President Joe Biden’s cancellation of the Keystone XL Pipeline will cause energy costs to increase, numerous critics say.
The Keystone XL Pipeline was intended to transport oil from Canada’s oil sands to refineries in the gulf coast. It was approved by former President Trump in 2017, but revoked by President Biden in January. According to the Battle Creek Enquirer, it would have transported 30,000 barrels of oil a day 1,700 miles from Alberta, Canada to Gulf of Mexico refineries.
Director of Economics and Professor of Political Economy Gary Wolfram told The Center Square that the cancellation will increase fuel and petroleum derivative prices across the nation.
“The halting of the Keystone pipeline is going to increase the cost of natural gas and oil … that will result in less output,” Wolfram said.
Products that will have increased prices as a result of the cancellation include “petrochemical products range from generating heat, electricity, inputs in plastics, synthetic materials and asphalt, personal protective equipment, COVID-19 vaccine vials, and even timed-release capsules in aspirin,” according to Wolfram.
The Keystone Pipeline would have resulted in many economic gains in the U.S. if it had been allowed to continue.
In an interview with Battle Creek Enquirer, Wolfram said that oil exports from the pipeline would have increased the GDP, reduced the trade deficit, and minimized the U.S.’s use of foreign oil. Increased oil supply would have also stimulated the economy.
“As oil is an input into many products besides gasoline, and as gasoline and diesel fuel are inputs into many goods and services, in particular the transportation of goods, the building of the Keystone pipeline would have increased overall economic activity in the U.S,” Wolfram said.
Additionally, the Keystone Pipeline would have increased construction jobs. According to Fox News, 11,000 jobs would have been created in 2021, 8,000 of which would have been union jobs. Wolfram told the Collegian that the pipeline’s cancellation will cause oil transportation to be done less efficiently, such as by trains or trucks, increasing chances of oil spillage and raising emission outputs.
“As for its effect on Hillsdale County, the increase in the price of oil, natural gas, and products derived from them will obviously affect Hillsdale County as it will the rest of the country,” Wolfram said.