Keystone XL pipeline won't live up to promises

May 17, 2013

By Anna G. Eshoo (D-Palo Alto)


In 2008, the Canadian company TransCanada proposed the construction of a pipeline to move tar sands oil, one of the dirtiest fuels on Earth, from Alberta to the Gulf Coast of Texas for export. The project, called Keystone XL, was rolled out like a luxury car, with promoters touting it as a crucial energy and jobs project during a period of high unemployment and rising gasoline prices. "Tens of thousands of jobs," "secure, stable oil from a friendly neighbor in Canada" and "home run" are some of the selling points Americans have heard in television ads, congressional hearings and across the Internet.

But there are alarming details in the fine print. Keystone XL will create few long-term jobs, will do nothing to lower gas prices or improve our energy independence and poses serious risks to our environment.

Keystone XL backers have widely touted a TransCanada report that projects the pipeline will create 20,000 U.S. jobs, including 13,000 in construction and 7,000 in manufacturing. The U.S. Chamber of Commerce has been even more optimistic, crowing that it will create 250,000 permanent jobs. But the State Department's recent projections, made in consultation with TransCanada, reveal the truth.

During construction, up to 42,100 direct and indirect temporary jobs will be supported by the project. However, in less than two years when construction is completed, Keystone XL is expected to support only 35 permanent jobs. In other words, this multibillion-dollar project will be responsible for almost as many permanent jobs as a new drive-through for burgers and shakes.

With all the promises of energy security, it would be reasonable to assume Keystone XL guarantees the U.S. will be an end consumer of the Canadian tar sands oil. In fact, consumers won't see one drop remain in the U.S. market. TransCanada's president of energy and oil pipelines, Alex Pourbaix, admitted this under questioning at a House Energy and Commerce Committee hearing in 2011 when he said the company was not willing to put into law or shipping contracts language that guarantees the oil remains in the U.S. Because tar sands oil is expensive to produce, oil companies want an export route to the more lucrative international market.

Keystone XL would actually increase the price of oil for Americans. If built, Canadian tar sands oil currently flowing to Midwest refineries will be diverted to the Gulf, causing U.S. prices to rise to the international price. TransCanada has admitted in filings before the Canadian National Energy Board that this is indeed their strategy.

Furthermore, the U.S. will bear 100 percent of the risk of a catastrophic spill in return for serving as a conduit for Canadian oil to reach the international market. This is not a theoretical risk. Last month, an Exxon Mobil pipeline spilled about 5,000 barrels of oil in Mayflower, Ark., forcing residents to evacuate their homes. In Marshall, Mich., cleanup is still ongoing after a spill of 800,000 gallons in 2010, which is expected to cost hundreds of millions of dollars.

America needs reliable energy resources and job growth. The proposal partially addresses one of those needs with its temporary job projections. But the costs outweigh the benefits, and the project does nothing to address our job and energy security challenges with long-term solutions.

A public comment period has just concluded, and the State Department is preparing a final report to help President Barack Obama decide whether the pipeline is in the "national interest." If he decides it is, TransCanada gets a permit to build the pipeline. Let's hope he doesn't end up driving this Pinto of an energy and jobs plan off the lot.

Published in the May 17, 2013 edition of the San Jose Mercury News.