by Brendan Smith
The American labor movement is once again facing a most controversial issue — the construction of the Keystone XL pipeline. While the KXL debate has largely centered around the environmental risks, from labor’s perspective opening up the Canadian Tar Sands is often seen as an economic, not an environmental, issue. And it’s no wonder: Construction unemployment is double the national average and, from a worker’s perspective, Keystone jobs will be good-paying union jobs in an economy that increasingly offers up only minimum-wage service work.
As AFL-CIO President Richard Trumka explained last year, “mass unemployment makes everything harder and feeds fear. . . opponents of the pipeline [need to] recognize that construction jobs are real jobs, good jobs.” KXL advocates have worked hard to capitalize on this fear by arguing that labor must choose between creating jobs and protecting the planet.
While labor leaders weigh the pros and cons of building KXL, they should keep in mind that the pipeline is as much a threat to our economy as it is to our planet. After a year of extreme weather — at an extreme cost to the economy — this age old jobs vs. environment debate is emerging as a false choice. Hurricanes, floods, and droughts are already having a devastating effect on American jobs, and that is nothing compared to what will happen if we throw open the spigot to the tar sands from Canada, considered the dirtiest oil in the world.
Here are 5 reasons why building the Keystone pipeline is bad for the economy — and workers.
1. Building the Keystone pipeline and opening up the Tar Sands will negatively impact national and local economies: Burning the recoverable tar sands oil will increase the earth’s temperature by a minimum of 2 degree Celsius, which NYU Law School’s Environmental Law Center estimates could permanently cut the US GDP by 2.5%. At the same time state and local economies are already buckling under the real-time economic effects of our nation’s dependence on fossil fuels. In the past two years, the vast majority of U.S. counties ““ 67 percent ““ were affected by at least one of the eleven $1 billion dollar extreme weather events. Superstorm Sandy alone caused an estimated $80 billion in damage. The drought that affected 80% of US farmland last summer destroyed a quarter of the US corn crop and did at least $20 billion damage to the economy.
2. The same fossil fuel interests pushing the Keystone pipeline have been cutting, not creating, jobs: Despite generating $546 billion in profits between 2005 and 2010, ExxonMobil, Chevron, Shell, and BP reduced their U.S. workforce by 11,200 employees over that period. In 2010 alone, the top five oil companies slashed their global workforce by 4,400 employees “” the same year executives paid themselves nearly $220 million. But at least those working in the industry as a whole get paid high wages, right? Turns out that 40 percent of U.S oil-industry jobs consist of minimum-wage work at gas stations. Instead of bankrolling an industry that is laying off workers and threatening our economic future, isn’t it time to take the billions in subsidies going to oil companies and invest instead in a sector that both creates jobs and protects the planet?
3. Unemployment will rise: According to Mark Zandi, the Chief Economist of Moody’s Analytics: “Superstorm Sandy wreaked havoc on the job market in November, slicing an estimated 86,000 jobs from payrolls.” In the wake of Hurricane Irene, the number of workers filing unemployment claims in Vermont went from 731 before Irene to 1,331 two weeks afterwards. Hurricane Katrina wiped out 129,000 jobs in the New Orleans region “” nearly 20 percent. For the U.S. economy as a whole, 2011 cost US taxpayers $52 billion.
4. Poor and working people will be disproportionately affected: KXL and projects like it result in disproportionately negative impact on already struggling working families. According to a recent report by the Center for American Progress called “Heavy Weather: How Climate Destruction Harms Middle- and Lower-Income Americans, lower-and middle income households are disproportionately affected by the most expensive extreme weather events. Sixteen states were afflicted by five or more extreme weather events in 2011-12. Households in disaster-declared counties in these states earn $48,137, or seven percent below the U.S. median income.
5. Building the sustainable economy, not the Keystone pipeline, will create far more jobs: Our nation is in desperate need of jobs. Approving the Keystone pipeline locks our nation into a trajectory of guaranteed job loss and threatens the stability of the US economy. Why keep the “job-killing” course, when the alternative-energy path is already out-performing other sectors of the economy. For example, the solar industry continues to be an engine of job growth — creating jobs six times faster than the overall job market. Research by the Solar Foundation shows a 13 percent growth in high-skilled solar jobs spanning installations, sales, marketing, manufacturing and software development — bringing total direct jobs to 119,000 in the sector. And according to the Political Economy Research Institute at the University of Massachusetts”“Amherst, investment in a green infrastructure program would create nearly four times as many jobs as an equal investment in oil and gas.
A study by Synapse Energy Economics developed a Transition Scenario for the electric power industry based on reducing energy consumption, phasing out high-emission power plants, and building new, lower-emission energy facilities. The study estimated the number of “job years” “” one new worker employed for one year “” that would be created by the Transition Scenario over a decade:
- 444,000 job-years for construction workers, equivalent to 44,400 construction workers working full time for the entire decade.
- 90,000 job-years for operations and maintenance workers, equivalent to about 9,000 full time workers employed over the decade.
- 3.1 million indirect jobs for people designing, manufacturing, and delivering materials and jobs in local economies around the country induced by spending by workers hired in the Transition Scenario.
Organized labor is right to demand that public policy pay attention to our desperate need for jobs. But the Keystone XL pipeline will only make our jobs crisis worse by making our climate crisis worse. Plus, there are lots of pipelines that need fixing. Construction workers can be put to work rebuilding our crumbling natural gas transmission pipeline system — this will create good union jobs and cut carbon emissions. And these same workers can rebuild our crumbling water infrastructure. If labor is going to fight for jobs, let’s fight for jobs that build the future we want for ourselves and our children, not ones that will destroy that future.
The Keystone XL pipeline is a delivery system that is designed to carry over 800,000 barrels of oil sands petroleum per day from Western Canada to oil refineries along the Gulf Coast of the United States. Around half of the pipeline has already been completed, but its construction has always been opposed by various environmentalist groups.
The Keystone Pipeline pros and cons show that this project has the potential to continue generating jobs and revenues for TransCanada and much of North America. Because many pipelines are prone to leaks, there is also the potential risk of groundwater contamination that must be considered. Here are some of the additional key points to look at in this ongoing conversation.
What Are the Pros of the Keystone Pipeline?
1. The Keystone Pipeline can be a major job creation project.
The US State Department has estimated that the construction of the pipeline project could create up to 42,000 jobs over a two-year construction period. Most of these jobs would be considered temporary, but about 38,000 of them would be considered support jobs, such as food service. About 35 permanent jobs would also be created with this project.
2. The Keystone Pipeline can be a major economic contributor.
It is believed that the Keystone XL pipeline has the potential to contribute more than $3 billion annually to the US economy once it become operational. It would also create an estimated $2.4 billion (in US dollars) for Canada, which would be split between the government, shareholders, and company reinvestments. It would also allow Canadian producers to receive up to $2 more per barrel from the tar sands oil.
3. It would re-establish the Alberta oil sands sector for Canada.
The oil price slump from 2014-2016 has taken away more than 35,000 local jobs in Alberta that contribute or support the extraction of petroleum. This has created a revenue deficit of nearly $1 billion, with the required shutdown from the wildfires that destroyed the region. Completing the Keystone XL pipeline would provide more support for this sector and establish sales that could restore many of the local jobs.
4. It creates a reliable product for Gulf Coast refiners to process.
The refiners in the US who would be processing the tar sands oil would also benefit from this project’s completion. Their current products come from suppliers that are considered to be “less than reliable,” according to a report from Reuters. Instead of relying on product from Mexico or Venezuela that may or may not come in, Keystone offers a daily refining option that can support US jobs.
5. It makes the Canadian economy more efficient.
The oil industry in Canada is responsible for 1/6 of the nation’s economy. The issue that Canadians face with their oil is that there are several transportation constraints due to the location of their petroleum reserves. This has led to a consistently high cost of production. With Keystone, Canadian producers can raise prices because the quality of the petroleum will be better while they are able to cut into their overhead costs at the same time.
6. The amount of emissions added to the atmosphere from Keystone XL are negligible.
At full production, the EPA believes that the Keystone pipeline will add about 19 million metric tons of atmosphere annually to the atmosphere. This figure is in comparison to conventional oil production. In 2011, the US was responsible for about 5.5 billion tons of carbon pollution, which was second only to China’s 8.7 billion tons of carbon. This means the increase would amount ot less than 1% of the totals already produced.
7. Pipeline transportation is safer than other methods.
TransCanada has essentially said that they are going to process tar sands oil whether the pipeline extension for Keystone is built or not. This product can be transported by rail and other options, but the pipeline is the safest method of transportation. In a world where the tar sands oil is going to make it to its destination one way or another, it is usually the best option to choose the safest method of transportation. In this instance, its Keystone XL.
8. It isn’t a full pipeline project.
The Keystone pipeline already exists in a completed state. At the moment, it delivers tar sands oil to the Midwest. The goal is to extend the pipeline down to the Gulf Coast to increase potential processing capacities with an asset that already exists. The reputation of the Keystone pipeline is already a proven commodity with a history that can be verified independently.
9. It promotes US oil development in addition to supporting Canadian development.
Part of the oil that will be shipped through Keystone XL will come from the Bakken Shale formation, which is located in Canada. This means US jobs in the oil industry will be supported at the same time the project is supporting Canadian jobs.
What Are the Cons of the Keystone Pipeline?
1. It would transport one of the most damaging forms of fossil fuels available to us.
Tar sands oil is called “bitumen.” The petroleum is combined with clay, sand, and water to create a very thick mixture which must have the oil extracted from it. There are only two proven ways to remove bitumen from the ground. According to the New York Times, one method includes using water and natural gas to pump steam into the tar sands, which creates the potential for a toxic runoff. Strip mining is the other option.
2. The issues from DAPL are often associated with Keystone XL.
The protests from the Dakota Access Pipeline are often associated with the Keystone pipeline. Although the two projects are somewhat similar in what they hope to accomplish, the environmental concerns are slightly different for Keystone. There isn’t the direct access and arguably unapproved access through tribal lands with Keystone as there allegedly is with DAPL.
3. The interests which have been promoting Keystone have been cutting industry jobs.
The oil industry has been cutting jobs since 2005 instead of adding them. Despite record profits of nearly $550 billion between 2005-2010, the top companies of the industry have actually reduced their employee numbers by over 11,000 workers. The top 5 oil companies in 2010 laid off 4,400 employers, despite paying executives bonuses that topped $200 million.
4. Most support jobs for Keystone XL pay minimum wage.
2 out of every 5 workers who work an oil industry job work for the local minimum wage at a fuel station. With less than 4,000 high paying construction jobs being generated by the project, which are temporary as well, the majority of opportunities that this project will create for people and families is going to be minimal.
5. It will still add more emissions to the atmosphere.
Although the overall impact to the environment from Keystone is expected to be limited, it is still an addition at a time when reduction has been a consistent point of emphasis. Millions of pounds of carbon are still an issue, no matter what the final percentages happen to be. Adding to global warming instead of subtracting from it has the potential to reduce GDP in the United States by up to 2% each year the pipeline is active. In practical terms: if Keystone XL goes active, it would be the equivalent of adding 5.6 million cars to US roadways every day.
6. Tar sands oil has the potential to be highly corrosive.
The oil that will be piped through the Keystone XL extension is some of the most corrosive petroleum that is used today. This means the interior of the pipeline will eventually wear down, which increases the opportunities for it to spring a leak somewhere. This corrosiveness has the potential to affect the air quality in the neighborhoods which surround the refineries along the Gulf Coast where the oil will be processed.
7. More jobs could be created with sustainable investments.
The Political Economy Research Institute estimates that more than 160,000 jobs could be created with a short-term renewables or green stimulus package with a $100 billion investment compared to the 40,000 estimated jobs such an investment would create for the oil industry.
8. It locks the United States into a contract that extracts oil from inefficient sources.
Although Keystone XL does promote energy independence for Canada and the United States, it is doing so through a resource that isn’t entirely efficient to obtain. This means there will always be doubt over the contracts from this fossil fuel because the cost of importing oil could, at times, be cheaper than the locked-in costs of what the pipeline offers.
The Keystone pipeline pros and cons show that there is the potential for economic growth to be achieve, especially in Canada. It also shows that there is the potential for harming the environment more than we already are. All options should be considered with this project so the economics of this situation can be maximized and the environmental impacts minimized before it is completed.