HOLIDAY READING: Jobs and the Keystone XL Pipeline Controversy

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HOLIDAY READING: Jobs and the Keystone XL Pipeline Controversy
Jobs and the Keystone XL Pipeline Controversy; Some factions want the pipeline, some hate the idea. Would the project help a floundering economy and increase employment?
Herman K. Trabish, November 10, 2011 (Greentech Media)

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President Obama faces a moment of truth as he confronts the decision of whether to allow or stop TransCanada Corporation’s proposed Keystone XL (KXL) pipeline. The question the president must answer is whether the pipeline is in the country's best interest.

The pipeline would be an international undertaking to move oil eked out of the Athabasca tar sands in the Canadian province of Alberta 1,700 miles to refineries on the Texas Gulf Coast. It would be a new supply of North American petroleum that is likely the quantitative match of the world’s richest oil reserves.

The American Petroleum Institute has declared that stopping the pipeline would “weaken America’s energy security” and be a significant failure for the nation’s “energy future.”

Environmental advocates say the project undermines the emerging greentech economy. Renowned NASA climate scientist James Hansen has called unrestrained development of the tar sands “game over” for the planet.

With scrutiny, questions have emerged about the State Department’s environmental review of the project, which found that protection measures would prevent “significant impacts.” State’s inspector general therefore announced a "special review" of KXL. This gives the president time to reach a final, politically fraught decision, which the White House has said is “months away.”

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Tar sands are not exactly oil, but rather a mix of tarry crude (called bitumen) with sand, clay and water. Getting at the tar sands is not a matter of drilling but of digging.

Greentech Media Editor-in-Chief Eric Wesoff conclusively made the case against petroleum products extracted from tar sands some time back. Exploiting it and refining it into useable form is prohibitively expensive. That will help keep the price of gas at the pump high.

Exploiting the tar sands deposits is also devastating to the environment. To access the tar sands, boreal forests are torn away. Bringing the product up requires vast quantities of water, as well as toxic chemicals, and leaves lakes of toxins behind, often near waterways.

Oil industry plans call for piping the raw extract to Gulf Coast refineries which, with the help of costly high-tech retrofits, will be able to turn it into useable fuels. A September 2011 Oil Change International paper reported that those refined fuels will be largely used for export.

Resistance to TransCanada Corporation’s proposed Keystone XL (KXL) pipeline has grown from a small group of dedicated activists to opponents across the political spectrum.

At one end of the spectrum are Midwestern conservatives determined to conserve the Ogallala Aquifer, which KXL is routed to pass through. A spill would threaten drinking water for two million people in eight states and a $20 billion agriculture industry.

At the other end, activists surrounding the White House last weekend linked their “Stop the Pipeline” cause to the ongoing Occupy movement, marching under signs bearing the slogan “Occupy Earth.”

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But polls show that the public’s attention is focused on the economy and jobs -- and there
is important news concerning KXL on that front.

The American Petroleum Institute and TransCanada have research showing the pipeline will support some 85,000 U.S. jobs in 2020 and that development of the tar sands could create 600,000 U.S. jobs by 2035.

However, Pipe Dreams? Jobs Gained, Jobs Lost by the Construction of Keystone XL, a recent report from the Cornell University Global Labor Institute, found some shortcomings and oversights in the API study:

1. The API claims assume a $7 billion KXL budget, whereas the actual figure bearing on U.S. jobs is $3 billion to $4 billion;

2. TransCanada supplied data to the U.S. State Department showing no more than 2,500 to 4,650 temporary direct construction jobs over two years, and there is no substantiation for its related claim that KXL will create 20,000 direct U.S. construction and manufacturing jobs;

3. Much of the line’s steel pipe has already been contracted for or manufactured. The steel came largely not from the U.S. but from India, and much of the steel for the rest the line will come from India or Russia;

4. The API claim there will be 119,000 total (direct, indirect, and induced) jobs is based on a flawed and poorly documented Perryman Group study commissioned by TransCanada that wrongly includes more than $1 billion in spending and 10,000+ person-years of employment for a part of the project in Kansas and Oklahoma that is not part of KXL and has already been built;

5. Even if the Perryman study were an accurate description of the jobs from KXL and they were filled immediately, U.S. unemployment would remain at the nine percent level;

6. By sending tar sands products now supplying Midwest refineries to Gulf Coast refineries, KXL could increase the price of gas and diesel fuel in the Midwest. Such additional costs, estimated at $2 billion to $4 billion, could suppress other spending and further cost jobs;

7. Tar sands petroleum product is higher in emissions than sweet crude and therefore causes more respiratory and other health harms and adds to climate instability;

8. Remaining dependent on the oil industry impedes the growth of renewables and a green economy that has generated 2.7 million U.S. jobs and is just beginning to grow.