You may have heard about the TransCanada Keystone XL pipeline project; the application for the expansion project has been pending since 2008 and lobbying both for and against the project culminated in the last 12 months. The project proposes to build a 1700 mile, 36 inch wide pipeline from Canada to Texas in order to carry a form of dirty crude oil that is mined in Canada's Tar Sands.
But with all of the rhetoric and distortion of facts, does anyone really know what the project will and will not do for Americans? I would like to answer these questions for you and then ask you to email
this pre-composed message opposing the Keystone XL pipeline.
If you're already up to speed on this issue, read no further and simply email your legislators with
this pre-written email.
Understanding The Market For Crude Oil
To understand the implications of the pipeline project, it is first important to understand the larger picture of our global energy market.
- Crude Oil (or petroleum) is the natural resource from which gasoline and other fuels are made.
- The U.S. Energy Information Administration (EIA) in this report and others like it found on eia.gov show that the only way to reduce crude oil prices is to reduce domestic consumption. The report compares the price of oil with and without additional domestic production, and the resulting difference is only 30 cents per barrel in 2030. You read that right; even with increased oil production domestically it only decreases the price of oil by 30 cents per barrel 18 years from now. This is because we are part of a global energy market where oil is a commodity, affected by the bidding of commodities traders on the future price of oil in the global market. Further, U.S. consumption makes up around 25% of the demand for crude oil and our own domestic production, even with the addition of offshore and other production, has a negligible impact on overall supply.
- According to the EIA, U.S. demand for oil has been declining since 2007.
With those basic facts about the global oil market and our domestic demand understood, understanding the claims by the proponents and opponents of the Keystone XL pipeline is much easier.
Claims By The Proponents And How They Are Misleading
TransCanada and other proponents of the pipeline advocate two major claims: that the pipeline will reduce the cost of oil domestically by increasing energy independence, and it will increase jobs via the building of the pipeline and other "spin-off" jobs. However, these claims are misleading at best and intentionally crooked at worst.
The claim that the pipeline will decrease the cost of crude oil is in complete conflict with the findings of the EIA. Further,
the Keystone XL pipeline is an export pipeline; the oil is not intended for domestic consumption. After the oil is refined in Texas it will be
exported, tax free, to other countries willing to pay higher prices for the fuel. In fact, fuel was the
top export in the U.S. in 2011. This market manipulation by TransCanada will
actually increase fuel prices on U.S. farmers and consumers in the mid-west.
TransCanada's second claim that the pipeline will be a large boost to job creation in the U.S. economy is also a bit misleading. It claims that building the pipeline will
immediately employ 13,000 jobs in construction. TransCanada then estimates that 7,000 manufacturing jobs would be created due to the pipeline and 118,000 other spin-off jobs, yet no information or details are given as to where or how they came up with these numbers. Opponents correctly note that the only guaranteed jobs from the project, the construction jobs, are temporary. Opponents further argue that both the construction and spin-off jobs are
grossly exaggerated. For more on the opponents' arguments, see the Nebraska Wildlife Foundation's
factsheet or the Tar Sands Action Organization's
factsheet here.
Forgetting the best arguments of each side, let's assume TransCanada is accurately predicting their need for construction workers to build the pipeline. That's 13,000 temporary jobs. Remember that it took
243,000 new jobs in one month to decrease our unemployment rate by .2%. 13,000 jobs is not even a drop in the bucket, and let's remember, the jobs are only temporary. And the 118,000 spin-off jobs that TransCanada alludes to are based on what? Well, we don't know because TransCanada doesn't say. I propose they should at least provide some persuasive details about the spin-off jobs they argue will be created.
Why The Pipeline Is A Shady Deal For Americans
When one looks at the proponents' arguments against the facts, it is hard to imagine why we would want to risk serious environmental damage so that TransCanada can increase profits. Especially when it comes at the risk of increased oil prices and oil spills for Americans. In fact, TransCanada's first pipeline which extends to Oklahoma and is only one year old has already suffered from a
500 barrel spill. While that is no BP Gulf disaster, it demonstrates the vulnerability of the process and the potential for more serious spills.
All of this information leads me, and hopefully you as well, to conclude that there is no good reason for us to take serious environmental risks and increased oil prices so that a Canadian company can increase it profits, tax free. If you agree, take 30 seconds and
send this email.