Keystone XL: Six Years And Still Waiting

Posted: Sep 02, 2014 1:48 PM

September 19th will mark the sixth anniversary of when TransCanada first applied for a presidential permit to build the Keystone XL Pipeline. Hurt the most are the people whose job it is to build and operate the pipeline.

The Keystone Pipeline or Keystone XL, as it’s commonly known, would put 9,000 laborers to work and support over 42,100 jobs on a project designed to strengthen America’s energy independence as well as provide a way to move Bakken Shale oil from North Dakota to refineries located on the Gulf Coast.

There are those who would dismiss the bulk of these jobs as temporary but, as one pipeline construction worker very articulately put it at a recent hearing on another pipeline project, “I would also like to note that much has been brought up about the temporary jobs...for 28 years, every job I have had has been a temporary job.” Exactly.

The benefits to labor, though, are significantly greater than the just the pipeline connected jobs. There is also the overall economic activity Keystone XL will generate. The State Department’s socio-economic analysis neatly summarizes the results of a study by the Perryman Group showing the project is likely to generate 118,935 per-years of employment related to the impact of construction and development on US business activity.

The same study indicates the ongoing annual gains in US business activity stemming from the permanent increase in stable oil supplies associated with it will produce 250,348 person years of employment at normal oil prices and as much 553,235 person years of employment at high oil prices. That’s a lot of labor, whether we’re talking temporary or permanent jobs and there are a lot of unemployed construction and other workers who have been waiting six long years for a piece of it.

Instead, we see delay after delay. Executive Order 13337 sets forth a procedure for acting on such applications, providing for comments by agencies within 90 days, permitting within 15 days after determinations and so on, but all that has become meaningless with indecision ad infinitum. The delays, moreover, are arbitrary as the State Department makes clear by indicating it closed public comment almost six months ago. Yet, here we are still waiting, still delayed.

The costs of delays in the project are being borne by those laborers. Again, the Perryman Group report quoted by the State Department indicates construction and development would yield $9.6 billion in increased gross national product and $6.5 billion in added personal income or roughly $55,000 per person year of employment. That’s meaningful in rural states the Keystone XL will traverse, where per capita incomes are less than half that. Even the median household income in Montana is a full $10,000 below what Keystone related employment will deliver.

It’s time for President Obama to approve Keystone XL, which the U.S. State Department has already indirectly told us is necessary. Yes, the Environment Impact Statement considered alternatives, and it found, unsurprisingly, that neither an aboveground pipeline nor a smaller-diameter pipe were reasonable alternatives “because they would not meet the proposed project purpose and need and/or because of safety and security reasons.”

It also ruled out renewable energy sources and energy conservation as alternatives because “the crude oil would be used largely for transportation fuels and, therefore, any alternatives to the crude oil would need to fulfill the same purpose. The analysis found that even with renewable energy and conservation, there would still be a demand for oil sands-derived crude oil.” One can conclude from those evaluations that “no action” is also unreasonable. The only other alternatives involved some routing changes that, in the end, are of no consequence to whether the Keystone XL is necessary or not. Yet, that is where opponents have focused the debate, of course.

This why we should get on with it. Delays over the appropriateness of encouraging oil and gas development that Canada already regulates or environmental impacts that can be easily mitigated are all now, after all this study and delay, irrelevant to the only question that matters; whether it’s in the national interest. If you still need an answer, just ask those waiting for their next job. The answer is yes.