Keystone XL Pipeline: Debunking Some Myths

The building of a 1,700-mile pipeline through the heartland of the United States has been at the center of the debate on the economy for many months now. Much has been written by those who both support and oppose its construction. And much has also been written about just how important the pipeline would be to the U.S. economy if it were actually to be built.

With the deadline for the Obama administration’s decision on construction coming up fast (2/21), many have already made up their minds. But have they done so on the basis of accurate figures?

It might be pretty difficult to do so, given that various estimates put the number of jobs created though the construction of the pipeline at anywhere between 20 and 350,000. So where have all these different estimates come from, and which one (if any) is actually accurate?

The first difficulty that arises from trying to find an accurate estimate is that most of the numbers from the upper echelons of the estimates come from the company who are hoping to build the pipeline: TransCanada.

TransCanada have suggested that construction would create 20,000 direct jobs (65 percent coming from construction and the remainder from manufacturing jobs associated with the project). In addition, they estimate that 118,000 spin-off jobs would also be created — including restaurant staff to feed those working on construction, hotel staff involved in housing people etc. 

The State Department, an instrumental body in the decision-making process, believes that the number of construction jobs created would be between 5000 and 6000 — a far lower figure than the 13,000 estimated by TransCanada. State Department research also suggests that almost all of these jobs would disappear once construction is completed.

A CNN report on the economic benefits of the pipeline says that “even according to TransCanada, the amount of permanent jobs created would be only in the hundreds.”

The way that TransCanada has estimated the economic benefits of the project is also somewhat suspect. According to the same CNN report, the company counts “each job on a yearly basis. If the pipeline employs 10,000 people working for two years, that's 20,000 jobs by the company's count.” Nowhere in their reporting does the company suggest that these 20,000 jobs would even be performed by the same people — if one position were filled by 1 worker for 6 months and another person for a further 6 months, TransCanada count that as 2 jobs that have been created.

One of the most pessimistic reports on the economic benefits of the pipeline comes from Cornell University. They estimate that the highest possible number of jobs created over the 2-year construction period would be 4650 — a figure taken from TransCanada’s own estimates. And these jobs would not exist after the pipeline was completed. In terms of permanent jobs, the study suggests that this number could be as low as 50.

Aside from jobs, it’s also important to note that the pipeline would be built not by an American company, but a Canadian one. Of course, they would be spending money that would end up in the U.S. economy, but much of the money that is made from the construction would not.

Some of the financial benefit of the pipeline, it has been claimed, would come from the production of the steel piping of the pipeline itself. However, the Cornell study suggests that only half of the steel used would be sourced from the United States. It appears, therefore, that it is TransCanada’s decisions costing US jobs, rather than being much to do with the Obama administration’s final decision.

All in all, what seems clear is that politicians and the public should not be placing all their hopes on the Keystone XL Pipeline to kick-start the economy. Such expectations will likely end in disappointment, finger-pointing and an ever more divided country.

The far greater debate, and one that has had just a fraction of the political coverage that the jobs argument has, is the environmental risk that pumping millions of gallons of toxic sludge through the United States causes. It will take a deep toll on the areas of Canada where the tar sands are being mined and increase the greenhouse gas footprint of these areas at a greater rate than conventional oil drilling would.

Let’s hope that in making his decision, President Obama is not swayed by the oil and petroleum lobbies claims, but listens to the reason of many scientists and hundreds of thousands (if not more) of concerned Americans who are standing against the building of the pipeline.

Jack Palmer is a communications assistant at Sojourners. Follow Jack on Twitter @JackPalmer88.