries and shipping businesses where Koch Industries has concentrated its efforts—would also profit.
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