Jonathan Alter: Keystone Pipeline Means Dearer Gas, Few Jobs
Keystone Pipeline Means Dearer Gas, Few Jobs
By Jonathan Alter
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But the immediate effect of completing the Keystone pipeline (perhaps by 2015) is more surprising and counterintuitive.
The project would increase domestic oil prices by more than $6 a barrel and prices at the pump in parts of the country by about 20 cents a gallon. You read that right. At a time when rising gas prices threaten President Barack Obama’s re-election, the Republicans’ most ballyhooed remedy — a new pipeline — would make the problem worse.
Before I explain why, here’s a little background on Keystone’s other practical shortcomings beyond its broader threat to a clean energy future.
The same Republicans who opposed the auto bailouts that saved about 1.5 million jobs (according to the Center for Automotive Research) claim that Obama’s delay of a decision on Keystone until after the election is a travesty because it’s a “job-killer.”
The president’s announcement in January that he would punt was highly political; he didn’t want to offend environmentalists in the Democratic base. But it’s a myth to say unemployment will rise as a result. TransCanada Corp., the company building the pipeline, initially estimated that the project would create “a few hundred” permanent jobs. The State Department put the number at 20. Experts I consulted say that maintenance of the specialty pipe used in Keystone is more complicated than the State Department figures indicate. Presumably the refineries processing the additional oil might add some jobs. So the total number of permanent jobs could perhaps be closer to 1,000.
Knowing that such paltry figures would harm their efforts to sell the project to the U.S. public, TransCanada underwrote a study by an outfit called the Perryman Group claiming that Keystone XL will create 119,000 total jobs. But according to a report by the Cornell Global Labor Institute, the Perryman study is bogus. It included the vaguely calculated multiplier effects of $1 billion spent for a section of the pipeline in Kansas and Oklahoma that has already been built and isn’t part of the controversial extension.
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