Pros And Cons Of The Keystone XL Pipeline

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The Keystone XL Pipeline has been a controversial topic for the past seven years, first proposed in 2008 it still garners widespread debate. The KXL Pipeline is the fourth phase of a proposed crude oil pipeline that will run south from the Alberta oil sands to the refineries in the U.S. With the economic and environmental implications of such a large project so close to home such an undertaking would also impact all of the local communities as well as economies all over the world. For that reason how should the US government decide the pipeline’s future, taking into account the economics of the venture? Through the economic lens I will be pursuing the effects of the pipeline on local and global economies while my partners view the venture from…show more content…
As basic macroeconomics dictates an increase in supply leads to lower prices and a surge in demand, this would imply that as the construction of the KXL pipeline leads to a larger supply of oil the price of crude oil will drop and the demand for it will in turn escalate. This could be both beneficial and detrimental to the international economy as it opens up the opportunity and the need for more pipelines and other equivalent investments, CEPA claims that KXL and other “proposed pipeline projects could help Canadian energy access new markets and enable prosperity for generations of Canadians” (CEPA). However, if taken too far a surge in the global oil supply could also lead to _________ which would negatively impact the already declining oil prices. An example of this would be an earlier proposal to build a pipeline (not related to the KXL pipeline) from Alaska to the Midwest which, after having been approved, was never built because the discovery of gas in other states lead to a decline in gas prices by two-thirds of its original price (Mullaney), making the project…show more content…
The report further mentions that “rising emissions [leads] to climate instability and this, in turn, results in an increase in economy-damaging, extreme weather events” (Cornwell University 30) which coincides with a study done by NYU Law School’s Environmental Law Center which estimates that “burning the recoverable tar sands oil will increase the earth’s temperature by a minimum of 2 degree Celsius, which…could permanently cut the US GDP by 2.5%” (Smith). This cements the resolution that the KXL pipeline is unbeneficial to the economy and that its construction will only lead to higher costs and environmental destruction. On another note Kinder Morgan, another company known for its controversial pipelines, released a 15,000 page report about their trans mountain pipeline, in it they mention that “marine spills can have both positive and negative effects on local and regional economies over the short- and long-term” (Kinder Morgan 615). They reason that the services and supplies needed to clean up an oil spill would contribute

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