Steve Beaman: Oil Price Plunge Lessens Importance of Keystone Pipeline

While the Keystone (oil) Pipeline remains in the country's interest, its short-term importance has lessened as a result of the 55 percent drop in oil prices since mid-June, Steve Beaman, chairman of The Society to Advance Financial Education, told Newsmax TV.

Oil prices have dropped to a 5 ½-year low, with U.S. crude trading at $48.25 a barrel Tuesday afternoon. Regular gasoline prices have dropped to an average of $2.19 a gallon from $3.32 a year ago, according to AAA.

"The psychological effect of gas at this price is really to negate the interest of the general consumer in the Keystone Pipeline," Beaman told Newsmax TV's "MidPoint" program.

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"Long-term, it's still in our interest. Near-term, that's really going to hurt people in the North Dakota type areas. These prices are going to hurt people in Pennsylvania and Texas."

Keystone's importance also will diminish on the Republican congressional agenda for the economy, Beaman said.

"What they'll try to do is reignite some of the bills they put forward in 2014 related to regulatory changes, a little bit of tax modification, certainly corporate income taxes will come high on the agenda," he said.

"Obama is going to have to give on some of it. He's been talking about wanting to work with this Congress. He's going to have to meet them in the middle, certainly on the corporate tax issue as well as regulatory issues."

As for the dollar's strength, it will make U.S. exports "a little less attractive, but US imports a little more attractive," Beaman said. "So it benefits the consumer, which is part of the reason we saw 5 percent economic growth" in the third quarter.

U.S. authorities want to keep the dollar strong so it will remain the world's primary reserve currency, he explained.

When it comes to Europe, the turmoil in Greece — it will hold an election later this month — could end in an "unraveling of the European Union," Beaman said.

"The effect of that on the United States depends how it breaks up," he said. "Russian President Vladimir Putin is trying to put together this Eurasian trading partnership, and a breakup of the European Union would certainly help him do that."

But Germany, France, and the United Kingdom would maintain their alliance with the United States, Beaman said. So most likely, "we [the United States] wouldn't see a huge impact from it, but it would create great instability in the global currency markets."

To be sure, given all the anger Putin has triggered in Europe with Russia's invasion of the Ukraine, the idea of him putting together a Eurasian trading partnership, "which seemed like a possibility a year or two ago, now is getting a real look again to say, well, maybe not," Beaman pointed out.

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