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The Keystone XL Pipeline: Facts and Fairytales

Gemini previously lived almost smack-dab in the middle of Oklahoma and was a firsthand witness to how oil companies operate.

The Keystone Pipeline System is an oil pipeline composed of several sections. The Keystone Pipeline (Phase 1) and the Keystone-Cushing Extension (Phase 2) are already in place and operational. The Keystone XL Pipeline would be composed of two new segments: one extending the pipeline from Cushing, OK to Port Arthur and Houston, TX (renamed the “Gulf Coast Project” due to negative media attention and operational as of January 22, 2014) and the other traversing the upper Midwest from Steele City, NE, eventually crossing the border into Canada.

Keystone XL Pipeline

TransCanada wants to build the Keystone XL Pipeline from Hardisty, Alberta through the center of America rather than to Canada’s west coast simply because it would be easier for them. Although the distance to its west coast is shorter, that route is plagued with a multitude of problems as it would cross the land of dozens of Native American tribes who are vehemently opposed to it. But the Keystone XL Pipeline’s route through America will directly affect a fairly large portion of the United States, and it is critical that the citizens of this country separate the facts from the fiction before it is allowed to do so.

It is surprising how many articles regarding the Keystone XL Pipeline are so misleading with much of the mainstream media blatantly disregarding the facts surrounding the project. Perhaps not too surprising as TransCanada, the Calgary, Alberta based energy company building the Keystone XL Pipeline, has made a concerted effort to create a campaign of factual distortions, coercion, and fraud in its single minded trek towards enormous profits, its website created specifically to address their pipeline being a "spin" masterpiece.

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Disgusting, although not surprising either, is how many politicians have willingly picked up the company’s lies and continued to expand the public’s ignorance. It’s time for this country to put aside the fantasy. Fairy tales are fine so long as one doesn’t believe in them.

All the necessary environmental studies regarding the Keystone XL Pipeline have been completed and approved. What is the hold up?

FACT • However . . .

Drafts for the Initial environmental studies were being released as early as mid-2010 by State Department staffers eager to rubber stamp the project and push it through without conducting thorough reviews. They may have accomplished this had the BP oil spill and then leaks in Keystone Pipeline (Phase 1) not occurred. Once these failures happened, the Keystone XL Pipeline became the center of a storm of controversy. Under this scrutiny, it was revealed that the initial studies should be deemed inadmissible for numerous reasons including: inexperienced and unqualified staffers were held responsible for gathering data, study requirements did not include the environmental scope necessary and that one staff member had questionable ties to TransCanada itself. [6]

The most recent and supposed final report from the State Department has proven to be no more viable than the previous attempts. Released January 31, 2014, the report downplays the environmental risks involved in the project and, considering the circumstances, this should come as no surprise. TransCanada itself recommended the firm Environmental Resources Management (ERM) as the consultant to review the State’s report and paid ERM for that assessment – a blatant conflict of interest essentially rendering ERM’s report a moot point. [11] The Office of the Inspector General’s review of the matter concluded that while ERM did follow the guidelines required for the contractor selection process, those guidelines “could be improved” – in other words, until those guidelines are changed, dirty deals will remain business as usual. Attention has now been turned to the Government Accountability Office which will begin its own review of ERM’s environmental report.

The Keystone XL Pipeline will bring a $7 billion dollar project to the U.S.

FAIRY TALE • $7 billion dollars may be the total budget number for this project but only a portion of this figure will ever reach the U.S. Part of this budget has already been spent on the first two phases of the Keystone Pipeline and on Canada’s side of the border and only $3 to $4 billion will be spent in the U.S. on the last two segments. [1,2]

The Keystone XL Pipeline will create tens if not hundreds of thousands of jobs.

FAIRY TALE • Although politicians cannot seem to stop endlessly repeating this lie. And assuming TransCanada believes its own website, neither can the company itself.

According to the State Department, the Keystone XL will create approximately 2,500 to 4,650 temporary jobs during construction. This data comes directly from TransCanada itself. Additional data, also from TransCanada, states that there will only be “hundreds” of permanent jobs produced, not thousands. [1] Unfortunately, a study done by the State Department in March 2013 found that not even that will be true. The study revealed that it expects the project to create a whopping 35 permanent jobs and 15 temporary jobs upon completion. [12]

The project does not even produce a large number of spin-off jobs (employment created around the construction of the Pipeline such as truck drivers, etc.) although figures as high as 500,000 have been promised. These incorrect and highly inflated numbers are believed to have been extrapolated from a report, also paid for by TransCanada, that stated that the Pipeline would create over 119,000 “person-years” of work. A person-year is the amount of work that would keep a person employed for one year – which does not translate into 119,000 “jobs”. [1,2]

The Keystone XL Pipeline will actually kill more jobs than it will create.

FACT • A study completed by the Cornell University’s world-renowned Global Labor Institute (GLI), the only independent study done on this project, determined that the Keystone XL Pipeline will not only create less jobs than TransCanada claims, but also actually destroy jobs in the following ways:

  • A rise in fuel prices in the Midwest will cancel the positive effect of the few jobs actually created by the pipeline. This increase in prices will affect families and the agriculture and transportation industries. [1]
  • The oil spills that will invariably happen may create some temporary clean up jobs but they will be outweighed by the direct loss of many more existing permanent ones. [1] It is estimated that job losses from the BP oil spill range from the tens of thousands to possibly one million over the next five years. [9]
  • The diversion of moneys into the Keystone XL Pipeline will prevent that investment from forwarding the green economy which has already created 2.7 million jobs. Long term, the move to more environmentally sustainable energies will create tens if not hundreds of thousands of additional new jobs. [1]

The Keystone XL Pipeline will raise the cost of gas for people in the Midwest.

FACT • Oil that is currently being held in Midwest refineries will be diverted by the pipeline to be sold for a higher profit overseas. The reduction in supply could increase the cost of gasoline per gallon 10 to 20 cents in this region, 15 states to be exact. [1] Other sources claim this increase could be as high as 20 to 40 cents per gallon. [12]

The steel pipes needed for the Keystone XL Pipeline will be produced in the United States and are an example of a spin-off job created by the project.

FAIRY TALE • Based upon the construction of the previous phases of the pipeline by TransCanada, half if not more of the steel and pipe to be used in the Keystone XL Pipeline will be imported from the Indian company, Welspun Corp Limited, and the Russian company, Evraz, which has mills in Canada. Only the final processing for a portion of this pipe will be done at Welspun’s Arkansas plant. Instead of giving the ailing steel industry here in the United States a boost, it is cheaper for TransCanada to buy foreign made.