Fact Check: Keystone Pipeline and Jobs

October 29, 2021

Above: Creative use for abandoned pipelines.

In yesterday’s Oversight Committee hearing (“Oil’s Tobacco moment”) Republican members repeated over and over a familiar talking point – that President Biden’s cancellation of the Keystone Pipeline cost “11,000 jobs”.

Here’s a fact check.

Austin American-Statesman:

A Facebook post: Says that “By revoking the Keystone pipeline permit, Biden is destroying 11,000 jobs.”

PolitiFact’s ruling: Half True

Here’s why: President Joe Biden spent his first day in the White House signing a spate of executive orders aimed at undoing the policies of the Trump administration. One of them sparked outrage on Facebook over its effect on American jobs.

On Jan. 20, Biden signed an order that revoked the permit for the construction of the Keystone XL pipeline. In a Facebook post published the same day, one user said the move would cost thousands of jobs.

“By revoking the Keystone pipeline permit, Biden is destroying 11,000 jobs and roughly $2 billion in wages,” the post says. “Democrats couldn’t even get through Day 1 without killing jobs for middle class Americans.”

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. 

We’ve seen several similar posts offer other figures for how many jobs were lost as a result of Biden’s executive order, ranging from 12,000 to 83,000. So we wanted to take a closer look.

TC Energy Corp., the Canadian company that owns the Keystone XL pipeline with the Alberta government, has said more than 1,000 people are out of work because of Biden’s executive order. The 11,000 and $2 billion figures cited in the Facebook post are estimates published by the company, but most of the jobs would be temporary.

We reached out to the user who published the post for their evidence, but we didn’t hear back.

What Biden’s order does

The Keystone XL pipeline is an international project years in the making. Without support from the U.S. government, it’s effectively halted.

The 875-mile pipeline would carry a heavy crude oil mixture from Western Canada to Steele City, Neb., where it would connect with another leg stretching to Gulf Coast refineries.

Biden’s order revokes the permit that was granted March 29, 2019, by then-President Donald Trump on the grounds that it is harmful to the environment.

While an 11-volume State Department report on the Keystone XL pipeline found in 2014 that it would not significantly contribute to carbon pollution, critics say the project threatens Alberta’s rivers and forests. And the project has become a symbol for the political debate over fossil fuels. 

The Obama-era State Department had denied TC Energy’s request for a permit in 2015. Trump revived hopes for the project once he took office, ultimately approving it with an executive order. Construction began in April 2020, but that same month, a federal court said that the project had to go through a full endangered species review. TC Energy appealed the ruling, but the Supreme Court upheld it in July.

Before Biden signed his executive order, only a 1.2-mile section of the pipeline had been completed in Montana near the U.S.-Canada border.

Cornell University Global Labor Institute:

  • »  The industry’s US jobs claims are linked to a $7 billion KXL project budget. However, the budget for KXL that will have a bearing on US jobs figures is dramatically lower—only around $3 to $4 billion. A lower project budget means fewer jobs.
  • »  The project will create no more than 2,500-4,650 temporary direct construction jobs for two years, according to TransCanada’s own data supplied to the State Department.
  • »  The company’s claim that KXL will create 20,000 direct construction and manufacturing jobs in the U.S is not substantiated.
  • »  There is strong evidence to suggest that a large portion of the primary material input for KXL—steel pipe—will not even be produced in the United States. A substantial amount of pipe has already been manufactured in advance of pipeline permit issuance.
  • »  The industry’s claim that KXL will create 119,000 total jobs (direct, indirect, and induced) is based on a flawed and poorly documented study commissioned by TransCanada (The Perryman Group study). Perryman wrongly includes over $1 billion in spending and over 10,000 person-years of employment for a section of the Keystone project in Kansas and Oklahoma that is not part of KXL and has already been built.
  • »  KXL will not be a major source of US jobs, nor will it play any substantial role at
    all in putting Americans back to work. Even if the Perryman figures were accurate, and all of the workers for the next phase of the project were hired immediately, the US seasonally adjusted unemployment rate would remain at 9.1%—exactly where it is now.
  • »  KXL will divert Tar Sands oil now supplying Midwest refineries, so it can be sold at higher prices to the Gulf Coast and export markets. As a result, consumers in the Midwest could be paying 10 to 20 cents more per gallon for gasoline and diesel fuel. These additional costs (estimated to total $2–4 billion) will suppress other spending and will therefore cost jobs.
  • »  Pipeline spills incur costs and therefore kill jobs. Clean-up operations and permanent pipeline spill damage will divert public and private funds away from productive economic activity. In 2010 US pipeline spills and explosions killed 22 people, released over 170,000 barrels of petroleum into the environment, and caused $1 billion dollars worth of damage in the United States.
  • »  Rising carbon emissions and other pollutants from the heavy crude transported by Keystone XL will also incur increased health care costs. Emissions also increase both the risk and costs of further climate instability.
  • »  By helping to lock in US dependence on fossil fuels, Keystone XL will impede progress toward green and sustainable economic renewal and will have a chilling effect on green investments and green jobs creation. The green economy has already generated 2.7 million jobs in the US and could generate many more.

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