Keystone XL’s Ample Rewards: Jobs, Energy, Prosperity

Mark Green
Posted April 12, 2013

To hear the other side, you’d think the Keystone XL pipeline project would be nearly 1,200 miles of all pain, no gain for the United States. No rewards? The U.S. State Department has reviewed the Keystone XL four times now and finds rewards aplenty. While Keystone XL opponents don’t like State’s fourth favorable analysis any more than they liked the previous three, they should pay attention nonetheless. Let’s go down the list:

Jobs: Opponents minimize the number and duration of Keystone XL-associated jobs. State says:

“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 …

Economy: Opponents dismiss the boost the Keystone XL would give the U.S. economy. State says:

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 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.

Exports: Opponents claim the Keystone XL pipeline will move crude oil for export. State says:

Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in an outlook where the refiners have significant incentive to obtain heavy crude from the oil sands. Both the EIA’s 2013 AEO and the Hart Heavy Oil Outlook (Hart 2012b) indicate that this demand for heavy crude in the Gulf Coast refineries is likely to persist throughout their outlook periods (2040 and 2035 respectively). The EnSys 2010 analysis …  projected that, by 2030, U.S. Gulf Coast (PADD 3) refineries could economically absorb and process 1.5 to 2 million bpd of [Western Canadian Sedimentary Basin]  crudes (predominantly heavy/oil sands streams); less if a large amount of pipeline capacity were built to the British Columbia coast, opening up markets in Asia. Thus Gulf Coast refineries have the potential to absorb volumes of WCSB crude that go well beyond those that would be delivered via the proposed Project. On this basis, the likelihood that WCSB crudes will be exported in volume from the Gulf Coast is considered low.

Environment: Opponents say the Keystone XL would be too risky. State disagrees – again, as it has in each of the previous three reviews. From the latest:

The analyses of potential impacts associated with construction and normal operation of the proposed Project suggest that there would be no significant impacts to most resources along the proposed Project route …

OK, so let’s let others talk about the Keystone XL’s rewards.

Keith Stelter, president and co-owner of Delta Industrial Valves in Niles, Mich., at a House Energy and Power Subcommittee hearing on Wednesday:

“Our valves are used extensively in the facilities on both ends of the pipelines. So the completion of the Keystone XL pipeline is very important to us and many, many other American companies. … I speak not only for myself and my company, but also for thousands and thousands of other U.S. companies, along with millions of Americans who struggle with the double edged sword of disappearing manufacturing jobs and ever higher oil prices.”

Sean McGarvey, president of the AFL-CIO’s Building and Construction Trades Department, speaking at a Keystone XL rally last week in Iowa:

“As you lose an argument you come up with another one. … The one now is these are temporary jobs. These jobs building this pipeline are temporary jobs. Well, Mount Rushmore was a temporary job. The Hoover Dam was a temporary job. The Interstate system in the United States was a temporary job. Anybody that knows anything about construction knows that every construction project is temporary, and we move from one project to the next. … All those temporary jobs linked together keeps the construction industry worker in the middle class, and that’s what this is all about.”

Rick Terven, United Association executive vice president, talking at the same rally about his union’s program to put returning military veterans to work:

“The United Association, without one tax dollar, helps these young people get training, and then they work with the owners like TransCanada to be able to place them in a job so that way them and their families can have a job with good benefits and good wages … and enjoy the American dream like all of us.”

Again from Iowa, Pete Haeshley, Veterans in Piping, Plumbers and Pipefitters Local 562:

“Everybody out here knows the right thing to do. And that’s all we’re trying to do here is get Americans to have American jobs.”

Other events in support of the Keystone XL were held this week in Tulsa and Chicago.

TransCanada is ready to get on with building the Keystone XL pipeline, a $7 billion, privately funded, shovel-ready project. The project will deploy state-of-the art pipeline technology, with TransCanada agreeing to adopt 57 special conditions above and beyond existing pipeline standards for the Keystone XL’s construction, operation and maintenance. 

The workers are ready to build it. Communities are ready for the economic benefits associated with an infrastructure project of this magnitude. The U.S. is ready to be more energy secure through a stronger partnership with our No. 1 source of imported crude oil, Canada. Significantly, the American people are ready, as they've said in poll after poll.  As House Energy and Commerce Committee Chairman Fred Upton said Wednesday, “After four years, what are we waiting for?”

API President and CEO Jack Gerard:

No human endeavor is completely risk-free. Throughout our history Americans have assessed risks associated with modern progress and moved ahead – carefully, employing the best available technologies to minimize those risks. Energy is an example of such progress. Development of our oil and natural gas resources has meant mobility for millions of Americans, literally and socially. These energies have helped drive our modern economy while producing wealth broadly across our society. America’s oil and natural gas companies are committed to safely and responsibly bringing this energy to Americans. And we will.