Truth About Keystone XL

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(originally printed: April, 2011.)

Frequent readers of M.R.S. already know how I feel about the proposed “Keystone XL pipeline” and the absurd level of hyperbole from Conservatives regarding the supposed windfall of jobs it would produce along with its ability to bring down gas prices, while downplaying the environmental consequences. With the deep pockets of BigOil and oil tycoons like the Billionaire Koch Brothers flooding the airways with ads trying to convince the general public to support the pipeline (ask yourself “Why anyone would spend millions in TV ads and lobbying Congress to drive prices/profits DOWN?”), I was heartened for a long time by President Obama’s resistance to this disastrous proposed pipeline. But on March 22nd (2012), President Obama announced that he was caving in to pressure from The Right and would be “fast-tracking a portion of the Keystone pipeline extending it from Oklahoma to the Texas gulf”. (I apologize in advance if this report seems a bit rushed and not as well organized. I had hoped to do a more extensive report at a later date, but felt my hand was rushed with the presidents announcement.)

 

Myth #1: “1 million jobs”:

A flood of TV & radio ads are on the airwaves right now (UPDATE: you may have noticed the disappearance of this blatantly false ad) suggesting the pipeline would be a huge job creator:


API ad claiming Keystone “could create 1 million new jobs”.

 

“Could” create? Interestingly enough, when you checkout the link they cite at the end of their ad… “EnergyTomorrow.org”their own website contradicts this claim:


Only 500,000 jobs in 3 years (click to enlarge)

 

Every independent study estimating the number of jobs that might be created by this pipeline say the actual number is lower. FAR lover. Not even in the “hundreds of thousands”. The company that will actually build the pipeline, TransCanada says Keystone would create “20,000 direct jobs”, consisting of 13,000 construction jobs and 7,000 jobs making stuff like pump houses and the pipe itself. TransCanada also estimates a grand total of just “120,000 indirect jobs” added to local economies along the construction route. That’s roughly 15 percent of the total figure claimed in those ads. So where do they get “1 million jobs?” That’s spread out over 20 years. And it won’t take 20 years to construct the pipeline. The number of jobs they estimated refers to “person-years” of employment— a single job that lasts two years is counted twice! You read that right. Since the jobs are temporary, after two years, when that temp job ends and they are replaced (often by the same person) they count the same job again as a “new” job, even though the net job increase is ZERO.
 

(Update 3/1/2013: Reuters reports Keystone would create no more than 42,100 temporary construction jobs and just 35-50 permanent jobs.)

 
Probably the most damning proof that the number of jobs KXL might produce has been WILDLY exaggerated can be seen in this video of Fox “news” hosts gradually inflating the number of jobs from “5,000” to “over a million”, followed by TransCanada VP Robert Jones admitting the actual number would actually be closer to “just 1,000 jobs”:


To infinity, and beyond!

 

The significant number of jobs created by this pipeline would come from its actual construction. This is low-skill low-pay contract employment that at most would last only two years. The Washington Post “FactChecker” gives the “million jobs” claim “two Pinocchio’s” (out of four), finding the actual number of jobs closer to “13,000 construction jobs over two years.” (as a point of reference, the U.S. economy must create roughly 110,000 new jobs EVERY MONTH just to keep up with population growth.)

Tangential jobs, such as the mining of the steel or the making of the pipes would also not be a job creator. In 2012, TransAmerica assured skeptics that “75 percent of the pipe would be made in America.” Problem: “made in America” using steel imported from India (47%). 52% of the steel “left to be purchased” has been contracted to an American plant. Together, that accounts for 75% of all the steel. If 52% of the “remaining” steel (not already forged by “Welspring” of India) is to be made in the U.S., that means another 48% of the remaining steel will ALSO be sourced overseas. The pipe itself might be “Made in America”, but using mostly cheap imported steel.

TransCanada has already admitted that “$1.9 BILLION [sic: link says “million” in header but “Billion” in text) dollars worth of pipe and equipment has already been purchased“, meaning there aren’t that many future jobs left to be created by the purchase of additional pipe & equipment.
 

Myth #2: Energy Independence:

Republicans are astoundingly good at “catapulting the propaganda”. They are absolutely convinced that those Canadian Oilsands contain “100 years worth of oil” that could help reduce/eliminate our dependence on “foreign” oil (someone should point out to them that Canada is also a “foreign country”). And if we don’t have to buy all that oil from the Middle East, we can tell those countries to “go to Hell” and stop “bowing down to the Saudis”.

It is actually incredibly difficult to get accurate figures on how much oil can be extracted from the Canadian Oilsands/tarsands because no one really knows exactly how much “oil” there is. “Oil” is in quotes because the black tar saturating these sands is actually a chemical sludge called “bitumen”, which, when mixed with water and chemicals releases heavy black crude oil (more on that later). The area in question… an expanse of Canada’s Boreal Forest… covers 1.4 billion acres. The number of actual “barrels of oil per acre” depends both on the saturation (just how “oily” the soil is) and how deep into the ground the tar goes, but one study puts the number at “175 billion barrels of retrievable oil”. At our current usage rate of (if Wiki can be trusted) “20 million barrels per day”… if we never use more oil than we do today… that translates to just under 24 years worth of oil. Of course, we use more and more oil every year. One estimate claims an increase of 2 percent a year. I suck at math, so I’m not even going to attempt it, but I don’t see “100 to 300 years worth of oil” coming out of those tarsands. That’s a FAR cry from “energy independence”.

So first, the amount of oil from the tarsands is not enough to make us “self-sufficient” so that we don’t need to import any Middle Eastern oil even if we don’t export a single drop to the rest of the world. But we WILL be exporting that oil. Not just “some” or “a lot”, but MOST of it is intended for export. Six major exporters have laid claim to 76 percent (pdf) of the oil that is to be pumped through the KXL pipeline. The “heavy sour” crude one extracts from tarsand is not very good for producing light low-sulfur gasoline, but is just dandy for producing diesel like they use in Europe and South America. And since “petrol” sells for WAY more in Europe than gasoline does in the U.S., the oil companies are going where the money is. Ask yourself, “Why build a 2,000 mile pipeline through six states, bisecting the entire continental U.S. and risking a major aquifer, all the way to the Gulf of Mexico? Are there no closer refineries? Wouldn’t it be cheaper/safer just to build a (state of the art) refinery in Canada?” The reason the pipeline is going all the way to the Gulf is because THAT IS WHERE THE PORT IS for export to South America and Europe. Very little of this oil will ever find its way to American gas tanks. So much for “energy independence”. Which bring us to…
 

Myth #3: Lower gas prices:

There is currently a major lack of refining capacity in Europe and South America. That is why the tarsand oil is to be refined here in the U.S. (ibid above PDF). Presently, American refineries produce gasoline for use here in America and export to the rest of the world. But if you shift a portion of American refineries over from refining gasoline for us to refining diesel for export, that means the supply of gasoline will go DOWN not up… driving UP the price at the pump. The KXL is expected to carry roughly 1.1 million barrels a day. That translates to about 8% of our total refining capacity. That’s the equivalent of an 8% cut in the supply of gasoline. And if you think Speculators on Wall Street will stop after the price of oil rises just 8 percent, you haven’t been paying attention since 2003 (when the invasion of Iraq drove oil prices into orbit).

The Washington Post FactChecker also points out that “even if the pipeline were approved tomorrow, it wouldn’t carry it’s first barrel of oil” for another two years. So if gas prices were to fall at all (and they won’t), it won’t be from the “near $4/gallon” it is NOW but the “God-only-knows” price it will be two years from now.

ThinkProgress released a study this week (March 2012) that finds that in 36 years, they could find NO evidence that “increased drilling reduces gas prices”. If anything, looking at their graph, the exact opposite appears to be true, with gas prices typically increasing as production rises.

Keep in mind, unless you plan on SOCIALIZING the entire oil industry (like Venezuela), there’s NO WAY to insulate oil prices in the U.S. from the price set on the Open Market. So whatever the price is in the rest of the world, that’s how much that tarsands oil will go for… and gas prices accordingly. The amount of oil from the tarsands is not enough to glut the market and drive down prices, BUT EVEN IF IT WERE, since prices are set by the World Market, OPEC would simply cut production driving the price back up (something “Professor Newt” fails to take into account when promising “$2.50/gallon gas”.) So gas won’t be any cheaper either.
 

Myth #4 – Air Pollution is the only environmental issue:

If you wanted to design the dirtiest, least environmentally friendly way of obtaining oil, you couldn’t invent a worse source than tarsand. As noted above, tarsands oil is really only suitable for the production of high-sulfur diesel, the worst of all air-polluting fuels. Diesel fuel produces more Greenhouse gasses than gasoline when it is burned, making the high-sulfur diesel refined from the tarsands oil one giant “carbon bomb” that renowned NASA climatologist James Hansen said would spell “Game Over” for the environment.

But in addition to the air pollution and massive quantities of CO2, unlike conventional drilling, tarsand actually involves “open-pit strip-mining” and trucking billions of tons of oily soil to a “pumping station”. And you can’t pump “sludge” though a pipeline, so you must mix it with water. “Four barrels of water for every barrel of bitumen” (pdf report). That dirty toxic water is later separated from the oil upon refining where it is dumped into “tailing ponds”… a sea of toxic waste. And since you get TWO barrels of toxic waste for every ONE barrel of oil (ibid same report), that leaves you with a PERMANENT TOXIC WASTE DUMP OF TWICE THE AMOUNT OF OIL CREATED. So Europe gets 15 years worth of diesel and Texas gets giant disgusting lakes of toxic waste staring at us from now till eternity.


“Tailing pond”

 

Did you know that the “Keystone Pipeline” already exists? The proposed “Keystone XL” is a larger alternate pipeline replacing an existing 1,661 mile pipeline that currently extends as far South as Cushing, Oklahoma (the extension approved by President Obama mentioned at the top of this report will allow it to now reach the rest of the way to the Port of Houston and Port Arthur). The new… more direct route… into Nebraska that would take the pipeline thru some very environmentally sensitive areas and beneath the famed “Ogallala Aquifer”… the primary source of clean drinking water for as many as five states. The currently existing pipeline, when it was built, was predicted to leak (due to aging or unforeseen events) “once every seven years”. Instead, it LEAKED TWELVE TIMES LAST YEAR (its first year). Why? Because all that liquefied dirt being pushed through the pipeline under immense pressure SANDBLASTS the sides of the metal pipe 24/7/365, wearing it away until it leaks. On May 7th of last year (2011) near Millner, N.D., the pipeline spilled about 21,000 gallons of oil. So not only do you get giant lakes of toxic waste, you also get thick black oil spills as all that toxic sludge rips holes in our wonderful new pipeline.

And that thick black sludge doesn’t float on the surface where it can be mopped up with skimmer boats like we saw in the Gulf after the BP spill. No, this thick black sludge sinks to the bottom of the river and seeps back into the ground, making it next to impossible to clean up. This just keeps getting better & better.
 

And there you have it. Keystone WON’T “create hundreds of thousands of jobs”, WON’T “decrease our dependence on foreign oil”, WON’T bring down gas prices, but WILL produce an environmental disaster the likes of which you can’t begin to imagine.

President Obama, you should know by now that if you are doing this to please the Right, it won’t. Instead, they’ll use it as a weapon to prove that “they were right all along” and it took them fighting you on this issue to get you to see the error of your ways and “do what the people want.” They are ALREADY saying that the only reason you’re doing this is “because your approval ratings are down”.

Remember what George Bush said about “Fool me once”.

PS: Oh, and for any Right-Wingers reading this: Several sources for this article came from a Fox “news” report entitled “Six reasons Keystone XL was a bad deal all along.”

Part 2: Keystone XL: Not Just a Potential Environmental Disaster But An Economic One Too.
 


 
Three REAL ways to bring down gas prices quickly:

The GOP thinks it has found a winning issue when it comes to the infamous “Keystone XL Pipeline” (KXL for short). But even if you don’t believe their nonsense, simply ask yourself “why would the oil companies spend $100million dollars in advertising to do something that would drive prices (and their profits) DOWN?”

While Republicans are in hysterics over the number of “jobs that would be created” by the KXL, House Republicans threatened to block the Highway Transportation Bill that would create over 1 million jobs before they finally caved to public outrage over their obstruction. Hard to take The Right seriously when they claim to support the pipeline for the jobs it would create, and then threaten to block a desperately needed highway infrastructure bill that would create more jobs in less time.

“Supply” only has an effect on the price of oil when supply is LOW, and right now, production is higher than it was at any point under the Bush Administration, and (thanks to people cutting back due to high prices and environmental concerns), gasoline consumption is at its lowest in 15 years. So why are gas prices climbing back into the stratosphere? When supply is high (like now), the price is manipulated in two ways: “speculation” and “manipulation”.

  1. Curb Wild Speculation – Speculators on Wall Street take every opportunity to drive prices up to increase profits. Be it a busted pipeline in the Gulf of Mexico or saber-rattling of war with Iran, Speculators will invest in “oil futures” on the Commodities Market or purchase “Hedge Funds” betting against a decline in the price of oil, driving the price up regardless of supply. Over a decade ago, we used to require anyone that invests in the Commodities Market to PROVE they can “take delivery” of the commodities they invest in. Today, any schmuck living in Mommy’s basement with a “Trading App” on their iPhone can purchase 100 barrels of oil. We need to bring this rule back, allowing only those who can take possession of the Commodities they purchase, actually buy them. This will DRAMATICALLY reduce speculation by people simply looking to make a quick buck off driving up prices. (Some have expressed concern to me that such Regulation will simply drive investors to overseas markets w/o the restriction. Where the price is higher? I don’t think so. The big investors are going to go where the Commodities are cheapest, driving the price down everywhere else.)
  2.  

  3. Make “hoarding” illegal. – Okay, “hoarding” is a bit of a misnomer here. Oil companies aren’t actually filling tankers up with oil to send floating out to sea for months on end. Nor are they filling up giant land-based tanks with unrefined petroleum waiting for the price to go up. Why go through all that when the oil is already being “stored” just fine underground? No, “hoarding” in this case refers to active wells being “capped” deliberately, creating artificial shortages to drive prices up. Admittedly, this is very difficult to prove. If oil companies WERE actually storing oil in tanks/tankers, it would be easy to prove “hoarding”, but with capping wells, even an insubstantial amount of “hoarding” can have a significant affect on the global price of oil.
  4.  

  5. Investigate Refinery Closures – You might remember in the late 1990’s, Enron bought out most of the electricity generation plants in California and then randomly ordered those plants to shut down (for totally made-up reasons), creating artificial shortages in order to drive up the price of electricity (The Tonight Show even did an entire episode in the dark in June of 2001 because of it). Oil companies today are doing the same with refineries, closing down plants and refining less oil (so says a 2006 FTC investigation) to deliberately drive up prices (I even wrote about this back in May of 2007), and it should be illegal.

(Please note that the words “Drill” and “Keystone” appear nowhere in my list above.)

And while we’re at it, how about we end those Billion dollar tax subsidies to Big Oil at a time when they are already reaping record profits that have made Exxon the richest corporation on the face of the planet?

Three quick and simple ways to bring down gas prices quickly. Good luck finding a politician with the stones to call the oil companies and Wall Street out on it.
 


 

JUNE 19, 2013: The Rachel Maddow Show opened with a great expose’ on just how many North American tarsands “oil” spills there have been already by pipelines the oil companies assured The Public “wouldn’t rupture for at least 30 years” and ended up rupturing in just FIVE. The environmental devastation has to be seen to be believed… and if Republicans get their way… is coming to a backyard near you in the very near future:
 

Two pipeline spills EVERY DAY in Canada for the past 37 YEARS. – (8:47)

 


Sign the petition at 350.org.

Contact the White House with your own comments.
 

 
Comments
  • Admin Mugsy November 6, 2014 at 7:39 PM

    Ain’t this just dandy: After dense fog forced a flock of birds to land on three tailing ponds in Alberta, Canada, 122 promptly died in the space of a week, either weighed down by sludge and/or poisoned to death by chemicals (which, BTW, are soaking into the ground.)

    Loud booming “noise canons” are used to scare off birds to prevent them from landing there because no one wants a bunch of decaying dead birds surrounding the local tailing pond, but the birds have a tendency to “get used to” the loud booms quickly (wonder if nearby residents do?) and ignore them.

    http://thinkprogress.org/climate/2014/11/06/3589890/tailings-pond-birds-killed-canada/

     
  • Admin Mugsy November 17, 2014 at 9:04 PM

    Supporters of the pipeline like to cite a 2013 “independent” study commissioned by the State Department claiming a finding that the pipeline would have “no material impact” on greenhouse gas emissions.

    Turns out, that “independent” study wasn’t very “independent” after all:

    ‘Independent Study’ On Keystone XL Closely Linked To Fossil Fuel Companies

     
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