Media Advisory: Keystone Positive for American Consumers & U.S. Energy Security Would Put Downward Pressure on Gas Prices IHS CERA Report Suggests

CALGARY, ALBERTA--(Marketwire - June 7, 2011) - A new report released by IHS CERA concludes Keystone XL would be a big positive for American consumers and U.S. energy security. This was one of the findings in a special report entitled 'The Role of the Canadian Oil Sands in the US Market: Energy Security, Changing Supply Trends and the Keystone XL Pipeline.'

IHS Cambridge Energy Research Associates (CERA) is a leading advisor to international companies, governments, financial institutions and technology providers. The organization delivers critical knowledge and independent analysis on energy markets, geopolitics, industry trends and strategy.

The report highlights that U.S. pipeline infrastructure needs to catch up with changing supply trends and expanding supply – from Canada and the Bakken oil formation in North Dakota and Montana. The 700,000 barrels per day Keystone XL pipeline would foster higher production and greater use of North American oil in the U.S. market, according to the report. It states that 'economic logic dictates that more supply results in lower prices for a given level of demand'.

The special report addresses the specific question of: 'When is the new pipeline required and could this pipeline affect gasoline prices?'.

Answer: 'By 2015 oil sands exports will likely exceed refining capacity in the US Midwest - currently the main market for oil sands output. Keystone XL will increase supply to the broader US market - namely the US Gulf Coast. For a given level of demand, higher supply would lower prices for crude oil, which is the most important factor shaping gasoline prices'.

The report also answered the question of 'What are the incremental GHG emissions associated with consuming oil sands?

Answer: 'The increase in GHG emissions from oil sands, and consequently from the proposed pipeline, is not as high as is often perceived. On a life-cycle basis, GHG intensity of the average oil sands import is about 6 percent higher than that of the average crude oil consumed in the United States'.

IHS CERA goes on to say that life-cycle GHG emissions from the oil sands are comparable to those of many other crude oils consumed in the United States. The GHG intensity of likely crude substitutes is closer to that of oil sands than some believe.

IHS CERA concluded that U.S. Gulf Coast refineries consume large volumes of heavy crude oils – crudes that are similar in quality to much of the future oil sands supply. Without new oil sands crude supply, Gulf Coast refiners will continue to process heavy crude oils from elsewhere.

The report goes on to say that 'considering a scenario of oil sands crudes being transported to distant locations while other global crudes are transported from distant locations to the US Gulf Coast, it's likely that GHG emissions could be somewhat higher' (because more energy would be consumed in transportation).

The IHS CERA Report 'The Role of the Canadian Oil Sands in the US Market: Energy Security, Changing Supply Trends and the Keystone XL Pipeline.' can be found at

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