The People of America's Oil and Natural Gas Indusry

Keystone xl Pipeline Its About The Jobs The Economy And Security

Mark Green

Mark Green
Posted March 29, 2013

Before digging into some new misinformation about the job and economic impacts of the Keystone XL pipeline, let’s underscore a figure: 58 percent. That’s the share of likely U.S. voters who favor building the full Keystone XL, according to a new Rasmussen Reports poll this week.

In public opinion terms, 58 percent is a slam dunk, a grand slam. Rasmussen says those who strongly favor the Keystone XL outnumber the strongly opposed by nearly three to one. Rasmussen’s finding is consistent with other Keystone XL surveys (Harris Interactive, Fox News, Pew Research). Americans want the full project built.

And they want it built despite more than four years of delay, despite often hysterical opposition from the 10 to 15 percent who’re adamantly against this project – and other pipelines, Canadian oil sands crude, refineries and most likely any fuel source or infrastructure that could provide Americans with reliable, affordable energy. They want it built for simple but important reasons: jobs, economic stimulus and energy security.

Some keep trying to dismiss the jobs and economic lift construction of the full Keystone XL could provide. The folks at Think Progress have a post this week decrying misinformation in the Keystone XL debate but then dispense a good deal of their own rhetorical chaff. Starting with jobs:

“The most recent State Department assessment, written by contractors hired by the pipeline developer, found that constructing the pipeline would create 3,900 temporary jobs, but just 35 permanent jobs.”

Here’s what the U.S. State Department said in its latest Keystone XL review:

“Including direct, indirect, and induced effects, the proposed Project would potentially support approximately 42,100 average annual jobs across the United States over a 1-to 2-year construction period …”

State goes on to describe economic benefits that construction of the full pipeline could generate:

“This employment would potentially translate to approximately $2.05 billion in earnings. Direct expenditures such as construction and materials costs (including construction camps) would total approximately $3.3 billion. Short-term revenues from sources such as sales and use taxes would total approximately $65 million in states that levy such a tax.”

And there’s more:

“Yields from fuel and other taxes could not be calculated, but would provide some additional economic benefit to host counties and states. The proposed Project area does not have sufficient temporary housing for the anticipated construction workforce. Keystone proposes to meet the housing need through a combination of local housing and eight construction camps. Property taxes on these camps would potentially generate the equivalent of one full year of property tax revenue for seven host counties, totaling approximately $2 million.”

These are the benefits that accrue when a construction project of this magnitude gets off the drawing board. This would be real-world growth, for which real-world people – including the skilled men and women of the U.S. construction trades, suffering 16 percent unemployment – have been waiting for more than four years. Sean McGarvey, president of the AFL-CIO’s Building and Construction Trade Department, from earlier this year:

“For the skilled craft professionals that I am privileged to represent, the past four years have not been a recession, they have been a depression. … This has been the most scrutinized infrastructure project, perhaps, in our nation’s history. And at every juncture, concerns about safety and the environment have been met and satisfied. It is now time to build the Keystone XL pipeline and put thousands of Americans back to work.”

As for jobs involved in the operation of the pipeline, let’s not miss the point that a project of this size can stimulate the economy beyond itself. According to the Canadian Energy Research Institute, 117,000 new U.S. jobs linked to oil sands development because of the Keystone XL would be created by 2035.

There are other economic benefits, such as trade. The fully completed Keystone XL would change the way Gulf Coast refiners get their oil, and the change is big.

Last year the U.S. imported 331,697,000 barrels of oil worth more than $33 billion from Venezuela. The State Department says oil delivered by the Keystone XL – and remember, 25 percent of the pipeline’s pickup would be U.S. oil from the Bakken region in North Dakota – would likely displace Venezuelan oil. The Keystone XL has contracts in place to ship 555,000 barrels a day from Canada, or more than 202 million barrels a year.

Here’s why it matters whether we get that oil from Canada instead of Venezuela. According to the Census Bureau, in 2012 for every $1 in goods we bought from Venezuela, Venezuela purchased 46 cents worth of goods from us. Yet, in trade with Canada, for every $1 in good we bought from our northern neighbor, they bought 90 cents worth of goods from us – a 44-cent difference.  Figure it out: The potential trade differential from buying slightly more than 202 million barrels of oil from Canada instead of Venezuela is about $9 billion a year in potential U.S. exports. The Commerce Department translates those exports into an additional 48,297 U.S. jobs per year – from buying that amount of crude oil from Canada instead of Venezuela.

Think Progress also takes another shot at the Keystone XL’s economic benefits, saying there’s no guarantee oil delivered by the pipeline will stay in the U.S. after it’s refined into gasoline, diesel and other products. The State Department says that’s unlikely. Even if State is mistaken, the export of finished, more valuable products is a win for the United States. More on that another day.

As for energy security and the Keystone XL, a new Chicago Tribune editorial says it pretty well:

“The U.S. has made great strides toward energy independence, thanks to conservation efforts and an incredible boom in exploration for domestic oil and natural gas. A recent report from Citigroup projected the U.S. could become North American energy independent by 2020. That is, this nation could get all of its energy from the U.S. and Canada. … But those projections depend on the U.S. making the right decisions about supply and consumption. One of those decisions is approval of the Keystone pipeline.”

The benefits of the Keystone XL are clear. They were clear in 2011, they were clear in 2010. They have been clear for more than four years. The facts have been discussed, parsed, researched, studied, reviewed, appraised, examined, reexamined, reviewed and scrutinized. It’s time to approve the full Keystone XL pipeline.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.