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Debunking Keystone XL Myths

April 09, 2014
The Keystone debate is still incredibly polarized.  Myriad conflicting studies, and politically charged bodies, are creating clouded opinions for both U.S. members of Congress and U.S. citizens.  The research on the precise economic and environmental impact of the pipeline is still forthcoming.  But, in the end, the facts may be more exaggerated at both ends of the spectrum

By Alexander Gray, W’17 C’17


Source: 
http://blogs.ei.columbia.edu/2011/10/10/what-are-the-keystonexl-pipeline-risks-to-water-resources/

The Keystone XL pipeline has dominated the energy policy debate in Washington for the past several years of President Obama’s two terms.  While both sides of the political aisle have demonstrated strong support and opposition,  the general public appears to be in favor of the project—which is slated to be owned and operated by TransCanada.  According to a 2014 Washington Post poll, 65% of U.S. citizens support construction of the pipeline, while only 22% oppose it.  Another 85% of the people surveyed believe the pipeline will create a significant number of jobs, while only 47% believe it poses a significant threat to the environment—a primary concern of President Obama and his Democrat colleagues who are hesitant about moving forward with the project.1

As a supporter of both greater North American energy independence, and job creation in the United States, the Keystone pipeline makes perfect sense to me.  On the surface, its economic benefits seem to outweigh the potential environmental concerns.  But, is Keystone really the best solution for combating our economic woes and reliance on oil from the Middle East?  And, is the environmental impact really so marginal that we can afford to implement greater ease in burning gas in our existing age of hyper-industrialism?  These are the questions I endeavored to answer in my recent quest to gain a greater understanding of the proposed Keystone XL project.

In a world of 24/7 cable news, and polarized politics, it is easy to get lost in the rhetoric of the Keystone XL debate.  Many Democrats claim that it is harmful for the environment.  Most Republicans try to spin the positive economic benefits of the project. Both sides, however, fail to cite specific figures or studies to substantiate their claims.  According to a study by Cornell University’s Global Labor Institute, total economic exposure for the project’s construction in the United States is only estimated to be $3.3 billion, as compared to the $7.7 billion touted by Republicans and lobbyists for TransCanada.  Additionally, TransCanada’s claim that the Keystone project would create 20,000 direct-construction jobs in the U.S. is unsubstantiated.  According to a January 2014 State Department study, there would be only 3,900 direct construction jobs created as a result of the project.  TransCanada asserts that total direct and indirect U.S. job creation would be 119,000.  However, the State Department finds that the pipeline would only yield a total of 42,000 U.S. jobs.2  Finally, a common claim among the pipeline’s proponents is that Keystone would lead to lower gasoline prices for consumers across the United States due to increased access.  But, a Cornell survey finds that the pipeline would divert existing shipments of Canadian crude oil from Midwestern refineries to the Gulf of Mexico, which would result in higher gasoline prices for Midwestern consumers.3

But a recent study in the Energy Journal refuted the claim that gas prices would increase as a result of the pipeline.  In fact, the study finds that gasoline prices in the Midwest are not even influenced by refinery activity in the region.[1]  This is because of the recent influx of U.S. oil that is being produced under the global market price, and the oil boom in North Dakota. Concerns from commercial agriculture also pervade the Keystone debate.  In Nebraska, where 6% of American agricultural receipts are generated, farmers are concerned about groundwater contamination.  The cleanup from a 2010 Canadian pipeline spill in Michigan has already generated over $1 billion in damages.  A potential spill from Keystone, in a more agriculturally dominant state like Nebraska, could cause devastating damage that to the state.5  As a final affront to opponents of the Keystone pipeline, Cornell cites the possibility for a recession in the growing U.S. green energy sector, which has already generated 2.7 million U.S. jobs through the nation’s increased focus on fossil fuel production and the associated lower prices (CITE).

 

Clearly, the Keystone debate is still incredibly polarized.  Myriad conflicting studies, and politically charged bodies, are creating clouded opinions for both U.S. members of Congress and U.S. citizens.  The research on the precise economic and environmental impact of the pipeline is still forthcoming.  But, in the end, the facts may be more exaggerated at both ends of the spectrum.  At some point, the trigger will be pulled in Washington by whichever stakeholder has the most to gain from the pipeline, or by whomever believes that it is the right thing to do for the good of the American people. The only remaining question is when.  The answer to this question will likely depend on whether there is a change in the political command of the White House, and the reliability of future research.  Ultimately, Keystone XL will remain a symbol for policy rhetoric in this country because it is a symbol that has been sparking debate across diverse communities with myriad interests— a refreshing outcome for Washington, D.C.

Sources

Borenstein, S., & Kellogg, R. (2014). The Incidence of an Oil Glut: Who Benefits from Cheap Crude Oil in the Midwest?. Energy Journal35(1), 15-33.

Eilperin, J., & Clement, S. (2014, March 07). New Post-ABC News poll: Keystone XL project overwhelmingly favored by Americans. Retrieved from

Skinner, L., & Sweeney, S. (2012). Pipe Dreams? Jobs Gained, Jobs Lost by the ConstruCtion of Keystone XL (Rep.). Itaca, NY: Cornell University Global Labor Institute.

Sweeney, S., & McKibben, B. (2011, October 05). No to the Keystone XL pipeline. Retrieved from http://articles.latimes.com/2011/oct/05/opinion/la-oe-mckibben-tarsands-pipeline-20111005

Walker, G. (n.d.). Final Supplemental Environmental Impact Statement for the Keystone XL Project (Vol. 1, Rep.). Washington D.C.: Bureau of Oceans and International Environmental and Scientific Affairs. http://www.washingtonpost.com/politics/new-post-abc-news-poll-keystone-xl-project-overwhelmingly-favored-by-americans/2014/03/06/d74c58c6-a4a1-11e3-a5fa-55f0c77bf39c_story.htmlWoods, E. D. (2013). Line in the sand. Virginia Quarterly Review89(4), 140-157.

 

 

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