SUMMARY THE HISTORY
The Keystone XL pipeline was designed to carry Canadian tar sands oil from Canada to Gulf Coast refineries in America. By the time the project was canceled, the project had been delayed for the previous 12 years due to opposition from U.S. landowners, Indian groups, ranchers, farmers, and environmental groups who had blocked this project in court on and off since 2008. It was never completed in the 4 years of the Trump administration. The developer canceled the project after Biden blocked a construction permit.
THE OBJECTIONS
It is the dirtiest and most corrosive fuel product. It is very expensive to produce and to refine, with a high risk of oil spills. It would have had significant impacts on the environment and climate change. It was a Canadian fuel product destined to be sold overseas.
MARKET IMPACT
Less than 2000 seasonal jobs for 2 years would have been needed for construction. An estimated 50 jobs would have been needed for operation. There was no loss of oil production when the project was cancelled because the project was never operational. Even after completion, the project would not have brought down gasoline prices in America. It was a Canadian product to be sold overseas, having very minimal impact on the world market for oil. In the prior 15 years, American oil production had doubled and gasoline prices were still peaking.
THE PROPAGANDA
The right-wing news media wants to blame the loss of a large number of jobs and the high gasoline prices on the cancellation of the XL pipeline project. But the project was discussed and planned for 12 years before it was canceled, and not a single drop of tar sands oil ever passed through the Keystone XL pipeline. Today, a record-high amount of light sweet crude that is much safer is being produced in America. But the price of gasoline is still not low. History has proven that canceling the XL pipeline was the right decision. But the cancellation of the XL pipeline remains one of the most enduring fake news stories in America.
DETAILS
THE HISTORY
The Keystone XL pipeline extension, proposed by TC Energy (then TransCanada) in 2008, was initially designed to transport the planet’s dirtiest fossil fuel, tar sands oil, from Canada to refineries at the Gulf Coast of Texas (1). From the refineries, the gasoline would be sent overseas. The project was delayed for some time because tar sands oil is an expensive product that requires high oil prices to be profitable (4). In 2011, there was a joint report about the risk of tar sand spills. The report mentioned a billion-dollar problem in Michigan from a leak of tar sands oil. Obama blocked or delayed the XL pipeline project in 2012 due to a lack of studies on the impact (3). A bill was passed in the House of Representatives in 2015 to support the project, but Obama vetoed the bill (5). In November 2015, Obama rejected the project. (6) There were environmental concerns, but also the American production of cleaner fuel was increasing and oil prices were moving lower, making tar sands oil less profitable. . Trump granted approval for a construction permit in 2017 (7).. This pipeline project was again blocked in court in 2018 (8). The court's block of the pipeline project was reversed on appeal 2019 (9). Trump signs for a construction permit for the XL pipeline project (17). In 2019, Indian tribes sued the government about the Keystone XL pipeline (16). The pipeline project was blocked again by the court in 2020 (10, 11, 12). This project never made progress for all 4 years of the Trump administration. In 2021, Biden blocked the construction permit for the Keystone pipeline, citing concerns about the impact on public health, the environment, climate change, and the need for cleaner fuels (13). The developer canceled the Keystone XL pipeline project because the construction permit had been blocked (14, 15, 18).. But also, fracking in America was starting to produce more light, sweet crude, and the price of oil was going down, reducing the profitability of tar sands oil. Other oil companies like Shell and TotalSA had already canceled their tar sands projects because the profitability was marginal (4).
THE OBJECTIONS
The tar sands oil is not conventional petroleum. It is bitumen, an oily, highly corrosive sludge (20). It is expensive to produce, and refiners pay $20-$30 per barrel less than conventional crude oil (19). It costs three times as much to transfer the bitumen by rail as by pipeline. So tar sands oils by rail could only be profitable if oil is at extremely high prices. There have been numerous studies done on the safety risks of bitumen (20, 21, 22). A study done by Cornell University found that the risk of spills of tar sands oils per mile is three times higher than the risk for conventional oil. TC Energy had 35 tar sands oil spills in 2010. There have been some extremely large spills of tar sands oil. In 2010, more than 800,000 gallons of tar sands oil were spilled in Michigan. The cleanup took more than 5 years and cost over a billion dollars (22). Tar sands oil costs 10 times more to clean up than conventional oil. There have been numerous tar sands oil spills that involve hundreds of thousands of gallons and take more than 5 years to clean up. There are significant health hazards, and sometimes many homes must be abandoned. Water with oil cannot be used for drinking or for watering crops. There is a significant risk of loss of jobs in agriculture or tourism. The Canadian oil companies would get most of the benefit from the XL pipeline project carrying tar sands oil. But farmers, ranchers, Indian tribes, and midwestern home owners would get most of the liability. Factual data on the tar sands oil spills shows that oil spills occur 100 times more frequently than estimated by the Canadian tar sands company. Studies by Cornell and the University of Nebraska concluded the Keystone XL tar sands pipeline was more of a liability than a benefit (23). Stanford Professor Adam Brandt explained why tar sands oil is more polluting than conventional oil (23b). It was the opinion of the well-known climate scientist, Dr. James Hansen, that this project would have had a very negative impact on climate change (23).. MARKET IMPACT
There is a significant question about how many jobs could be generated for tar sands oil pipeline projects. Tar sands oil companies sometimes estimate very high estimates to justify projects.
In 2011, Republican presidential candidate Jon Huntsman said that the XL pipeline project would create more than 100,000 jobs. And Republican Kay Bailey Hutchison of Texas said the project "promises 20,000 immediate jobs and 118,000 spin-off jobs" (24). Both were apparently getting their numbers from TransCanada (later called TCEnergy). There have been lots of wild estimates of the number of jobs created by the XL pipeline project (25). A report from Cornell University estimated a far lower number (25b). This report thoroughly debunks some previous studies to advocate for the project. It shows that not many jobs will be produced in the US, and the clean-up cost could be substantial. In 2014, Congressman Bobby Scott from Virginia objected to legislation to force approval of the XL pipeline because oil prices were low, the oil will be sold outside the US, the risk of damage to drinking water, farmlands, and tribal grounds is high, and Canada would be exempted from liability (26). The estimated full-time permanent jobs after the pipeline was built would be 35 employees with 15 part-time jobs. In 2015, Congressman Mo Brooks estimated that the number of jobs created by the XL pipeline would be 150,000 jobs to create and operate the pipeline (27). By 2015, pompous pundit George Will was providing a very critical assessment of the job estimates from Obama. He had no understanding of the significant risks from tar sands oil compared to conventional petroleum. And he had no understanding that the construction jobs were considered temporary, not due to the whims of the market but because after construction a pipeline requires only a very small staff for operation. And he did not understand how the DOE job estimates were developed. His essay on the topic of the XL pipeline should be reviewed as an example of the classic cluelessness of conservative punditry (28). By 2017, Trump estimated that the XL pipeline would create 28,000 jobs (29). It was already well known by that time that the completed pipeline would only require 35 full-time employees and 15 part-time employees to be operated (30). The Washington Post did some fact-checking, and even with very generously unrealistic assumptions, it showed that Trump's estimates were wrong (31). The Austin Statesman posted some fact-checking that pointed out that the construction workers on the XL pipeline would be part-year seasonal workers that would be equivalent to 3900 workers total for 2 years. The Washington Post provided fact-checking of the Ted Cruz estimate of 11, 000 pipeline construction workers. They explained that due to the fact that the workers would be temporary, the equivalent work force would be 3900 full-time workers over 2 years. Less than 2000 full-time workers for each of 2 years. It may have been more accurate to say part-year seasonal workers. The fact-checking from Politifact on this issue has not been consistent. In 2013, Politifact said that Obama was wrong to estimate 2000 jobs for the XL pipeline project, but he said 2000 per year, and the project may go 1 or 2 years. If 2 years, then 4000 is very close to the estimate of 3900 from many other sources. In 2021 and 2022, Politifact was estimating 3900 jobs for 2 years, or 1950 per year for 2 years. The additional concern is the potential impact on the price of gasoline. Since the pipeline was never operational, the cancellation of the project did not have a direct effect on raising the price of gasoline. There was speculation that if the project was completed, it could have helped lower the price of gasoline. But the tar sands oil was a Canadian product destined to be sold over seas. And it was not a significant percentage of the world market production. By 2022, American oil production had doubled over the previous 15 years, and still the price of oil was peaking to a high point. PolitiFact provided the reasons that gasoline prices are unrelated to canceling the XL pipeline project (35). . This was also explained by CNBC (36). In 2024, America is producing more oil than any country in the history of the world, and the price of gasoline is still not low.
THE PROPAGANDA
The exaggerated estimated numbers of jobs lost by canceling the pipeline were published by some of the usual fake news media channels (36, 37, 38). A 2700-page infrastructure bill was passed in Congress in 2021. Right-wing news sources were happy to report that Republicans got included a provision to study the job losses from canceling the Keystone XL pipeline (39). In 2021, Facebook became a place to post outdated data from countries that heavily subsidize the price of gasoline (40). The actual problem was that the US economy was recovering so fast that the demand for fuel far exceeded the supply. But zero oil production was lost when the XL pipeline was canceled because the pipeline was never operational. There were numerous fact checks about fake stories related to the cancellation of the Keystone XL pipeline (41, 42, 43, 44, 45).
In 2022, the US Department of Energy did produce a report on the jobs lost by canceling the pipeline. This 2022 report was based on info from the similar State Department environmental impact report of 2014 with some additional comments. Take a look at the actual wording in the report.
2022 US Dept of Energy report language
The 2014 Final Supplemental Environmental Impact Statement found that there would be approximately 50 permanent jobs once the pipeline was operational. Construction jobs would be more significant but temporary; if construction were to take two years, about 3,900 direct jobs would be created annually during construction, and 21,050 U.S. total jobs would be created, counting indirect and induced jobs. • Other estimates for temporary jobs during the construction phase ranged from 16,149 to 59,468 annually for a two-year period. However, the study includes segments of the Keystone pipeline that were not related to the XL portion, and jobs corresponding to those sections that were built were realized. Additionally, the high-end figure comes from this study, which faced significant criticism for including in its analysis project inputs from India, Russia, and Russian companies in Canada, thus including jobs outside the United States.
There are a number of problems with this report.
(A) It erroneously states 3900 direct jobs annually for construction. In the 2014 report, the number was 3900 jobs total for 2 years, based on 1950 jobs per year. This is very close to the number Obama was using in 2013 when he said 2000 jobs per year for 1 or 2 years. The jobs are full-time equivalent seasonal jobs (during the seasons of good weather).
(B) The numbers are blown up by the addition of “induced” jobs. A simple example is that there may be an assumption that the construction workers “induce“ jobs for other people if they pay to get a haircut or buy groceries while working on the pipeline. The assumption must be that if they are American workers, they would not pay for haircuts or buy groceries if they were not working on the pipeline. These are imaginary jobs being created. A Cornell University study debunked these kinds of job estimates in 2011 (46) .
(C) The higher job numbers are including jobs to build other parts of the Keystone pipeline system that are already existing and operational. This is not part of the Keystone XL pipeline that got cancelled.
(D) The higher job estimates are including jobs in other countries (India, Russia, Canada) to build the pipe and other supplies. These are not American jobs. Lots of the pipe already had existed so long that the protective coating was deteriorating. By 2023, Republican congressman James Risch was bragging about a bill that he and Republican congressman Steve Daines passed in Congress to promote their misunderstanding of the 2022 DOE report on the jobs impact from cutting the Keystone XL pipeline report (47). The actual number of jobs for the construction of the Keystone XL pipeline would have been equivalent to 2000 jobs per year for 2 years. They clearly demonstrated that they are incompetent to analyze the impact of the projects they support, and they are oblivious to the dangerous consequences.
The fake news media used these exaggerated XL pipeline job numbers to report that this was the Biden administration admitting that they killed a large amount of jobs. (48, 49, 50).. Today, America is producing far more American light sweet crude than the amount of corrosive and dangerous fuel that would have passed through America from Canada.
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