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February 19, 2012

FLASHPOINT: White House rejects Keystone XL: Sad day for U.S. workers

Imagine a project that could create 20,000 American jobs during construction, and as many as half a million longer-term positions. This project would employ hardworking Americans from many sectors of the economy and create growth and jobs in some of the states hardest hit by the recession. A broad, bipartisan group of policymakers, business leaders, and labor organizations support the project. And it would bolster America’s energy security.

You don’t have to imagine such a project, because it already exists. It’s called the Keystone XL pipeline. Unlike so many ideas to improve the economy, it’s a shovel-ready project.

Unfortunately, President Obama recently rejected the pipeline. Officials explained that while they weren’t opposed to the project overall, they weren’t comfortable with the relatively short timeline they had been given to make their decision.

Nevertheless, with this denial, Americans hoping for new jobs will have to keep hoping. With unemployment in the construction sector at over 16 percent, the building trades community is particularly disappointed.

The Keystone XL pipeline is a $14 billion, 1,661-mile long oil line designed to bring crude oil from Canada to the United States. Expanding on the existing Keystone pipeline, the completed project could increase movement of crude oil to about 1.1 million barrels into the U.S. each day, at full capacity.

Of the $14 billion projected to be spent on the project, about $7 billion would have been spent in six U.S. states stretching from Montana and South Dakota down to Texas. 

According to a study by the Perryman Group, each of those states would get a healthy economic boost from the project, with Montana, South Dakota and Nebraska each seeing between $400-500 million in total added expenditures. And Oklahoma and Texas receiving an estimated $1.2 billion and $2.3 billion, respectively.

Construction of the pipeline would have also brought an economic boon to surrounding states — including right here in Indiana, where manufacturers already had contracts to provide materials for the project. Pumps, motors and other parts would have been built in the Hoosier state, creating new jobs in the process. With Indiana’s unemployment currently running at 9 percent, those jobs are desperately needed.

The Perryman Group also reports on the now foregone “permanent benefits” and major energy savings America’s economy was set to see. The report estimates that the project could produce an annual economic boost of $221 billion in additional spending and $64 billion in additional output for the economy.

And with a better economy comes more jobs. In two years, the project would directly create 20,000 jobs, and indirectly stimulate the creation of an additional 553,235 positions.

Jobs for skilled craft construction workers are in short supply right now. But the Keystone XL pipeline would have quickly created thousands of jobs for the building trades under a project labor agreement that had already been executed.

Mark Ayers, president of the Building and Construction Trades Department, explains the overwhelming disappointment, saying, “Our members had anxiously embraced the hopeful rhetoric of ‘We Can’t Wait’ only to be disappointed by an administration unwilling to take its own words to heart and approve this vital project.”

Indiana’s own Sen. Richard Lugar stepped forward in favor of Keystone XL, staunchly supporting the project and the jobs it would have created. If more policymakers had demonstrated such support, perhaps America’s unemployed would not feel so betrayed.

Fortunately, there is an explored middle ground that could satisfy the administration without depriving Americans of jobs. In their decision, the president’s personnel noted that their concerns were largely limited to the roughly 20 percent of Keystone that will run through the Sand Hills in western Nebraska and the Ogallala aquifer.

The rest of the pipeline was basically concern-free. It has already been thoroughly reviewed and found environmentally safe. So, in the interim between now and the final approval for the overall project, regulators should allow construction to start on those parts. There’s nothing else to study — and starting now will create the jobs union workers desperately need.

Troy Post is a cross-country pipeline welder for UA Pipeliners Local Union 798 in Indiana.

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    March 12, 2010