Date of Award

6-2013

Document Type

Open Access

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Stephen Schmidt

Language

English

Keywords

impact, pipeline, crude oil, prices

Abstract

This paper determines the economic impact of the TransCanada Keystone XL pipeline project. As the Keystone XL pipeline is extremely controversial it is beneficial to determine the impact on North American crude oil prices. Determining the economic impact the Keystone XL pipeline will have on crude oil prices will be a large detriment of whether the pipeline is economically beneficial. By using spot crude prices from different regions around North America and adding capacity of crude oil transmission from western Canada to southeast United States this paper determines the changes in regional spot crude oil prices. As the economic conditions in North America is still in trouble this Keystone XL project has the potential to stimulate economic growth by increasing the price in the Midwest and Canada. Environmental issues will be addressed but the focus of this paper will be an economic evaluation of the Keystone XL project. The resulting calculations show that by implementation of the Keystone XL pipeline the spread between western Canadian, WTI and Brent crude oil prices becomes smaller.

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