Is it merely coincidence that gas prices have been escalating at alarming rates (with few justifications in the underlying fundamentals), precisely as the oil industry is trying to ram through approval of the Keystone XL Pipeline? Experts cite concerns about Iran's threat to shut down the Straits of Hormuz. And speculators play a larger role than ever (despite restrictions that were to be applied to speculators under Dodd-Frank.) But the run-up in prices at the pump defy explanation with these factors alone. After all, Americans are burning substantially less gasoline than in the recent past.
We have here the perfect timing. A Presidential Campaign in which the opposition candidates can stoke the fears of their constituents. Americans are being warned that $5.00-a-gallon gasoline may be just around the corner. But if we build the pipeline, prices will come down. (And Newt Gingrich tells us he'll deliver $2.50 gasoline to Americans!)
I think what we are seeing here is TransCanada (the pipeline owner) doing the bidding of the petroleum oligopoly. The oil companies need their Alberta tar sands oil to reach the world market (not necessarily the American market, which is already glutted to such an extent that we are exporting gasoline.)
It's curious that one of TransCanada's lobbyists formerly worked as a deputy campaign manager for Hillary Clinton, and that it is Clinton's State Department that ultimately makes the call on the international pipeline treaty. And the Obama campaign has hired another former TransCanada lobbyist for his 2012 Presidential bid.
The tar sands oil production is unlikely, in the near term, to impact the global market price for oil. There won't be enough of it flowing. And it is NOT in the interest of oil companies to increase production to the point of putting downward pressure on oil prices.
But the Keystone XL pipeline (and the embattled Enbridge Northern Gateway Pipeline across British Columbia) will deliver some of the heaviest and dirtiest oil to refineries, enabling Canada to sell on the world market. The risks of spills and pollution from refining are born by the people along the pipeline's route. Land stolen by eminent domain will subsidize the oil companies. The price of gasoline is unlikely to fall, as this is set according to global supply and demand, the product flowing to the highest bidders.
For the oil companies, time is of the essence. The relatively new tar sands industry is largely unregulated. But as the world community awakens to the devastation being visited upon the Canada's boreal forests, and the immense conversion of sequestered to free atmospheric CO2 resulting from this mining, the tar sands mining will eventually be severely curtailed, if not terminated.