Although Congress is pushing toward a vote on the Keystone XL pipeline, one question regarding the controversial energy project remains subject to debate -- whether it would lower or raise U.S. gas prices.
Keystone would transport crude oil from the tar sands regions of the Canadian West, across parts of the U.S. Midwest and down to refineries on the Gulf Coast for potential export overseas. The House of Representatives on Friday passed a bill expediting construction of the pipeline, which has been delayed for years because of political opposition and concerns about its environmental impact. The Senate will consider a similar measure on Tuesday.
Some critics contend that the pipeline could cause gas prices to rise, especially in the Midwest.That's because the oil that would be transported is not intended for American consumers. Rather, the Canadian oil currently sent to refineries in Illinois, Ohio and elsewhere in the Midwest would end up being diverted to Keystone, chiefly for export to markets overseas.
"Midwest drivers would be hardest hit because the region currently imports more than half of its oil for refining from Canada," according to Consumer Watchdog, a nonprofit public interest group. "Increases at the pump could range from 25 cents to 40 cents a gallon, depending on how regional refineries respond to paying $20 to $30 more per 42-gallon barrel for Canadian crude oil."
A 2011 report by Cornell University's Global Labor Institute projected that the Keystone's rerouting of oil from the Midwest would end up costing the region up to $4 billion in higher gas prices, which it said would "suppress other spending and will therefore cost jobs."
But James Bambino of Platts, a provider of energy, petrochemicals, metals and agriculture information, said that while the Midwest might endure higher prices at the gas pump due to Keystone -- and the Gulf Coast might see lower prices -- the pipeline could benefit the overall North American crude oil market.
Even without the Keystone pipeline, the U.S. already imports a record amount of Canadian oil, at nearly 3 million barrels a day, much of it originating from the oil sands in Alberta, he told CBS MoneyWatch.
If Keystone were approved, Bambino thinks it would likely raise the value of Canadian crude oil, while pushing the global price of crude lower because of the increased supply.
"It could be seen as a benefit for Canada in terms of higher prices, compared to what they get today," he said. "But ultimately it could lower the global price of oil, because there would be more supply on the market."
With gas prices are at four-year lows and the OPEC oil cartel meeting later this month to decide whether to slow production, Bambino said it is hard to predict how prices will behave in the years to come. After all, Keystone would not go into effect for several years after it was approved. Meanwhile, gas prices are largely the result of worldwide economic demand.
"It's difficult to say where oil prices are going to move, both in the near term and in the future, when Keystone may be a reality."