Monday, July 11, 2022

A Letter the Editor of the Tulsa World

 A letter published about Keystone XL Pipeline was way off. There were 2 erroneous errors in that argument. 1. All that oil was going to export anyway. Response, that's not how modern gas pricing works. Gas prices are mostly determined by the overall prices of crude oil. When we had low gas prices it was because there was a glut of crude oil. The commodities market prices is determined by futures buy / sell contracts. For example, today's gas prices are based on futures contracts from last month. The Keystone XL Pipeline shortcut would have brought in a large quantity of crude oil into the global market. That would in turn have caused speculators to bid for lower prices on futures market. The ripple effect would cause petroleum prices to go down. Eventually leading lower fuel prices. 2. The other point I want to make is that the shortcut through Montana would have allowed local crude oil producers to add their higher quality product to the pipeline. The global commodities market doesn't care if refined petroleum is sold local or exported. Just supply and demand. What we need right now is, too much supply, as to make life more affordable.