Effects of Keystone XL pipeline closure on energy prices
An ag economist does NOT believe closing the Keystone XL pipeline will impact energy prices in the short term.
As one of his first moves, President Biden issued an executive order to block the Keystone XL pipeline that carries crude oil from Canada to the US. Scott Irwin with the University of Illinois says it could be a signal of further regulatory moves to scale back the fracking revolution.
“That could have implications for crude oil and natural gas prices moving forward. So, the pipeline itself I don’t think is going to have a big impact short term, but if we keep moving in that direction, then I think we will start to have some noticeable impacts on energy prices.”
For farmers trying to factor in 2021 fuel prices for the upcoming planting season, Irwin says there are other price drivers, like the recovering economy putting pressure on crude oil supplies.
“That, in combination with OPEC (Organization of the Petroleum Exporting Countries) and Russia’s policies about their production sharing agreements. Those are the two big ones for energy prices.”
Biden says leaving the Keystone XL pipeline in place would not be consistent with his administration’s economic and climate goals.