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Hugo Chavez Told Me He Won't Sell Oil To The Kochs

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So all the Kochs have to do is get the US government to agree to pop a pipe through Cushing to Houston: the Keystone XL. But that would require that the US government go stark raving mad, commit environmental suicide and reverse all policy to slow global warming -- all to bring in foreign oil while the US itself is suffering from a major oil and gas glut.

Furthermore, approving the Keystone XL Pipeline will raise the price of heating oil and gasoline in the US.

Let me repeat: Approving the Keystone XL Pipeline will raise the price of oil and gasoline.

This is the nasty little secret of the pipeline lords and unknown to all but experts. Every Republican politician and not a few Democrats have promoted the fairy tale that the XL Pipeline will reduce gasoline and oil prices throughout the USA.

It's bullshit, but it's gospel -- utterly unquestioned by the mainstream media. Most official opponents of the pipeline buy the lower-cost-oil line, repeating variants of the New York Times editorial that the economic "benefit from Keystone XL outweigh the certain damages" to the environment.

But the "benefit" is bogus. Prices for gasoline will rise by about 15 cents (nine pence) a gallon in the Upper Midwest if the pipe opens.

Here's why. Normally, the supply of crude oil in the US doesn't have a damn thing to do with the price of gas you put in your Humvee. Normally, Canadians could hose us down with hot tar and it wouldn't change oil and gas prices by a penny.

That's because the international price of oil is not set by supply and demand in the marketplace. Rather, the price is fixed by a dictator in a bathrobe, Abdullah, King of Saudi Arabia. He dictates, you pay.

But there are always anomalies.

As matters stand, with nowhere to dump their tar goo, Canadians have to sell at a $33 ( -  21) a barrel discount to nearby refineries in the US Upper Midwest.

American consumers are getting the benefit of this oil backup. Indeed, one angry Canuck, Cenovus Energy CEO Brian Ferguson, complains that the pipeline plug results in "subsidization to the United States consumer by $1,200 ( -  764) per Canadian."

The XL Pipeline would act as an oil enema, releasing the impacted inventory, enriching the Gulf refineries.

The result of opening the spigot through the XL Keystone will mean that US Midwest retail heating oil prices will skyrocket and gasoline in the region, as the crude drains away to other refineries, will rise an estimated 15 cents a gallon.

True, cheaper crude oil will now flow south, but as Canadian economist Robyn Allan writes, "It's the refining sector that sees the benefit of lower-priced WCS [West Canadian Sands oil] in the form of windfall profits from low feedstock costs."

The gusher of cheap crude from a new pipeline will enrich the refiners -- none more so than refiners named Koch.

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http://www.gregpalast.com

Author of the New York Times and international bestsellers, The Best Democracy Money Can Buy and Armed Madhouse, Palast is Patron of the Trinity College Philosophical Society, an honor previously held by Jonathan Swift and Oscar Wilde. Palast (more...)
 

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human beings can be so outrageously greedy.... by Lester Shepherd on Saturday, Feb 9, 2013 at 7:02:11 AM
Greed is an absolute. One is either 'greedy' or on... by Paul Repstock on Saturday, Feb 9, 2013 at 1:41:21 PM
We know who sets the price of oil and what their N... by Ray O. Sunshine on Saturday, Feb 9, 2013 at 11:57:28 AM
However, a few additional clarifications: "Canadi... by Paul Repstock on Saturday, Feb 9, 2013 at 2:03:20 PM
would be to process and refine it where it is mine... by Paul Repstock on Saturday, Feb 9, 2013 at 2:56:16 PM
But Canadian government is still a co-conspirator.... by BFalcon on Sunday, Feb 10, 2013 at 1:09:17 AM
!... by Paul Repstock on Sunday, Feb 10, 2013 at 10:54:07 AM
Let us all remember that the political and cultura... by Ethan Allen on Monday, Feb 11, 2013 at 3:01:36 PM