The Keystone XL Pipeline: Facts and Fairytales

It is surprising how many articles out there do not really give all the facts surrounding the Keystone XL Pipeline. It is also surprising how many politicians on the debate circuit outright lie about it. Time to put the fantasy aside. Fairy tales are fine just so long as you don’t start believing in them.

TransCanada is the major North American energy company responsible for the current firestorm of controversy over oil. The Keystone Pipeline System, built by TransCanada, is composed of several sections; the Keystone Pipeline (Phase 1) and the Keystone-Cushing Extension (Phase 2) are already in place and operational. The Keystone XL would be two new and separate segments attaching to the two existing sections.

TransCanada wants to build this pipeline through the center of America rather than to its west coast simply because it is easier for them. Although the distance to its west coast is shorter, that route is plagued with a multitude of problems as it would cross Indian land. But since the Keystone XL Pipeline will directly affect a fairly large portion of the U.S., it is equally important for this country to separate the facts from the fairy tales before the project continues.

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The Keystone XL will bring a $7 billion dollar project to the U.S.

FAIRY TALE $7 billion dollars may be the budget number for this project but only a portion of this figure will ever reach the U.S. Part of this budget has already been spent on the first two phases of the project and on Canada’s side of the border. Only $3 to $4 billion will reach the U.S. Not a paltry sum but not the figure TransCanada and politicians would like you to believe.^1,2

The Keystone XL will create tens if not hundreds of thousands of jobs.

FAIRY TALE According to the State Department, the Keystone XL will create approximately 2,500 to 4,650 temporary jobs during construction. This data comes directly from TransCanada itself. Additional data, also from TransCanada, states that there will only be “hundreds” of permanent jobs produced, not thousands.¹

In terms of spin-off jobs (employment created around the construction of the pipeline such as truck drivers, etc.) figures as high as 500,000 have been tossed around. These incorrect and highly inflated numbers are believed to have come from a report paid for by TransCanada that stated that the pipeline would create over 119,000 “person-years” of work. A person-year is the amount of work that would keep a person employed for one year – which does not translate into 119,000 “jobs”.^1,2

The Keystone Pipeline will actually raise the cost of gas for people in the Midwest.

FACT Oil that is currently being held in Midwest refineries will be diverted by the pipeline to be sold for a higher profit overseas. The reduction in supply will increase the cost of gasoline 10 to 20 cents in this region, 15 states to be exact.¹

The steel pipes needed for the Keystone XL project will be produced in the United States. This production is an example of spin-off jobs created by the pipeline.

FAIRY TALE Based upon the construction of the previous phases of the pipeline by TransCanada, it is very likely that half if not more of the steel pipes to be used in the Keystone XL will be imported from India, South Korea and Canada.¹

The Keystone Pipeline will give our country the energy security we need.

FAIRY TALE This is about Canada wanting to get its oil reserves to foreign markets not about selling it to America. That’s just the spin the politicians are trying to sell.

According to the New York Times article, “Say No to the Keystone XL”,

“What pipeline advocates . . . fail to mention is that much of the tar sands oil that would be refined on the Gulf Coast is destined for export. Six companies have already contracted for three-quarters of the oil. Five are foreign, and the business model of the one American company – Valero – is geared toward export.” ^2,3

Essentially, we would be allowing Canada to cross our country with a potentially dangerous pipeline primarily for their benefit. Furthermore, none of these companies, including Valero, will pay U.S. taxes on their profits.

The public needs to be reminded that while the U.S. is still the largest importer of crude oil, in 2011 the U.S. became a net exporter of fuel for the first time in almost 60 years. This means that the oil companies will make a killing by selling fuel to foreign countries whose prices are much higher than ours, precisely the reason the U.S. will never see most of the oil produced from Canadian tar sands.⁴

The Keystone Pipeline will kill more jobs than it will create.

FACT A study completed by the Cornell University Global Labor Institute, the only independent study done on this project, determined that the Keystone XL will not only create less jobs than TransCanada claims, but also actually destroy jobs for the following reasons:

• A rise in fuel prices in the Midwest will cancel the positive effect of the few jobs actually created by the pipeline. This increase in prices will affect families and the agriculture and transportation industries. So much for the trickle down theory being beneficial.¹
• The oil spills that will invariably happen may create some temporary clean up jobs but they will be outweighed by the direct loss of many more existing permanent ones. It is estimated that job losses from the BP oil spill range from the tens of thousands to possibly one million over the next five years.¹
• The diversion of moneys into this project will prevent that investment from going into forwarding the green economy. Long term, the move to more environmentally sustainable energies will create tens if not hundreds of thousands of new jobs.¹

There are already numerous pipelines crisscrossing America, one more isn’t going to hurt. The Keystone Pipeline System is a safe method of transporting oil.

FAIRY TALE This is according to TransCanada. The reality is a little different:

• The Phase 1 portion of the Keystone Pipeline System was touted by TransCanada as meeting or exceeding “world-class safety and environmental standards” and projected to have less than 2 spills in a decade. 14 leaks occurred in the United States within its first year of operation, at one point causing it to be shut down. While a majority of the leaks were small, one of those leaks in North Dakota was a 60-foot geyser. A leaking oil pipeline is bad for the environment wherever it is located but the Keystone XL is set to traverse the the world’s largest fresh water aquifer, the Ogallala Aquifer, that supplies 30% of the groundwater used for irrigation and 82% of the drinking water to the people living within its boundaries. Since there are places where this aquifer runs fairly close to the surface, even the potential for leaks is not acceptable.¹
• As at least half of the steel pipe produced for the project will come from foreign countries, there will be no oversight of the quality of its production. One of the companies from which these pipes will be purchased has a track record of producing substandard products. The reason for the aforementioned 14 spills was poor quality piping from this particular company.¹
• The oil being transported through this system is not your typical unprocessed crude oil. It is a heavy, tar-like sludge called “bitumen”. For it to be moved through the pipelines it must be diluted and forced through under high pressure. To do this, TransCanada is diluting the bitumen with secret chemicals that make it highly corrosive on the pipelines and extremely dangerous and toxic for a cleanup crew to deal with when a spill does occur.⁵

All the necessary environmental studies regarding the Keystone XL pipeline have been completed. What is the hold up?

FAIRY TALE The initial environmental studies were completed by State Department staffers eager to rubber stamp the project and push it through without conducting thorough reviews. They may have accomplished this had the BP oil spill and then the leaks in Keystone Pipeline (Phase 1) not occurred. Once these failures happened, the Keystone XL became the center of a storm of controversy. Under this scrutiny, it was revealed that the studies should be deemed inadmissible for numerous reasons: inexperienced and unqualified staffers were held responsible for gathering data, study requirements did not include the environmental scope necessary and one staff member had questionable ties to TransCanada itself.⁶

It is in the nation’s best interest to approve the Keystone XL pipeline.

FAIRY TALE However, the Keystone XL is very much in the best interest of the politicians supporting it. John Boehner, Speaker of the House, has not only received campaign funds from the six oil companies and one electric company directly involved with the Keystone XL but also began investing in them in 2010 as the project began ramping up. And he is not the only politician in this position.⁷

Oil extraction from tar sands is a more expensive and destructive process than the standard process used to obtain regular crude oil.

FACT The process of producing fuel from tar sands was once considered too expensive as it requires the extraction of oil from the sand in which it was created versus typical drilling methods. This extraction destroys vast amounts of untouched wilderness and requires enormous amounts of energy and water. The byproducts are massive strip mines and huge toxic tailings ponds.

Although the actual mining for the oil that will eventually travel through the Keystone XL is not occurring on the U.S. side of the border, it does not excuse this country from participating in the environmentally devastating process that we do not see on the Canadian side. It is difficult to put into words the utter devastation this type of oil extraction reaps on our natural world. Garth Lenz is a photographer who has visited the Athabasca oil sands of Alberta:

“I had photographed industrial devastation all over, including some of the most massive clear-cuts on the planet, right in British Columbia and in Chile and Patagonia, so I’d seen that massive industrialization of the landscape on a huge, huge scale. But I was completely unprepared for what I found. Because this is just completely off-the-grid crazy—the scale is unbelievable.” ⁸

The direct benefits of this project will be felt by a few workers, politicians and the oil companies and when stacked against the incredible drawbacks, it’s just not worth it.

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References:

1. Skinner, Ph.D., Lara, Sean Sweeney, Ph.D., “Pipe Dreams? Jobs Gained, Jobs Lost by the Construction of Keystone XL.” Cornell University Global Labor Institute. Sept. 2011 (Updated Jan. 2012). Jan. 2012. <http://www.ilr.cornell.edu/globallaborinstitute/research/Keystonexl.html>.

2. Zeller Jr., Tom. “Keystone XL Oil Pipleline: A Symbolic Struggle Steeped in Fuzzy Math.” Huffington Post. 4 Nov. 2011. Jan. 2012. <http://www.huffingtonpost.com/2011/11/04/keystone-xl-oil-pipeline-_n_1073840.html?page=1>.

3. “Say No to the Keystone XL.” New York Times on the Web. 2 Oct. 2011. Jan. 2012. <http://www.nytimes.com/2011/10/03/opinion/say-no-to-the-keystone-xl.html?_r=1>.

4. Zeiler, David. “Oil Companies Big Winners as U.S. Becomes Net Exporter of Fuel.” Money Morning. 4 Jan. 2012. Jan. 2012. <http://moneymorning.com/2012/01/04/oil-companies-big-winners-as-u-s-becomes-net-exporter-of-fuel/>.

5. Symons, Jeremy. “Tar Sands Oil: New Pipeline Routes, Same Dangers.” Huffington Post. 18 Nov. 2011. Jan. 2012. <http://www.huffingtonpost.com/jeremy-symons/keystone-tar-sands_b_1101294.html>.

6. Hersh, Joshua. “Keystone XL: Haste and Inexperience Hampered State Department’s Environmental Review.” Huffington Post. 3 Nov. 2011. Jan. 2012. <http://www.huffingtonpost.com/2011/11/03/keystone-xl-haste-and-ine_n_1074010.html?1320349197>.

7. “The Speaker's Pipe Dreams: Big Oil Investments Muddy Boehner's Message On Keystone XL.” Political Correction. 18 Jan. 2012. Jan. 2012. <http://politicalcorrection.org/factcheck/201201180004>.

8. “Athabasca Oil Sands in All Their Terrible Glory.” Indian Country Today media Network.com. 23 Sept. 2011. Jan. 2012. <http://indiancountrytodaymedianetwork.com/photogallery/athabasca-oil-sands-in-all-their-terrible-glory>.

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