keystone pipeLIES: KXL will lower gas prices

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One of the reasons supporters of the keystone pipeline back the project is because they believe that it will bring lower gas prices. Americans seem to care more about saving a buck than they do about their health and the environment. But the truth is gas is a global commodity and its price is set by global markets. It rises and falls based on all sorts of factors, including current demand, demand forecasts, global economic conditions, and international events that affect distribution channels. Local supply fluctuations rarely have any but the tiniest impact on gas prices. New pipelines carrying tar-sands oil might extend the lifespan of climate-wrecking fossil fuels by a few years, but they won’t bring down the price at the gas pump.

In fact, in the Midwest, Keystone XL might actually increase the price per gallon. according to researchers at the Cornell University Global Labor Institute, TransCanada, the proposed manufacturers of the pipeline, admitted that “KXL will increase the price of heavy crude oil in the Midwest by almost $2 to $4 billion annually.” The Cornell study explains that this will happen as a result of “diverting major volumes of Tar Sands oil now supplying the Midwest refineries, so it can be sold at higher prices to the Gulf Coast and export markets.”

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Fox expects us to to believe that building KXL could result in gas prices dropping “20 to 30 cents a gallon”; indeed, Asman responds to his claim by saying that the Gulf executive is “on the retail side of the gas business, so you know” how gas prices come about.

But the Cornell University study estimates nearly the exact opposite of the claim, estimating that building the KXL pipeline could increase domestic gas and diesel fuel prices in some states by between “30 to 40 cents more per gallon”

Gasoline is a significant cost for most Americans, and especially for those with lower incomes and residing in rural areas. Also, refined oil products like gasoline and diesel are very widely used throughout the economy especially in agriculture and commercial transportation. So higher fuel prices due to KXL would ripple through the economy and impact a very broad range of people and businesses.

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Breaking down the claims made by pro-pipeline entities

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Without exception, all arguments in favor of the installment of the pipeline deal with economic benefit. Keystone XL has been labeled as a domestic solution that would curb our dependence on the Middle East and other oil-producing nations, bring thousands of jobs to low-income areas with high unemployment and rake in billions of dollars in revenue. Sounds like a miracle cure, right?

Before we answer that, let’s look at the facts. TransCanada is the major backing organization behind the project. They’ve made some huge claims about job creation, which if true, could have a substantially positive affect on US employment. What they’ve said:

  • “The project would support more than 42,000 direct and indirect jobs nationwide.”
  • “The project is expected to create over seven million hours of labor.”

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Okay, so we’ve seen a few statements from them. But there are a lot of numbers floating around from a lot of different sources. To get what we hope is an objective breakdown of the facts, we turn to a study conducted by Cornell University and the Global Labor Institute. Together, the two entities looked into TransCanada and other pro-Keystone corporations and organizations’ claims about job creation. What they found:

  • The jobs counted are not all new jobs. They include existing Keystone employees and contractors.
  • Only 10-15% of the workforce would be hired locally.”
  • “Estimates do not consider the jobs that might be destroyed as a result of the pipeline and the expanded use of Tar Sands oil.” There have already been 14 oil spills during Phase 1 of construction. Spills threaten water sources that are vital to the livelihoods of farmers, ranchers and some tourism industries.

It never hurts to pull from multiple sources. The US State Department conducted a comprehensive investigation into the pipeline project. What they determined:

  • Construction supports about 42,100 jobs for the 2-year construction period. Per their definition, “A job consists of one position that is filled for one year.” Also important, “the termsupport means jobs ranging from new jobs to the continuity of existing jobs in current or new locations” (Sec. 4.3.3) Jobs would be temporary.
  • “Once the proposed Project enters service, operations would require approximately 50 total employees in the United States: 35 permanent employees and 15 temporary contractors.” (Sec. 4.3.4)Only about 50 persons would remain employed after the two-year construction period is complete.
  • Building off the above finding, “This small number would result in negligible impacts on population, housing, and public services in the proposed Project area” (Sec. 4.3.4) The people who would migrate to the site to work on the pipeline would be left jobless, creating burdens for the project area after the pipeline is completed.

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When you hold up TransCanada’s claims next to actual findings, the discrepancies are apparent. The numbers that do match up, like the 42,000 related jobs claim aren’t put into the context or applied to the timeline of the actual project. Bottom line is, the claims made by TransCanada and other pro-pipeline entities don’t consider a realistic application of these claims. Keystone XL’s construction, as planned, would last only 2 years. With the end of the construction would come the end of nearly all the jobs it put in place. It’s a temporary fix, a band-aid to cover a wound that really needs stitching, not to mention some serious care post-trauma.