Oil prices low now – but what about down the line?

Monday, January 11, 2016
 | 
Chris Woodward (OneNewsNow.com)

pipeline 620x300While some consumers may enjoy the fact that oil prices are down, what does that mean for energy companies and the projects they're pursuing?

One of the arguments made about the Keystone XL pipeline and other fossil fuel projects is that "there's no money in it" for oil companies, especially with oil prices being as low as they have been in recent months. But Dan Kish, senior vice president for policy at the Institute for Energy Research, points out that many projects aren't started for today, but rather for tomorrow.

Kish, Dan (IER)"And you know that those prices go up and down," Kish continues. "We see it all too often and we're all enjoying the low prices we're getting now – and I'm thinking that prices are going to dip yet some more – but ultimately we're going to be using oil in this country. Consumption went up 2.5 percent in December for gasoline, and so we're going to need these pipelines in the future."

In the meantime, Kish says a bigger economy needs more energy, and more energy means a bigger economy.

"I always hate to second-guess these folks," he admits. "They're making decisions. They wouldn't put their money in it if they were in it to lose it."

TransCanada filed a lawsuit last week over the U.S. government's rejection of the Keystone XL project. The company also announced it plans to file a second legal challenge that it will seek more than $15 billion in damages. TransCanada says President Obama's decision in November to kill the pipeline exceeded his power under the U.S. Constitution.

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