The Pipeline From Hell: There’s No Good Reason to Build Keystone XL
No lasting jobs, no cheaper gas, and a chance to kill off one-fourth of U.S. farmland and maybe the planet. Why are both parties going all out to get such a crappy deal?
The Senate will vote Tuesday on whether to authorize the construction of the Keystone XL Pipeline. The Republican-led House approved the initiative Friday by a wide margin. The Senate’s still-Democratic majority will bring the bill to the floor for the first time because of newfound support for the initiative within the party, mostly to boost Sen. Mary Landrieu’s bid for reelection in Louisiana as she heads into a runoff with Rep. Bill Cassidy, a Republican. Cassidy leads in every poll of likely voters in that race by an average of 5 percentage points.
Support for the pipeline has surged among Democratic legislators in the wake of the midterm elections, when Democratic senators in red states were swept out of office. Those that remain—among them Sens. Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota, and Claire McCaskill of Missouri—are eager to boost their pro-energy, pro-business bona fides.
If Democratic support is new, Republicans’ enthusiasm for the project is not. Friday’s vote was the ninth time the House has approved the pipeline under a Republican majority. As soon as the midterm results had rolled in, the victorious party’s messaging shifted en masse. Republican National Committee Chairman Reince Priebus made the TV rounds on Election Night, and by the time he arrived on The Daily Show’s live edition, he had his message down to a T: “I think that what we’re going to see is that the president’s got to come to the table, and both parties are going to have to work together to get things done… It’s going to take the president saying ‘I want to work with you, I want to pass some of these jobs bills, I want to pass the Keystone Pipeline and get things done.”
It’s a well-worn, exceedingly vague message. From his phrasing, it seems that the pipeline is a no-brainer, a job-creation machine that enjoys support from Republicans and Democrats alike. Priebus mentioned it in seemingly every post-election appearance, references made their way into victory speeches from the GOP’s biggest power players, and they’ve since declared the project’s approval a top priority.
It seems America’s two major parties are finally coming together in favor of a significant legislative initiative. But should they be?
Keystone XL would be an addition to the existing Keystone Pipeline System. It would be built by TransCanada Corp. and would run from Alberta’s tar-sands fields through Montana and South Dakota to link up with the system in Steele City, Nebraska. It would transport bitumen and liquefied natural gas drawn from the tar sands to refineries on the Gulf Coast, mainly in Texas.
The XL addition was proposed in 2008, and studies on the project’s potential economic and environmental impact were commissioned in 2010 and 2011. President Obama rejected the project’s application in 2012 amid protests that it would hurt Nebraska’s Sand Hills region. An adjusted route through Nebraska has since been proposed, and a State Department report declared the project’s environmental effect was “not significant,” but the Obama administration announced in April 2014 that the review of the project has been extended indefinitely.
Why, if the project will create a lot of jobs and have little environmental impact, does it continue to be met with opposition? To begin with, it won’t actually create many jobs. According to a George Mason University study, via Bloomberg, the pipeline’s construction could create between 2,500 and 20,000 jobs. More likely (PDF), it’ll be between 2,500 and 4,650, assuming that a huge chunk (as much as 50 percent) of steel production will be outsourced to China, Canada, and India. Moreover, when construction ends, the number of permanent jobs could fall to 20. Yes, 20.
A rosier estimate, from the State Department’s report and Newsweek, puts the number of permanent jobs at 35. A study by Cornell’s Global Labor Institute claims that the project may actually kill more American jobs than it creates due to pipeline spills, additional fuel costs in the Midwest, and other factors. It also claims that 85-90 percent of people hired for the line’s construction will not be from the areas through which the pipeline is running.
So, it won’t create that many jobs. After all, it’s merely taking oil drilled in Canada to pre-existing refineries on the Gulf Coast. But it’s a $7 billion project, and the State Department has said it will have a minimal negative effect on the environment. Plus, it could increase America’s energy independence and strengthen our position in the Middle East and beyond. These are all good reasons to move ahead with the plan, but unfortunately, none of them are actually true.
The pipeline is a $7 billion project, but only $3 billion-$4 billion of that would be headed to the U.S. The rest is going to wherever that steel is getting outsourced. The claim of reduced dependence on foreign oil suppliers is also suspect. China has already invested billions in Canada’s oil sands, and Chinese corporations are upping their stakes all the time. Much of the oil transported by the pipeline will be refined in Port Arthur, Texas, where the main refinery is half-owned by the state-owned oil company of Saudi Arabia (PDF). The Keystone project is not an American one, but a global one, financed and favored by major multinational oil interests. Besides, real domestic oil production—oil drilled and refined in the U.S. by nominally American companies—has already increased 70 percent under the Obama administration.
All of this means that the pipeline’s approval would essentially be a continuation of the status quo, with a few billion dollars kicked the U.S. economy’s way. Except that the project would, in spite of the State Department’s claims, have drastic effects on the environment on both local and global levels. That study published by the State Department was conducted by Environmental Resources Management (ERM), a firm that listed TransCanada, the would-be pipeline builder, as a client in its marketing materials a year before it began the Keystone contract.
Both ERM and TransCanada told the State Department at the time that they had not worked together for at least five years, a term of the contract meant to limit conflict of interest. Of course, any doubts about a conflict of interest evaporated when it emerged that up until the summer of 2013, a division of ERM had been “working alongside TransCanada on the Alaska Pipeline Project.” These are two in a laundry list of troubling connections between the two companies.
Considering, then, that the State Department study was conducted by TransCanada’s business partner, it’s little surprise that it failed to find any environmental consequences for the project. The reality is far different. On a local level, pipeline leaks and spills could have a number of drastic effects. Recent leaks from similar lines have been bad. Really bad. A New York Times article cites a 2010 leak of 840,000 gallons of bitumen into Michigan’s Kalamazoo River. The cleanup has cost $1 billion so far, and continues today.
It also mentions an Arkansas leak that sent 210,000 gallons of bitumen running through the streets of small-town Mayflower and left local residents with respiratory problems, nausea, and headaches. The proposed Keystone route would see it “pass over the Ogallala Aquifer, the lifeblood of Great Plains agriculture,” where the water table is close to the surface. A major leak could poison the water supply of large swaths of the Midwest that add up to one quarter of the nation’s farmland.
The pipeline also has environmental consequences on a larger scale. The pipeline would encourage accelerated extraction of Canada’s tar sands, which have greenhouse gas emissions 81 percent greater than those of conventional oil. By most measures, it is the dirtiest fossil fuel on the planet. James Hansen, formerly of NASA, claimed in a 2012 op-ed that the tar sands contain twice the amount of carbon dioxide emitted by global oil use in our entire history. If true, its exploitation along with our continued use of fossil fuels at present levels would bring carbon concentration in the atmosphere above the 500 parts per million threshold often discussed by climatologists as the point of no return. That would create an irreversible cycle wherein the climate is beyond our control. Hansen describes it as “game over for the environment.”
Even if that’s an alarmist prediction, and Canada will exploit their tar sands with or without the Keystone XL Pipeline, there is no question that its construction will not help with controlling emissions, boosting energy independence, or creating jobs. The only people it will benefit are TransCanada, the Canadian oil companies (many part-owned by Chinese and Mideast interests) working in the tar sands, the multinational oil companies who will refine what it brings to the Gulf Coast, and a few thousand workers. Temporarily.
So why, you might ask, are many of our leaders so eager to build it? The answer is straightforward: money and political gain. The Democrats, feeling vulnerable after a midterm rout, are eager to move to the pro-business center and push through a “jobs plan.” A Nov. 12 Pew Research poll shows 59 percent of Americans favor building the pipeline, which provides some political cover from the backlash Democrats will likely get from environmentalists and other sections of the party’s base.
It also conveniently caters to the interests of Big Energy, some of the biggest campaign donors to both parties. Republicans, in the House especially, have been pushing Keystone for some time and raking in donations in the process. Now, Blue Dog Democrats like Mary Landrieu are happy to hop on board. After all, some of the world’s biggest energy firms, like Exxon Mobil, have been paying her campaign bills for some time.
An initiative most thought would be pushed by the Republican majorities in the next Congress will come to the floor in the current lame-duck session. In a rather pathetic political maneuver, the Senate Democrats will try to force the president’s hand before the new Republican majority gets the chance, apparently to help in a single Senate runoff election that will not in any way alter the upper chamber’s political landscape. After all, the Democrats have no chance of keeping their majority even if Landrieu wins.
For his part, Obama has said he will veto the measure. Pundits widely expected that he would insist on the need to wait for the results of further studies and the Supreme Court ruling on land use in Nebraska. Instead, he came out Thursday with an unequivocal rejection of the premise on which the argument for the pipeline is built: “Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn’t have an impact on U.S. gas prices. If my Republican friends really want to focus on what’s good for the American people in terms of job creation and lower energy costs, we should be engaging in a conversation about what we are doing to produce more homegrown energy.”
The president is right in his criticisms, but wrong to reserve them only for the Republican Party. Many from his side of the aisle are now just as wrong on this issue as his opponents are.