Tags: Hyman | Keystone | oil | prices

Sean Hyman: Keystone Pipeline Necessary to Keep Oil Prices Low

Wednesday, 18 Dec 2013 12:00 PM

By Dan Weil

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The Keystone XL oil pipeline, which would transport oil from Canada to the U.S. Gulf Coast, is needed to prevent a jump in U.S. oil prices, says Sean Hyman, editor of Newsmax's Ultimate Wealth Report newsletter and a Moneynews.com contributor.

With oil demand rising globally, "you have to keep the supply growing to cap or at least slow down the ascent of oil and gasoline prices," he tells Fox News.

"By making this pipeline, which will take two years to complete, they could pipe more oil down here to keep fuel costs low, which would help us economically."

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The United States imports about half of its oil, and can get that oil either from the Mideast or Canada, Hyman says. "We're choosing more from Canada, because it's obviously in our better national interest," Hyman explains.

So, "it's not a matter of if we'll use this Canadian oil, it's how will we transport it and if we'll be able to use more of it," he adds.

The oil is now coming by rail, and that's largely because of Berkshire Hathaway's ownership of Burlington Northern Santa Fe railroad, which it bought in 2010, Hyman argues.

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"Warren Buffett [Berkshire's CEO] made a huge bet on the railroads, . . . and that has a lot to do with why a whole lot of oil is traveling by rail," he alleges.

President Obama is expected to decide next year whether to grant approval to the Keystone pipeline.

"I think that it does have a shot of getting built, but I think it will be hindered because of the Buffett bet," Hyman contends. "Buffett wants all those railcars to be carrying oil and not be going through the pipeline."

But that doesn't detract from Keystone's value, Hyman says. In addition to carrying Canadian crude, it would also transport oil from the Bakken region in Montana and North Dakota.

And, "they can increase the [pipeline's] safety by putting in multiple shutoff points," he maintains. "It's free to us as Americans. Canada will pay for it. It will create jobs. . . . It's a win for us."

An estimated 830,000 barrels per day of oil would be shipped on Keystone, Hyman predicts. That's not a huge amount, given that we use about 15 million barrels per day. But, "it would help."

Meanwhile, the Energy Department predicted in a report Monday that U.S. oil output will reach 9.5 million barrels a day in 2016, nearly matching the 1970 record of 9.6 million.

The study "confirms that the United States really is experiencing an energy revolution," energy historian Daniel Yergin tells The New York Times.

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