Pipe Dreams

Last week, an acquaintance of mine wrote on Facebook, “The stupidity of this decision [President Obama’s temporary rejection of a Keystone XL Pipeline permit, citing a need for further study] continues to be hard to come to grips with. Yet another bonehead choice by one of our very worst presidents.”

Was Obama’s rejection of a 1,700-mile pipeline meandering from Alberta through America’s Heartland to the Gulf Coast really bone-headed? According to the facts, far from it.

Republicans tout that the tar sands oil pipeline would create tens of thousands of jobs and increase America’s energy security. The former point is grossly exaggerated, as the pipeline would create only about 2,500 – 4,650 jobs, according to Cornell’s Global Labor Institute. The GLI also stated that the manufacture of 800,000 tons of carbon steel pipe for the project has been contracted to Indian and Russian companies, further undermining the pipeline’s effect on American job creation. Unfortunately, it seems Republicans are still clinging to The Perryman Group’s erroneous estimate of 118,935 person-years of employment being added to the U.S. economy over the pipeline’s two-year construction, which economists have blasted to smithereens. Maybe The Perryman Group inflated its numbers to reflect jobs created to clean up oil-spill disasters…

Secondly, claiming the pipeline will boost America’s energy security requires a rejection of basic economics. The Associate Press says America’s top export in 2011 was refined fuel, such as gasoline, diesel, and jet fuel. That isn’t going to change with the Keystone XL Pipeline. The price of TransCanada’s oil will be determined by the global demand for oil, and currently, developing countries in Asia and Latin America are demanding more oil as they build their infrastructure, so that is where American oil is going. Meanwhile, demand for oil in the U.S. has been falling since 2007.

Tar Sands Oil Mine

Finally, let’s not forget Keystone XL’s impact on the environment. NASA climatologist James Hansen said that if Alberta’s oil sands are tapped, “It is essentially game over” for reclaiming a stable climate. He said that coal emissions must be phased out by 2030 and fossil fuels in tar sands must remain in the ground (because their extraction is energy-intensive) if the world is to mitigate major climate change effects.

Clearly, the Keystone XL pipeline is not a good thing for America, nor the world. Its primary beneficiary is Big Oil.

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