Keystone XL Pipeline: How to go bust in 90 days


By Emily Johnson, Content Editor

President Obama is in a pretty tight spot right now.

Santa Ana political winds blow stronger with the approach of the fall election season, fanning the flames as major media stations compete to determine where the wildfire will break out first and how extensive damages could be.

With the economy slowly getting over the bad mortgage breakup, a growing international tension smoking up United Nations halls and the Obama administration’s wobbly health care reform policies just getting out of bed, it’s no far stretch to conclude that at least one fire is flaring somewhere behind the smoky haze.

With increased pressure, Neb. has made international headlines as the TransCanada Keystone XL project threatens to burst any day. While opinions echo loudly on all fronts, the facts are weighing in to reveal the project as a less-promising business horizon than it once may have seemed.

The issue was once seen as a local concern for farmers looking to stay in the black while maintaining land rights and environmentalists looking to protect the Sandhills environment, the Ogallala Aquifer and endangered local species. Nebraskans who have fallen on tough times and were eager for job opportunities become the project’s biggest supporters, joining TransCanada lobbyists who promised cheaper gas prices.

With the heels of both sides firmly planted in the Neb. topsoil, the battle has moved to the capitol and reached an all-time pressure point. Neb. is the key to the 1,700-mile pipeline needed to transport oil from Alberta, Canada, to the Texas Gulf Coast. But as the situation is assessed more deeply, the cons are rapidly out-weighing the pros and risking more than just potential domestic jobs.

The loudest argument for the completion of the pipeline is the utmost concern for Americans today, jobs. Proponents of the pipeline say that without the project, Americans could be out thousands of jobs that would otherwise be revitalizing the economy. House Speaker John Boehner told CBS that the decision threatens to “destroy 100,000 American jobs.”

Yet the jobs TransCanada allegedly would provide still remains up in the air. As many as 250,000 permanent jobs would be created, a far cry from the U.S. State Department’s 6,000 job estimate and the 500-1,400 jobs the Cornell University Global Labor Institute predicted, according to the U.S. Chamber of Commerce. More startling, the institute’s report said several of the fresh jobs would be offered overseas instead of within the United States.

Even less comforting is the date provided by TransCanada. A consulting firm hired by the company claimed in early Jan. that the pipeline would produce 20,000 jobs with 13,000 positions in construction and 7,000 in manufacturing. These numbers were presented in spite of the testimony of a company vice president last fall, who told CNN that the 20,000 positions created would be temporary and that the project would probably provide only hundreds of permanent jobs.

TransCanada also admitted its estimate counted “job years” spent on the project, not jobs. By the company’s determination, one man on the job for seven years equated to seven jobs – an argument that quickly has attracted criticism that the pipeline is deliberately overstating its benefits.

President Obama rejected the project proposal on Jan. 18, saying the decision to block construction was due to “the rushed and arbitrary deadline insisted on by Congressional Republicans.” A news release from the White House said the congressmen and women had “prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.”

This was in light of months of insistence by Congressional Republicans and Nebraska legislators to push the project through a three-month approval process. Meanwhile, several reports questioning TransCanada’s safety guidelines have surfaced. One University of Nebraska Lincoln report found the company’s 19-minute, worst-case scenario solution to be absurdly unrealistic and falling short of times the pipeline has leaked within the past year. Considering the difference of the TransCanada project’s use of increased pressure, higher temperatures and more corrosive oil, 19 minutes is a far cry from the 12-hour reaction a comparable pipeline spill clocked. The report surveys a historical data spanning 23 percent of spills TransCanada failed to include in its own reports, bringing the number of potential spills from 11 to 91 during the next 50 years.

TransCanada may have an army of lobbyists and congressional men and women on its side, but it has few friends outside of Washington. American farmers who previously contracted with oil companies have been fighting expensive legal contracts for years after discovering spoiled ground-water supplies and hidden company practices that spoiled their land use. Although most farmers can’t afford lobbyists and lawsuits, word of mouth has won the day – and the only thing TransCanada may get left with is a busted $7 billion dream.