Fox Business' Claman: "Even The Transcanada People Say [Keystone XL] Would Only Shave 3 Or 4 Pennies Off The Price" Of Gas

Gingrich thinks he's a wizard

gas pours from water taps

It's the oil industry and the speculators doing what they can to try and damage Obama's re-election chances.

If you're old enough, you may remember paying $100 for a calculator.

I believe that we need to concentrate on how we can increase our gas comsumption [sic] domestically

Let me predict the next talking point right now: with gas prices rising, the pipeline will let Americans fill up for less.

This is nonsense on many fronts, most of all because the price is oil is fundamentally set on global markets. As the Congressional Research Service pointed out in late January, when there's trouble in places like the Straits of Hormuz, the price of oil goes up for everyone and Keystone will make no difference, since the oil market is "globally integrated"; it’s not like Exxon offers a home-country discount to American motorists.

But in the case of the Keystone pipeline, it turns out there's a special twist. At the moment, there's an oversupply of tarsands crude in the Midwest, which has depressed gas prices there. If the pipeline gets built so that crude can easily be sent overseas, that excess will immediately disappear and gas prices for 15 states across the middle of the country will suddenly rise. Says who? Says the companies trying to build the thing. Transcanada Pipeline's rationale for investors, and their testimony to Canadian officials, included precisely this point: removing the "oversupply" and the resulting "price discount" would raise their returns by $2 to $4 billion a year.

According to the National Wildlife Federation, that would translate to about $3 for an average 15-gallon fill-up - as independent energy economist Philip Verleger put it, with Keystone the industry "will be able to use its market power to raise the heavy crude price to Midwest refiners above the level that would prevail in a competitive market."