Business Groups Split on Keystone XL Pipeline

A proposed pipeline from Alberta, Canada to the Gulf of Mexico has drawn both the ire and admiration of business groups.

The controversial Keystone XL Pipeline has risen to national prominence following the passage of a payroll tax cut extension, which included a stipulation that President Barack Obama must make a decision in favor of, or against the project within 60 days. Proponents, like the U.S. Chamber of Commerce, claim that the $7 billion pipeline would be a jobs machine. The opposition, on the other hand, claims that the project will generate only modest job increases, and could end up costing more than it creates.

“If the president is serious about job creation and energy security, now is the time to act on the Keystone XL pipeline,” said U.S. Chamber President and CEO Tom Donohue. “This is the perfect example of a shovel-ready project that makes sense for our economy. The strong, bipartisan support for a provision requiring a prompt decision indicates that the Congress understood that there is simply no reason to delay a decision on Keystone until after the election.”

According to the Chamber, the pipeline will create 20,000 immediate jobs and an additional 500,000 barrels of oil from Canada, contributing both to job creation and presumably more affordable oil prices. “We strongly urge the president to move swiftly to approve the permit and move forward with this project, which is clearly in our national interest,” said Donohue.

However, environmentally-minded business groups, like the Green Business Network, have argued just the opposite; that the pipeline will divert oil, and jobs, from Midwestern oil refineries to their counterparts in the Gulf of Mexico. Citing a study conducted by Cornell University’s Global Labor Institute, the opposition has noted that consumers in the Midwest could end up paying 10-20 cents more per gallon once the pipeline is completed, ultimately suppressing spending and costing jobs. Furthermore, the environmental risks associated with the pipeline could create significant health and economic costs, thereby eliminating jobs as well.

The Keystone pipeline was originally proposed in September 2008, when TransCanada Keystone Pipeline, LP filed an application for a presidential permit with the State Department to build it. Under Executive Order 13337, the State Department must review the application when it would cross an international border with the U.S. The same executive order also directs Secretary of State Hillary Clinton to consult with federal agencies before issuing a decision as to whether or not the project is in the national interest. So far, no determination has been made.

Jacob Barron, CICP, NACM staff writer

1 comment:

  1. Even if the jobs increase is minimal, jobs are jobs. Small gains are gains nonetheless. However, taking the big picture, why wouldn't we want to be buying our oil from a friendly neighbor? I'm old enough to remember the 1980's, when OPEC held us hostage, Since Washington is too afraid of the "green", no-oil groups to drill for our own oil, this is the next best thing. The Green Business Network's inference of 'environmental and health' risks are just fear-mongering to the ignorant. They would have us believe that our enegy needs can be met by wind & solar....