Philip Verleger, president of an oil and economics consulting company and a professor at the University of Calgary, has an op-ed piece in the Minneapolis StarTribune arguing that the Keystone XL pipeline will raise gas prices in the Midwest.
The Canadian oil industry, with the strong backing of Prime Minister Stephen Harper’s government, wants to build a pipeline to move crude oil from Alberta to the Gulf of Mexico.
The firms involved have asked the U.S. State Department to approve this project, even as they’ve told Canadian government officials how the pipeline can be used to add at least $4 billion to the U.S. fuel bill.
U.S. farmers, who spent $12.4 billion on fuel in 2009, according to the U.S. Department of Agriculture, could see expenses rise to $15 billion or higher in 2012 or 2013 if the pipeline goes through.
Verleger argues that these costs will increase because the Keystone pipeline will ship tar sands crude from Canada that would previously have been brought to Midwest refineries down to the Gulf Coast instead.