Type to search

Keystone Pipeline Means Dearer Gas, Few Jobs

Memo Pad

Keystone Pipeline Means Dearer Gas, Few Jobs


“I’ll get us that oil from Canada,” Mitt Romney said in his victory speech after the Michigan primary. He was referring to Keystone XL, the crude-oil pipeline that has become a top-tier campaign issue for Republicans.

Problem is, the tar-sands oil in that pipeline wouldn’t be coming to “us.” It would go directly from Canada to refineries in the Gulf region en route to export markets in Latin America and Europe. The U.S. would be used as little more than a transit corridor.

We’ve heard a lot about groundwater contamination near the completed portions of the pipeline — more than a dozen spills of the highly corrosive oil, including one near Kalamazoo, Michigan, that they can’t seem to clean up. Conservative Nebraskans became greens overnight when they learned the details of the project that will go through their state.

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.

The temporary construction and manufacturing jobs created by the project over two years — estimates range from 2,500 to 20,000, depending on how much of the money is spent in the U.S. — would be welcome, but by themselves they hardly justify approval of the whole thing.

The Republicans’ decision to politicize the issue is a perfect illustration of their pound-foolish approach. First they tried to hold up the payroll tax holiday (a proven job multiplier) if Obama didn’t approve Keystone. Now they are applying the same extortionist logic to the transportation bill, which would create hundreds of thousands more jobs than a single pipeline.

Jonathan Alter

Jonathan Alter is a bestselling author and journalist who served as senior editor for Newsweek from 1983 to 2011. He is currently a lead columnist for Bloomberg View as well as a contributing correspondent to NBC News. Alter's 2010 book, The Promise: President Obama, Year One, reached #3 on the New York Times Best Seller list.

  • 1


  1. VlastaMolak March 3, 2012

    Barak Hussein Obama’s stepfather in Indonesia was an spokesman for an oil company. The young Barak from the age of 6-10 lived with his Lolo Soetero stepfather, who just like his father, Barak Sr., was a Muslim Marxist. Those were Barak Hussein formative years and thus he may have an affinity to cater to oil companies, just as he caters to Saudi King, even though it was Saudi citizens who committed 9/11.

    President Obama is running for a second term in the White house and tells all people what they want to hear. You can fool some people ALL the time, you can fool ALL people some time, but not ALL the people ALL the time. Mr. Obama only needs to again fool ALL people during election in November, to get his second term, when he may try out his Caliph in Chief agenda ;-)!

  2. IndependentMinded March 3, 2012

    Your insights and pronouncements of President Obama’s thoughts, intents, and evolution, especially in like of your commitment to using his full name, would carry more credence if you would spell his name properly. Poor attention to one detail raises doubts about your other conclusions.

  3. Sleipnir March 3, 2012

    VlastaMolak seems to have forgotten the close ties the Bush family had to Saudi Arabia. GWB even held hands with the Saudi king. Were you outraged then? As for politicians being able to fool people look at the teapublican candidates. Romney has flip flopped so many times no one knows what he really stands for. Santorum is a close mineded hypocrite that votes for issues by taking one for the team and them repudiating them, Gingrigch is a morally bankrupt person that believes that by saying he’s found religion we should overlook all the despicable things he has done, and Ron Paul just wants to get rid of everything with no thought to the consequences. Even the republicans aren’t satisfied with any of the candidates but can’t come up with anyone else. Yeah, your right, you can’t fool all the people all the time just small minded, bigoted people.

  4. snarky March 3, 2012

    Just another ploy by the GOP to transfer more wealth out of the Middle Class and into the hands of the Power Brokers.

    The Oil And Saudis’ guy has lost his snail shells.

  5. akrugmanprogressive March 3, 2012

    Right on “Sleipner”. It is truely amazing when someone like “VlastaMolack” blogs that President Obama is catering to the Saudi’s when all of the previous administrations have done more to bend over to them then the current administration. How does he interpret the President’s delay in the Keystone project? I guess the President forgot about his “affinity to cater to the oil companies” on that decision. Then he talks about “fooling the people”…he doesn’t even realize that he’s the one being fooled by the neoconservatives. I bet he’s one of those “birthers” and believes all of the rhetoric coming from the Rebublican candidates regarding their tax cut plans.

  6. Dianrib March 3, 2012

    Lets set the record straight The Bush family oil ( dynasty ) are very close to Saudi Royals. They came to his TX ranch many times and were hugged and greeted warmly. Bush family has made many millions off that cozy relationship . GOP sure knows how to revise history .GOP loyal fans buy it lock stock and barrel with the ‘ help ‘ of Fox, Beck Hannity & GOP stalling ,blocking ,filibustering congress who gave Bush all he ever asked for from 2000-2006..Long failed Iraq war based on lies- that wasted lives & trillions, huge corp tax cuts, debt, ‘favors ‘
    for Wall ST, aka The Robber Barons of the 21 ST Century .
    The Fed boys like Alan Greenspan and all his Goldman Sachs alumni pushed US into 2008 crash / insolvency / edge of deep depression. After which they “REWARD ”
    Goldman Sachs Chase, B o A with zero interest loans .Taxpayers even paid 100 cents on the dollar for their worthless “JUNK’ that they legally labeled TRIPLE AAA. If you Vote GOP again . You need you head examined. I am a recovered GOP voter

  7. uru_grace12 March 4, 2012

    My eys have seen my eyes given the GOP LIES against Barack Obama. The insults have become outrageous and what had never happened to other presidents are happening to Obama. I only pity Romeny who had been fooled twice and again and again. What he has refused to acknowledge is that the GOPs looked round and did not know how to make money in this election that is why they lied to him and he is going about fulling himself and enriching the GOPs. They know how smart Obama is and the real republican candidates know they cannot beat Obama so they refused to run. Rumney is really creating fun. Looking at him on the stage campaigning you will see what Nigerians call AGBERO dats a tout. People that load transport vehicles. They push passengers into the vehicle and do not care the viability of the vehicle to make the journey. They collect their commission and the rest belong to the passenger whether the vehicle reaches the destination or not. This is case of the rpublican’s GOP and Romney. Santorium and Gingrinch, claiming to be conservatives, how much of their Bible do they know. My confidence is that God Almighty is watching over United States. He still values the plea of the founding fathers when they pleaded with God to watch over America and engraved on the money of this nation “IN GOD WE TRUST”. An God is also looking at the fact that this country aligns with Israel. God has always helped any country that concours with Israel. We are praying for this country. Bro Obama carry go. God will not allow you to be disgraced. You are going the second time. God will double my vote for you and that of my family to declear you a winner. I thank God for your courage. You will make it. Commit is to God everyday and trust only on him keep you.
    All the confusion the fox news is creating in this nation has come to God’s attention. They will reap their rewards. Thank you MSNBC for always letting us know the truth. God bless Obama, God bless MSNBC, God bless all that advicing Obama,God bless United State of America. We are praying. America is in safe hands of the Almighty God of Israel

  8. ladyj March 4, 2012

    Sleipner I agree with you most hardly. And if the article is correct no wonder I did not support it. I haven’t seen anything in writing about all of the jobs it will create and if we will get any of the oil. Until I see it in writing that it will create all of those jobs and we will get the oil ourselves. All of these Republican and a few democrats are for the pipeline, they better step back and look at it.

  9. rustacus21 March 7, 2012

    … it’s amazing they can face themselves in the mirror, lying not only to themselves, but to an unsophisticated, ignorant Conservative American voter, LYING straight thru their teeth, that tar sands (oil) is the answer to our energy problems! Knowing nothing, caring even less, about the chemistry of this ‘tar sands’ crap, people would think the rash of nation-wide pipeline ruptures these last few years are purely incidental or the result of ‘aging infrastructure’, instead of the thick tar sands, w/the consistancy of mud or quicksand, being also the absolute dirtiest of all forms of petroleum (as far as we know to date) & signals the proverbial “scrapping the bottom of the barrel” of world-wide petroleum reserves – as desperation has driven civilization to THIS?!!? It’s not a great place to be, especially since we rely on it so heavily for transportation, among many other uses, meaning the ‘exclusive’ petroleum confederacy will allocate jobs at its discretion, while the renewable fuel industry, w/its potential multi-million-plus new jobs yearly, goes untapped & underutilized. One need not be Progressive nor Liberal to see the logic in getting off petroleum as an energy source when it has so many other (surf boards, heart valves, lipstick, skis, cortisone, ink, toothpaste, etc…) uses. Burning it, therefore, is pretty insane, when hemp (which can be easily genetically ‘modified’ to produce NO seeds & therefore, a benign version that can’t be smoked or utilized in the underground economy!!!), which needs no water (unlike corn, switchgrass, etc.) & grows uncontrollably, is available in massive abundance, as a petroleum substitute!!! Y Liberal/Progressives aren’t fighting for a cleaner environment – on this basis ALONE, is bewildering, but if we remain hostages of the fossil fuel industry for much longer, we’ll run out of clean oxygen, water & soil b4 we run out of petroleum!

  10. Jim Hengstebeck March 8, 2012

    Want to do something about jobs? Seek to do something about a more equitable distribution of wealth. That will do more to promote growth than the pipeline in the long run. The pipeline will, of course,brighten the future outlook for environmental clean up specialists. Maybe that’s the job growth the proponents are talking about.

  11. rustacus21 March 9, 2012

    … who will benefit – construction & oil companies. 1 is short-term (construction). The other is selective (employing ONLY those already EMPLOYED in the industry). The ‘lunacy’ of ‘creating’ an environmental, as well as an ECONOMIC disaster (just to ‘clean it up!??!) is typical right-wing Conservative thinking, which, after 31 years, is looking more & more catastrophic for American, underdeveloped nations & environmental (natural systems – planet-wide) interests, w/each passing day. This election should be a referendum on the leadership of President Obama. There’s no way he can loose to Romney – unless he TRIES to!!! If his policies of the 2nd term are no better than the 1st (term), he should be impeached, for continuing to embrace Conservative policies, which have proven disasterous for all (including the environment) but the rich & corporations! Waiting for ‘change’ that is inevitable – 4 another 4 years is unacceptable. Of course a Conservative being in the W.H. in ’08 would have been a disaster. What we got instead, tho not what was expected, was at least an improvement. But w/the Clinton administration as the ‘perfect’ model/mentor, how do U NOT want to emulate success? Fossil fuels a fast becoming a thing of the past. It makes more than good sense to formulate their replacements NOW! In the words of MANY great American philosophers, ‘…elections DO have consequences…’ … & all the better if from TRUE Liberal/Progressive initiatives…


Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.