Keystone Pipeline Leak Consequences Spill Over into Gas Prices, National Economies
U.S. gas prices declined during December, but this relief at the pump could soon revert due to a significant oil spill from the Keystone pipeline leak.
An estimated 14,000 barrels of crude oil spilled into a Kansas creek, forcing the pipeline’s closure on December 7, 2022. Adding to the concerns over a prolonged shutdown are the low crude reserve stockpiles in Cushing, Oklahoma, the nation’s largest storage hub. It is too soon to know what the short-term effect will be on U.S. gasoline prices, but the longer the cleanup and repair effort take, and the Keystone Pipeline remains off, the higher prices will eventually hit consumers. Cleanup efforts in Kansas are currently underway.
Tim Snyder, Economist at Matador Economics, is keeping a close watch on the situation and is aware of the potential severity a lengthy shutdown will have on the U.S. and Canadian economies.
Tim’s Thoughts
“An operating section of the TC Energy’s existing Keystone Pipeline that carries Canadian tar sands crude from Canada to the United States Storage Hub in Cushing, Oklahoma has been shut down because of a 14,000 barrel leak into a creek in Kansas. Prices are already falling in Canada as that tar sands crude has no place to go and we are anticipating a price rise here in the United States as this vital pipeline remains closed, pending investigation and repairs. On a side note, the storage hub in Cushing, Oklahoma is already very low, showing it is only at 31% of its crude oil capacity.”
