The President's Fuzzy Keystone XL Jobs Math

Mark Green
Posted August 8, 2013

President Obama spent some of his time with Jay Leno on Tuesday night talking about infrastructure jobs and creating opportunity for U.S. workers:

“Middle-class families are still struggling to make sure they can pay for their kids’ college education, they’re still concerned about whether they can retire, and what Washington should be thinking about every single day is how do we make sure we’ve got an economy where, if folks work hard, they find a good job that pays a decent wage, they can send their kids to college, they’ve got health care they can count on, they’re retiring even if they don’t get rich, and we’re creating these ladders of opportunities for people to get into the middle class.”

The president added that infrastructure is an issue that historically has enjoyed bipartisan appeal, and that American workers are poised to take on big projects:

“Republicans and Democrats, they love cutting those ribbons. And, we’ve got a bunch of construction workers who aren’t working right now, they’ve got the skills, they want to get on the job.”

The president is right to pound the bully pulpit on jobs and the boosting power attributable to well-paying employment. He’s right about finding opportunities to put American workers to work on big things.

But he’s wrong every time he fails to connect these important goals with the Keystone XL pipeline project – as he did in last week’s New York Times interview, in which he apparently dismissed his own State Department’s estimate that the pipeline could create more than 42,000 average annual U.S. jobs over a one- or two-year construction period, while generating billions in employment earnings and direct spending on construction and materials.

Unfortunately, the president may be hanging up on a favorite talking point of the small minority Americans opposed to the project – about 13 percent in the most recent Harris Interactive survey – who criticize the Keystone XL’s construction jobs as temporary. Let’s see what U.S. construction workers think about that. Here’s Sean McGarvey, president of the Building and Construction Trades Department of the AFL-CIO, from earlier this summer:

“The interstate highway system was a temporary job; Mount Rushmore was a temporary job. If they knew anything about the construction industry they’d understand that we work ourselves out of jobs and we go from job to job to job.” 

With all due respect, the president can’t have it both ways with U.S. construction workers. He can’t claim to be leading the charge to find jobs for them – and be dismissive of the construction jobs the full Keystone XL pipeline project could generate. Meanwhile, just as it is bad policy to pick winners and losers in the energy mix, it’s a flawed approach for the president to pick and choose which construction jobs meet his policy goals.  

Meanwhile, a number of credible observers have thrown yellow flags on the president’s Keystone XL jobs math.

Glenn Kessler, Washington Post Fact Checker:

“Ordinarily, we would expect the president to cite an estimate from his own State Department, rather than a think tank opposed to the project. … Of course, perhaps the president just took State Department estimate of the construction jobs and divided it in half, to come up with an (incorrect) yearly figure. But that doesn’t make much sense either, because the White House routinely claimed the job gains created by the stimulus by adding up the number of “person-years” — in other words, one person employed per year. That’s how the White House could claim 3 million jobs were saved or created by the stimulus through 2012. … No one really knows exactly how many jobs will be created. So maybe the president is right to be skeptical. But the president shouldn’t pick and choose how he cites job-creation numbers.

Energy blogger Geoff Styles picks up on the same point as Kessler:

“This is the White House that devised a new metric of “jobs created or saved” for assessing the impact of its 2009 stimulus measures. It has also routinely touted projects with “green jobs” potential, not just in terms of their direct employment gains, but also their indirect job creation estimated via generous multiplier effects. Either indirect jobs are always relevant, in which case KXL would create far more jobs across the economy than the President seems willing to admit, or they also aren’t relevant to justifying clean energy and other, more favored infrastructure projects. In any case, his reported ”chuckles” at 50-100 new permanent jobs struck me as unseemly for a President still contending with unemployment over 7.5 percent in the fifth year of this recovery.

PolitiFact.com (Tampa Bay Times):

Obama said the Keystone XL pipeline might produce about 2,000 jobs during construction, based on the most reliable estimates. The White House provided no supporting evidence and the administration’s own State Department predicted that while the pipeline would produce few permanent jobs, the construction process itself would create nearly twice as many jobs as the president said. We rate the statement False.

Associated Press:

The president correctly characterized the project's overall effect on U.S. employment but underestimated the number of jobs it would create…. Nor do the figures include the peripheral jobs that would be created as a result of a major infrastructure project.

The point here is the need for honest discussion. Again, the president is right to see the nation’s big infrastructure challenges as catalysts for a stronger economic recovery and the kind of job opportunities that can transform the lives of so many Americans.

The Keystone XL pipeline is the biggest shovel-ready project around – and better than others because it is privately financed and not dependent on an act of Congress or finding offsets in the federal budget. The Keystone XL can put tens of thousands of Americans to work – if the president will simply give the go-ahead. Canadian Prime Minister Stephen Harper:

“That is that first of all our No. 1 priority in Canada is the creation of jobs, and clearly this is a project that will create jobs on both sides of the border. And it is in our judgment an important project, not just for our economy and for job creation but for the long-term energy security of North America."

It’s about jobs and greater energy security for our country. The debate is nearly five years old now, and the reasons for delay ran out of steam long ago – from perfecting the pipeline’s route through sensitive parts of Nebraska to climate change. On emissions, the State Department’s most recent analysis said there would be “no substantive change in global (greenhouse gas) emissions” from oil sands development associated with the pipeline, confirmed in a new IHS CERA study.

So get on with building the full Keystone XL pipeline – for the jobs, for the energy, for a strengthened partnership with Canada, our No. 1 source of imported oil. API President and CEO Jack Gerard:

The American people understand all this. … Support is strong across all political identifications; majorities of Democrats, Republicans and Independents, along with leaders from Bill Clinton to George W. Bush to Warren Buffett, agree Keystone XL is in our national interest. That’s the only thing the State Department and President Obama are left to determine: whether the jobs, economic growth, revenue generation, trade relationship with our top ally, energy security and national security benefits certain to be produced by Keystone XL are good for America. We have an unprecedented opportunity -- and responsibility – to take control of our energy future. Achieving greater energy security requires leadership and smart policy decisions. It requires approving the Keystone XL pipeline.