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Welcome to the Year 2056: Keystone XL Is Finally Full

October 5, 2010

Post written by Carrie La Seur, President and Founder of Plains Justice. Crossposted from Plains Justice Today.

Chart created by Paul Blackburn, Plains Justice
In case you were wondering, the usual rules of microeconomics don’t hold sway here. Oversupply of pipeline capacity does not lead to reduced costs for shippers, because pipeline operators have a captive market and need to recoup their capital investment at the planned rate regardless of how little oil they’re shipping. For a pipeline operating well under capacity, that means that every shipper – including the Montana and North Dakota domestic oil producers who’ve been fighting for “onramps” to Keystone XL – will pay more for this capacity, not less.

The dirtiest oil in the world may also turn out to be the most expensive.

You can look at that as a cost worth paying if it diminishes the need to send our soldiers into harm’s way to defend our oil supply. Or you can look at it as an absurd way to spend our money when the far more urgent and obvious need is to break the oil addiction.

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