The failure to move ahead with the construction of the Keystone XL oil pipeline, as regular readers will know, has cost the U.S. in all sorts of ways—in diplomatic relationships, in energy security, and in jobs. About a month ago, Via Meadia covered a story that pointed to yet another loss: By forcing American refineries in the Gulf to import more expensive Brent crude rather than the cheaper West Texas Intermediate variety, the status quo is frittering away national wealth and GDP.
This recent story from the WSJ’s MarketWatch notes that the problem is getting more acute. Geopolitical tensions with Iran and an unusual cold spell in Europe have Brent crude prices climbing, while WTI is getting cheaper due to a supply glut in Oklahoma, where oil is more difficult to transport to the Gulf for refining. As a result, the spread between the two prices is widening, more than doubling since the start of the year.
This is an unnecessary drain on American companies and the nation as a whole. So far greens have proposed one solution: taxing those evil oil companies. Via Meadia has an alternative solution: build the pipeline, allow big refiners to profit, and tax some of the excess.
This seems like a rare issue on which blues, greens, and capitalists should be able to come together in agreement. If you are wondering why we aren’t seeing more progress, so are we.