KEYSTONE XL PIPELINE US JOB ESTIMATES: “PIPEDREAM,” SAYS CORNELL UNIVERSITY STUDY

from Cornell University’s Global Labor Institute study                        In a departure from my usual approach, I won’t paraphrase any part of the report I’m covering, largely because unlike most scientific studies I’ve blogged about, this one is beautifully written and easily understood.

“INTRODUCTION:  The purpose of this briefing paper is to examine claims made by TransCanada Corporation and the American Petroleum Institute that, if constructed, TransCanada’s proposed Keystone XL (KXL) pipeline will generate enough employment to kick-start important sections of the US economy through the creation of tens of thousands—perhaps even hundreds of thousands—of good, well-paying jobs for American workers.

This briefing paper raises a number of questions regarding the jobs claims promoted by the industry, questions that are serious enough to generate a high level of skepticism regarding the value of KXL as an important source of American jobs.  With national unemployment levels presently (September 2011) around 9%, and the real unemployment figures considerably higher, jobs are desperately needed both to sustain families and to help the broader economy.  However, it is our assessment—based on the publicly available data—that the construction of KXL will create far fewer jobs in the US than its proponents have claimed and may actually destroy more jobs than it generates.

The results presented below should also cast doubt on the recent claim made by American Petroleum Institute that the oil industry could create more than a million jobs over the next decade—if the US government would open public lands, beaches, oceans, to unlimited oil drilling.  If the industry’s jobs estimates made in the context of KXL are any indication, then this broader claim should be scrutinized very carefully indeed.

MAIN FINDINGS:  The main points in this briefing paper can be summarized as follows:

The industry’s US jobs claims are linked to a $7,000,000,000 KXL project budget.  However, the budget for KXL that will have a bearing on US jobs figures is dramatically lower—only around $3,000,000,000 to $4,000,000,000.  A lower project budget means fewer jobs.

The project will create no more than 2,500-4,650 temporary direct construction jobs for two years, according to TransCanada’s own data supplied to the State Department.

The company’s claim that KXL will create 20,000 direct construction and manufacturing jobs in the US is not substantiated.

There is strong evidence to suggest that a large portion of the primary material input for KXL—steel pipe—will not even be produced in the United States.  A substantial amount of pipe has already been manufactured in advance of pipeline permit issuance.

The industry’s claim that KXL will create 119,000 total jobs (direct, indirect, and induced) is based on a flawed and poorly documented study commissioned by TransCanada (The Perryman Group study).  Perryman wrongly includes over $1,000,000,000 in spending and over 10,000 person-years of employment for a section of the Keystone project in Kansas and Oklahoma that is not part of KXL and has already been built.

KXL will not be a major source of US jobs, nor will it play any substantial role at all in putting Americans back to work.  Even if the Perryman figures were accurate, and all of the workers for the next phase of the project were hired immediately, the US seasonally adjusted unemployment rate would remain at 9.1%–exactly where it is now.

KXL will divert Tar Sands oil now supplying Midwest refineries, so it can be sold at higher prices to the

Gulf Coast and export markets.  As a result, consumers in the Midwest could be paying 10 to 20 cents more per gallon for gasoline and diesel fuel.  These additional costs (estimated to total $2,000,000,000 to $4,000,000,000) will suppress other spending and will therefore cost jobs.

Pipeline spills incur costs and therefore kill jobs.  Clean-up operations and permanent pipeline spill damage will divert public and private funds away from productive economic activity.  In 2010 US pipeline spills and explosions killed 22 people, released over 170,000 barrels of petroleum into the environment, and caused $1,000,000,000 worth of damage in the United States.

Rising carbon emissions and other pollutants from the heavy crude transported by Keystone XL will also incur increased health care costs.  Emissions also increase both the risk and costs of further climate instability.

By helping to lock in US dependence on fossil fuels, Keystone XL will impede progress toward green and sustainable economic renewal and will have a chilling effect on green investments and green jobs creation.  The green economy has already generated 2,700,000 jobs in the US and could generate many more.”

Coming up—oil industry’s claims that KXL is “ethical oil” and will get the US further on the road to energy independence

You can read the entire report and supporting data at http://www.ilr.cornell.edu/globallaborinstitute/research/upload/GLI_KeystoneXL_Reportpdf.pdf

 

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2 responses to “KEYSTONE XL PIPELINE US JOB ESTIMATES: “PIPEDREAM,” SAYS CORNELL UNIVERSITY STUDY

  1. Hi all,
    I have been looking for impartial, non-political information on the Keystone pipeline. Ienjoyed reading your blog.
    Ezra Levant(a.k.a. Canada freedom fighter) is a strong proponent of the pipeline project. He sees the oilsands as the means to eventually stop buying oil from OPEC countries. He coined the term “ethical oil”for the tarsands. He believes opponents of the XLpipeline are anti-west and Israel.

  2. Ves Gregory–

    Thank you for your comments. I’m not familiar w Levant, but it’s unfortunate he resorts to labeling those who disagree w him. I like H L Mencken’s approach, who sent out a form letter to those who disagreed w things he’d written: “Dear Sir or Madam: You may or may not be right.”

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