Posted: 12:00 p.m. Tuesday, May 15, 2012

Will new oil pipeline lower gas prices?

By Jim Strickland

The first pipeline linking Canadian oil to Gulf Coast refineries is scheduled to open this week, but there is debate over whether it will help ease prices at the pump.

Channel 2 consumer investigator Jim Strickland went to the Alberta oil sands, the national oil hub in Oklahoma and the Houston refining complex for answers.

Suncor Energy mining director Lynn Gould told Strickland that piping oil from Canada will make a difference in Atlanta gas prices.

"So you're at a line up for gasoline in the southern states and you're paying for a product that got loaded up on a boat and was shipped over from the Middle East. That's got to be more expensive than piping it from your neighbor next door," Gould said.

Though Canadian oil is 15 percent cheaper, refiners use 10 Saudi Arabian barrels for every Canadian barrel.

Cenovus Energy Senior Vice President Alan Reid said he also believes the new pipeline will mean better gas prices for Atlantans, but there are doubters.

“I don't see any way it's going down to $2.50 (per gallon). There's no possibility of that," said oil analyst Laura Atkins outside a Texas refinery.

"In general, I think we're going to be in a good, long while for pretty high gasoline prices," echoed analyst Greg Haas.

They pointed out that gas prices shot up when the American thirst for gas was actually dropping. Analysts also said the recent price drop is related to fears over the European economy and a lagging U.S. recovery.

Atkins and Haas said until recently, global demand has driven oil prices higher, and once oil is loaded onto a tanker, crude oil is free to seek its best price in markets around the world.

Haas said even in oil country, gas prices in Houston remain high because so much gas gets siphoned off. And in Canada's petroleum capital of Calgary, Alberta, Strickland found gas prices, including taxes, were nearly equivalent to prices in Georgia.
 
A federal report also showed Gulf gasoline exports have tripled in three years, so there is no great surplus stockpiled. 

"We do have the oil sands and yes, they do pay very well, but we still pay for our oil," said Canadian driver Chad Long.

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