Keystone Pipeline: How Many Jobs Can It Create?

After, conspicuously, leaving the Keystone Pipeline out of his State of the Union address, President Obama formally rejected the Keystone XL oil pipeline on Wednesday, January 18. The $7-billion, 1,700mile project, which would carry roughly 800,000 barrels a day of bitumen (residue of petroleum distillation) has polarized American politics. One fiercely debated issue is how many jobs the pipeline would create for a sputtering American economy.

GOP presidential hopeful Mitt Romney recently said, “President Obama’s decision to reject the Keystone XL crude oil pipeline is as shocking as it is revealing…if Americans want to understand why unemployment in the United States has been stuck above 8 percent for the longest stretch since the Great Depression, decisions like this one are the place to begin.”

“Transcanada, the energy giant bidding for the project, projects the undertaking would create 20,000 jobs in the United States, including 13,000 positions in construction and 7,000 in manufacturing.” It is important to note that the Transcanada study counts each job on a yearly basis. So one job worked for two years is counted as two jobs in the study. The US Chamber of Commerce is even more optimistic, projecting the project would create 20,000 high skilled construction jobs in the short run and 250,000 permanent jobs over the long haul.

There are, however, those that believe these statistics are inflated. The U.S. State Department forecasts the pipeline project would create 5,000 jobs over the two year construction projects. One Cornell University study actually projects the pipeline project will reduce the total number of jobs, noting that the project will raise the price of fuel in the Midwest thus slowing consumer spending and costing jobs. The study also points out that the steel pipe used to build the pipe would not be forged in the United States.

President Obama cites the wide discrepancies in economic projections, along with the unknown dangers the pipeline may have on the environment as his reason for blocking the project. He said the 60-day time window for voting on the pipeline was insufficient and the rejection is not his final word on the subject. It is unclear where the political dominoes will fall, but the pipeline has stirred up passionate supporters and detractors and stands as an example of the state of polarized American politics.

Written by: Michael Baskind, GIELR Staff

One response to “Keystone Pipeline: How Many Jobs Can It Create?

  1. It is really a little bit strange that this huge project was rejected, and so many jobs lost as well as the possibilities to inport oil from a near country instead of bringing it in from the Middle East. There must be a more profound reason for it that we obviously don’t know.

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