Today we have part 3 of our discussion of oil prices, including a discussion of a few topics suggested by readers. You can read part 1 here and part 2 here. As always, I welcome feedback about topics you would like to learn more about and that we can examine.
Today we cover:
The Keystone XL Pipeline
The War in Ukraine and its impact on oil prices
The Biden administration: Who is to blame for higher oil prices?
What impact did the cancellation of the Keystone XL pipeline have on the price of oil?
Keystone XL is a proposed oil pipeline that runs from Canada down to the Gulf Coast of the US (see map).
The pipeline would help to bring additional Canadian oil into the main pipeline networks that run throughout the United States. Oil from Canada has pros and cons. On the one hand, it is the most expensive oil to produce. It comes from the Alberta region of Canada from these giant pits called Tar Sands. Oil from tar sands is high in sulfur, it is hard to refine, and the cost to make it useable is high. I would guess that tar sands oil is only viable when the price of oil is about $80 or higher.
On the other hand, Canada is our ally. Oil from Canada doesn’t come with the same geopolitical risk as oil from someplace nastier, such as Venezuela or Iran, or Russia. Canada isn’t launching a war to invade a neighbor.
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