Industry and government estimates of Keystone XL jobs are unreliable, according to independent study.
Have you heard that the Keystone XL pipeline would create 20,000 jobs? If so, you might have read it in a news article and assumed that it came from trustworthy, independent research. But the truth is a bit more complicated.
I’ve already mentioned that TransCanada’s job figures are inflated–but now we have even more evidence. The media has cooperatively echoed TransCanada’s estimates: 13,000 direct construction jobs and 7,000 manufacturing jobs. But the TransCanada chief executive himself, Russ Girling, admitted to the Washington Post that the first number was misleading:
Girling said Friday that the 13,000 figure was “one person, one year,” meaning that if the construction jobs lasted two years, the number of people employed in each of the two years would be 6,500. That brings the company’s number closer to the State Department’s; State says the project would create 5,000 to 6,000 construction jobs, a figure that was calculated by its contractor Cardno Entrix.
Cardno Entrix also handled the Keystone XL environmental review. Why is this important? Because Cardno Entrix lists TransCanada as a “major client.” It turns out that TransCanada handpicked the firm for the State Department. Then, by pure coincidence, the “State” research sounded just like an advertisement for the pipeline: thousands of Keystone XL jobs and “limited adverse environmental impacts.” (See the NYT story for details.)
Made in Canada
Now what about the 7,000 manufacturing jobs? To answer, that, we’ll return to the WashPo article:
As for the 7,000 indirect supply chain jobs, the $1.9 billion already spent by TransCanada would reduce the number of jobs that would be created in the future. The Brixton Group, a firm working with opponents of the project, has argued that many of the indirect supply jobs would be outside the United States because about $1.7 billion worth of steel will be purchased from a Russian-owned mill in Canada.
TransCanada, of course, insists that most of the pipeline would be made in Arkansas. On the other hand, DeSmogBlog notes,
TransCanada has already signed contracts for nearly 50 percent of the steel pipe for the project. A Russian company, Evraz, will manufacture roughly 40 percent in Canadian mills, and an Indian company, Welspun, is likely to produce the rest.
An independent analysis
You might be wondering if there are any Keystone XL jobs reports not funded by TransCanada. As a matter of fact, Cornell University’s Global Labor Institute has just what you’re looking for. Here are some key points from the study:
- The construction of KXL will create far fewer jobs in the US than its proponents have claimed and may actually destroy more jobs than it generates.
- The industry’s US job claims, and even the State Department’s analysis, 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.
- The claim that KXL will create 7,000 manufacturing jobs in the US is unsubstantiated. 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 US
- The industry’s job projections fail to consider the large number of jobs that could be lost by construction of KXL. This includes jobs lost due to consumers in the Midwest paying 10 to 20 cents more per gallon of gasoline and diesel fuel. These additional costs ($2 to $4 billion) will suppress other spending and cost jobs.