KEYSTONE XL (KXL) PIPELINE: STEEL NOT MANUFACTURED IN US

Russia

India

South Korea

I’ve copied & pasted these pages from the Cornell report—it’s difficult to compress the information without losing sight of the whole picture.  I chose to copy & paste also because I’m able to include footnotes (in italics) that back up Cornell’s statements.

Below is the report’s table of contents listing the page numbers of other topics you may want to read about.    Go to http://www.ilr.cornell.edu/globallaborinstitute/research/Keystonexl.html

 Pipe Dreams?

Jobs Gained, Jobs Lost By The Construction Of Keystone XL

A Report By Cornell University Global Labor Institute

 Table Of Contents

1         Introduction

2         Main Findings

4         Transcanada Will Spend $3 To $4 Billion In The US, Not $7 Billion As Claimed

7         KXL Will Generate 2,500-4,650 Construction Jobs

8         Most Jobs Created Will Be Temporary And Non-Local

11         KXL Steel Manufactured Outside The United States

15         Construction Services: Engineering/ Design/Technical/Support

17         Perryman Study Deeply Flawed And Provides No Sound Basis For Jobs Claims

22         Total (Direct, Indirect, And Induced) Jobs From Keystone XL

27         KXL Will Have Minor Impact On Unemployment Levels

28         Four Ways Keystone XL Could Be A Job Killer

35         Conclusion: Employment Potential From KXL Is Little To None; Decision Should Be Based On Other Factors

 Technical assistance provided by Ian Goodman and Brigid Rowan, The Goodman Group, Ltd. http://www.thegoodman.com

Case #: HP09-001, August 24, 2009. http://www.puc.sd.gov/commission/dockets/ hydrocarbonpipeline/2009/hp09-001/091809aff.pdf

Cornell University GlobaL Labor institute         Pipe Dreams? Jobs Gained, Jobs Lost by the Construction of Keystone XL         9

© US department of State

KXL Steel Manufactured outside the United States

TransCanada claims that “the $7 billion KXL pipeline project is expected to directly create more than 20,000 high-wage manufacturing jobs and construction jobs in 2011- 2012 across the US, stimulating significant additional economic activity.”20 This claim is misleading and erroneous on a number of levels.

 First, as discussed above, the budget for KXL US that relates to incremental US employment is $3 to $4 billion and not the $7 billion claimed by the proponents. Second, TransCanada and other KXL proponents are giving the impression that KXL will create a high number of manufacturing jobs. This is simply not true. The main manufacturing activity related to pipeline construction is the manufacture of the steel pipe. The 36-inch steel pipe is the largest single materials input for KXL. This is literally the pipe in the pipeline. In general, pipeline construction is not a manufacturing-intensive activity even if the steel itself is also being manufactured onshore.

 This section will present strong evidence that:

(a) almost half (and perhaps more) of the primary material input for KXL—steel pipe—will not even be produced in the United States;

(b) based on the experience of Phases 1 and 2, the final processing work for KXL will probably be performed in the US with most of the steel and pipe sourced from outside of the US (notably India and South Korea).21

In making a case for the thousands of manufacturing jobs offered by KXL, TransCanada provides the assurances that “approximately 75% of the pipe for the US portion of the proposed Project would be purchased from North American pipe manufacturing facilities and that regardless of the country of origin, it would purchase pipe only from qualified pipe suppliers and trading houses.”22 However, there is strong evidence to suggest that almost half of the primary material input for KXL—steel pipe—will not even be produced in the United States. 

20         TransCanada’s website (viewed Sept. 19, 2011). http://www.transcanada.com/economic_benefits.html

21         Beyond the evidence discussed below regarding the off-shoring of the steel pipe manufacturing, we note that the Perryman study does not substantiate the claim that KXL will result in a high level of manufacturing jobs. This finding is consistent with other recent studies of employment impacts associated with major pipeline projects. The Perryman study estimates large employment impacts for KXL construction, but only a small portion of these added jobs are in manufacturing industries. Perryman Group, The Impact of Developing the Keystone XL Pipeline Project on Business Activity in the US, June 2010, pp. 44-51. http://www.transcanada.com/economic_benefits.html. A study projected that 4,000 manufacturing jobs will be created in Canada for a similar-sized pipeline construction project (the proposed Northern Gateway Project), assuming the steel is made in Canada. Enbridge Northern Gateway Project (Volume 6C: Environmental and Socio-Economic Assessment (ES)-Human Environment, Section 4: Socio Economic Condition, pp.4-7, 4-12 to 4- 19. https://www.neb.gc.ca/ll-eng/livelink.exe/fetch/2000/90464/90552/384192/620327/624798/620129/ B3-16_-_Vol_6C_–_Gateway_Application_–_Human_Environment_ESA_(Part_1_of_3)_-_A1T0G6_. pdf?nodeid=620083&vernum=0

22         FEIS, op.cit. Volume 1, Project Description, Page 2-26. http://www.keystonepipeline-xl.state.gov/clientsite/ keystonexl.nsf?Open

CorneLL university GLobaL Labor institute         Pipe dreams? Jobs Gained, Jobs Lost by the ConstruCtion of Keystone XL         11

KXL will require over 800,000 tons of carbon steel pipe. TransCanada has contracted with an Indian multi-national company, the Mumbai-based Welspun Corp Limited, and a Russian company, Evraz, to manufacture steel pipe for KXL.  In fact, a significant portion of the $1.7 billion already invested in KXL by TransCanada has likely been used towards the manufacture and import of the pipe. Clearly, this is an investment that is for the most part generating economic activity and job creation outside of the US. TransCanada’s claims that US manufacturing would reap considerable benefits from the project need to be viewed in the light of these data.

 

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2 responses to “KEYSTONE XL (KXL) PIPELINE: STEEL NOT MANUFACTURED IN US

  1. So basically all the same arguments made against President Obama’s “shovel-ready” stimulus…that supporters over-estimate/lie about the number of jobs that are created, that constructions obs created are temporary, that American-made goods wouldn’t really be used (thus fewer spin off jobs) and that it will have minimum impact on unemployment. I guess the pro-oil Republicans learned the lesson well.

  2. William–Were it not so, but yes, they can be a quick study. Their over-arching, goal, though, is what seems to guide their responses: to make Obama a one-tern president.

    And they may succeed, because too many of us are willing to accept a thing as true simply b/c we’ve heard it over & over instead of questioning veracity & motive, as you have.

    Thanks for your comment. I look forward to more from you.

    Carole

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