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Editorial on Keystone misses many factors

March 1, 2013
The Alpena News

I was surprised by your Viewpoint on energy in Wednesday's paper. That drilling (here, building a pipeline to connect wells) will lower energy prices in the U.S. is an old canard.

The Keystone pipeline will allow Canada to increase its exports; our neighbor is awash in hydrocarbons. Does that lead to lower prices at the pump in Ontario, after adjusting for taxes? No.

What matters is the global supply and demand for energy. In the 1950s we were the world's dominant economy and the dominant market for energy. Supply and demand meant U.S. supply and demand. By 1973 that was no longer true; the first oil crisis reflected a simultaneous economy boom in the U.S., Japan and Europe, as the latter two were by then big enough to matter. We're now an even smaller share of the (much bigger) global economic pie.

The initial Keystone route was picked for the convenience of construction, and failed to take into account not-in-my-backyard considerations. We expect our politicians to respond when outside interests try to override local concerns. The delays to Keystone - because it will get built once routing is worked out - reflect an appropriate functioning of our political system. In due course the project will contribute to global supply, but the increment will be small, too small by itself to affect the price at the pump.

Mike Smitka

Rogers City

 
 

 

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