February 3, 2014
CONTACT: Zack Fields
(907) 258-3077
Economic Analysis Confirms Keystone Could Harm Alaska Competitiveness

At oil prices below $75/bbl, Keystone XL makes Alberta more profitable & could diminish Alaska investment

ANCHORAGE:  An updated economic analysis of Keystone XL finds that at low oil prices the pipeline would increase the profitability of Alberta tar sands production and increase the quantity of oil produced from tar sands.  By confirming that the pipeline changes the economics of Alberta tar sands production, this new economic analysis also confirms that Keystone would make Alaska relatively less attractive for oil investment compared to Alberta, with negative implications for oil investment and long term production in Alaska.

“The economics are straightforward: Keystone is a great deal for Alberta and a lousy deal for Alaska,” said Mike Wenstrup, Chair of the Alaska Democratic Party.  “We hope the President will stand up for Alaska and veto legislation mandating the Keystone pipeline.”

The Alaska Democratic Party put Senator Lisa Murkowski on the defensive by noting the likely impact of Keystone at low oil prices.  Since oil companies make investment decisions based on marginal profitability, any project that reduces Alaska’s profitability compared to our competitors would encourage oil companies to invest elsewhere.  Less oil development investment in Alaska has negative economic and budgetary implications for the state.