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Could a new fuel pipeline help lower gas prices?
A major new pipeline project is in active development, and it could cheaper gas to Arizona. However, there are still some hurdles up ahead for the project. FOX 10's Brian Webb reports.
PHOENIX - High gas prices are hitting drivers hard currently, but some experts believe relief may be on the horizon, as a major new pipeline project gains steam.
The backstory:
Currently, there are no refineries in Arizona, and there are also only two major pipelines in the state. Meanwhile, Phoenix currently has one of the most expensive fuel markets in the nation.
"Prices in Phoenix will go up when nobody else’s prices are going up, because we can’t get enough gas to the state," said Dave Hackett of Stillwater Associates. "Essentially, what’s happened is Arizona’s growth just about outgrew its pipeline capacity."
Big picture view:
The Western Gateway pipeline project just went from proposal stage into active development. It would add another fuel source to Arizona, and it could stabilize or even lower prices at the pump.
The project would add a new stretch from the Texas panhandle to Phoenix that is capable of delivering 200,000 barrels a day of gasoline, diesel, and jet fuel.
The fuel would come from cheaper markets in the Midwest and Gulf Coast, and should lower gas prices.
"It certainly should. I don’t know what the difference is going to be, but it should lower the cost of getting the fuel to Phoenix," said energy expert Ed Hirs. "It has enough consumers and suppliers lined up that it makes sense to build a pipe of the size, otherwise it really wouldn’t make any difference."
By the numbers:
The pipeline is being developed by Philip 66 and Kinder Morgan. It could cost those companies more than $5 billion. And be complete by 2029. Plus, it may make Arizona even more attractive for investment with a stronger, more stable energy supply.
"If you think that growth is going to be constrained by the problems with fuel supply, then if you solve the fuel supply problemm growth with continue," Hackett said.
What's next:
There are several remaining risks and uncertainties, including environmental and regulatory approvals, construction costs, and political opposition to remaining reliant on oil.
The Source: Information for this article was gathered by FOX 10's Brian Webb.