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Many Canadian politicians have invoked the argument that because western oil is landlocked it’s not fetching international prices and therefore is being sold at a discount. If Canada could build more pipelines such as Keystone XL or the proposed Northern Gateway through British Columbia, it would reach tidewater ports where it would attract world prices, the so-called Brent and West Texas Intermediate prices.

The second part of the discount comes from backlogs at U.S. pipeline terminals that can result in lower prices for some Canadian heavy crude oil.

But is there any truth in the “double discount”?

Energy economists say that the situation is not nearly as cut and dry as the politicians pretend. Some call the claim “bogus.” World prices are based primarily on quality and so Canada’s bitumen, which has the lowest quality of the heavy oils, naturally fetches lower prices. Sending the oil sands bitumen to Gulf Coast refineries is not going to change that fact, they note.

“It just doesn’t make any sense,” Michal Moore, an energy economist at University of Calgary, said of the discount argument. “Anything that does not meet that quality standard is going to trade at a discount relative to Brent. All that discount means is that any refinery owner is going to pay less for something they have to spend more time and energy to upgrade. That’s all it means.”

Warren Mabee, director of the Institute for Energy and Environmental policy at Queens University, said the discount claim “is kind of bogus” If only because it is impossible to predict future prices.