Keystone XL cancellation could lead to higher prices at the pump: Energy advocate

You could be paying more at the pump as early as this summer.

The Keystone XL pipeline was officially cancelled last Wednesday. The project would have moved up to 830,000 barrels of oil a day.

Dan McTeague, the president of Canadians for Affordable Energy, said the project’s cancellation will cause gas prices to rise.

“Cement in place a permanent 10-cent-per-litre increase. There could be days where that could drop, but I don’t see that in the cards anytime soon,” he said.

He predicts that increase as early as this summer.

However, McTeague is most concerned about what the cancellation signals and how it will affect the economy moving forward.

“This decision … is really a symbol of a larger, fundamental problem that I think most Canadians have been able to ignore for some time. We have a wealthy country, but that’s likely to be severely challenged over the next couple of years as our No. 1 economic engine takes a severe hit,” he continued.

He said the cost for most products in Canada could go up if major oil and gas projects don’t go forward. Much of the economy in the country is dependent on the energy industry, and fossil fuels are widely used for things like heating homes and creating electricity.

“Most Canadians who understand energy and use energy — whether it’s our agricultural sector, whether it’s our mining sector, whether it’s our factories — all know the significance and importance that running our daily lives requires some degree of hydrocarbons,” he said.

According to McTeague, that means continued efforts to move away from fossil fuels will make life much harder in Canada.

“Being able to turn on your (light) switch, turn on your air conditioner in the summer, turn on your furnace in the winter … Without these things, we are likely to see a dramatic decline in our standard of living,” he said.

“The world is not coming to an end in 10 years. What is coming to an end is our vaunted standard of living and our affordability.”

He believes higher prices may change people’s minds on fossil fuels.

“I suspect that what we’re going to be seeing here in the next little while is a retrenchment in the thoughts that we can somehow wish away fossil fuels,” he said.

“The world is not going to get rid of fossil fuels anytime soon. Nobody in their right mind will say it could be done in the next 50 years. There are no technologies that can readily displace or replace (oil and gas).”

He also believes Keystone XL’s cancellation is a sign that other pipelines, like Enbridge’s Line 5, could face a shaky future.

“This signals that Canada’s not a very good place to invest any money,” McTeague said.