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According to the interview in the radio and information gathered, crude oil price could increase for combined reasons.

First, the purpose of North gateway pipeline is to take advantage of Asia premium and to sell crude oil to Asia market[i]. Obviously, Company is more willing to shipping oil to Asia rather than sell domestic. Less supply and company’s unwillingness to sell at the original low price can push the price up. Also, with the access to Asia market, the increasing demand of countries like china will ultimately shift the price up.

Second reason is price to pay for the environmental cost. Though Enbridge Corporation announced that they are following the “world class safety standard”, this company has over 770 reportable oil spills from 2008~2010. And cleaning cost can be very expensive. For example, Kalamazoo spill in 2010 cost Enbridge $765 million in 3 months, but only 3 miles out of the 39 miles long river open to the public. [ii] It has no way to dramatically increase construction quality in a short period of 1 year. Third, the cost of the construction, of course, may lead to a direct increase in crude oil.

Finally, because of already high price of gasoline, Canadian refiner has to swallow the price to keep the competitive advantage[iii].

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