Pros and cons of the Keystone XL pipeline project

As protestors attempt to derail approval for the expansion of a massive cross-border oil pipeline, the Canadian government continues to lobby American lawmakers to move forward with the controversial Keystone XL pipeline project.

The $7 billion proposed pipeline expansion from Calgary-based TransCanada Corp. would move approximately 700,000 barrels per day of Canadian oilsands bitumen from Hardisty, Alberta southeast through Saskatchewan and Manitoba, over 2,600 km through six U.S. states before it finally ends up at a refinery hub in Port Arthur, Texas.

Supporters tout the economic and political benefits of the cross-border energy partnership. On the flip side, fierce opponents of the project, including labour unions and environmental groups, dispute its merits while purporting the negative economic and environmental impact if the project is approved.

PROS: Jobs and money 

Prime Minister Stephen Harper: Touts the economic and political benefits of a stable source of oil for Canadian and American energy markets. Calling the pipeline approval a “no-brainer,” Harper is confident construction will move ahead. 

“The number of jobs that would be created on both sides of the border is simply enormous,” the prime minister has said. Harper also speaks of the value of a democratic, conflict-free U.S.-Canada energy partnership, especially when compared to volatile energy producing nations in the Middle East. 

He says Canada would not “use oil or energy projects as strategic resources to achieve… foreign policy or political ends.” 

Canadian economy: The Alberta oilsands are responsible for over 140,000 Canadian jobs, a number that stands to grow to almost half a million jobs after project completion, according to Natural Resources Minister Joe Oliver. Canada is already the largest supplier of energy to the United States. Citing the public’s interest and long-term strategic Canadian energy market growth, the National Energy Board approved the Canadian portion of the project in March 2010.

U.S. economy: An independent economic study by the U.S. economic and financial analysts, the Perryman Group, estimates more than 50,000 full-time construction and spin-off jobs (employed for at least one year) would be created in Texas. The study was commissioned by TransCanada Corp.
The study estimates a permanent increase in stable oil supplies would add more than 250,000 permanent jobs for U.S. workers and more than US$100 billion in annual total expenditures to the U.S. economy. 

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In late August, the U.S. State Department’s environmental analysis concluded there was no indication the expansion project would spur further oilsands production or pose any significant risk to the six U.S. states the pipeline would cut through. 

Big Oil companies: Boast thousands of jobs created and millions of dollars in tax revenue would be generated by increased oilsands activity. Within days of receiving expansion approval, TransCanada Corp. would start to put 20,000 Americans to work on construction, according to estimates by the Perryman Group. 

CONS: Impact on the environment and jobs 

Environment: Environmental groups continue to protest further development of what they refer to as the “very devastating and very toxic tarsands industry.” Canada’s tarsands are approximately the size of Florida, containing 175 billion barrels of obtainable oil reserves. The actual estimate of what lies deep in the sands is actually closer to two trillion barrels, eight times the amount of oil reserves in Saudi Arabia.

Scientists, activists at Greenpeace Canada, the Council of Canadians and a host of other environmental and civil society leaders, including Canadian and U.S. celebrities, say the tarsands produce excessive amounts of greenhouse gases, diminish air quality, destroy natural habitats for wildlife and contaminate underground and surface water supplies.

According to Greenpeace, over 4 million hectares of Canada’s Boreal Forest are under threat of being clearcut so tar can be accessed underground. 

Oil spills along the pipeline’s vast route are a very real threat. TransCanada’s other Keystone pipeline, which delivers oil to the U.S. Midwest, has experienced 14 spills, including the latest event, a spill at a North Dakota pipeline pumping station in May 2011. 

“The Keystone pipeline is an act of aggression to the plants, wildlife and people who live in its path,” said Melina Laboucan-Massimo, a climate and energy campaigner with Greenpeace Canada. Other critics argue that America’s reliance on ‘secure’ non-renewable
resources from Canada does little to break bad consumption habits in
North America, including diminishing the motivation to choose
fuel-efficient vehicles or commercializing renewable energy
technologies.

Jobs: Since 2009, the Communications, Energy and Paperworkers Union of Canada has opposed the project, saying only Americans stand to benefit. “They get the jobs and we end up with the environmental mess that’s left over,” said CEP president Dave Coles last week. 

“The pipeline will create environmental destruction, take potential upgrading and refining jobs away from Canadians, and put our country’s energy security at risk,” he said.
Gil McGowan, President of the Alberta Federation of Labour, says Canadian politicians have become “little more than salespeople for a pipeline company” that would help add thousands of jobs in the U.S. but little more than a dozen permanent jobs in Canada.

“Once the construction is complete, all we are going to be left with is a pipeline sucking up our resources south of the border, and no jobs for future generations,” McGowan told reporters at an Ottawa news conference last week. 

Construction jobs are temporary and not all jobs created by the pipeline construction would be new jobs, with many going to existing Keystone employees and contractors. The U.S. State Department acknowledges this, saying “there would be temporary, positive socioeconomic impacts as a result of local employment, taxes on worker income, spending by construction workers and spending on construction goods and services,” but their job estimates are much lower than TransCanada’s estimate, with only about 5,000 to 6,000 construction workers, including existing Keystone staff and environmental inspection officials.

Economy: “The Americans will get the jobs and Albertans, Canadians will get the pollution,” said CEP Union president Dave Coles. “It is wrong-headed for the economy of Canada.” Coles is referring to the lost jobs and revenue from processing and refining Alberta’s bitumen in Canada and then sending it down the pipe. As it stands now, the proposed plan would see bitumen upgrading and refining jobs created in the U.S., not Canada. Coles and other labour unions want to see the refining jobs stay in Canada. 

There’s speculation that Canada stands to lose big money by sending Alberta’s bitumen for refining in the U.S. Once there, it can be processed into finished fuel, plastics, chemicals and other materials for sale back to Canada and around the world.

“What is really going to go down that pipeline are Canadian jobs. And forgone capital that belongs to our children and grandchildren,” writes federal NDP leadership frontrunner Brian Topp in an op-ed article in The Globe and Mail last week. 

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With files from The Canadian Press