Jobs and Regulation

December 14, 2011 By Florian Schach

Blocked Again? No Flow Through the Pipeline on Job Creation

Looks like government overregulation strikes again. Only this time, it’s the Keystone XL Pipeline and the thousands of jobs it would provide being held back.  The president has decided to delay giving a final call on the matter until 2013. In addition, he has already advised that he will veto any legislation that ties the Keystone Pipeline to the Payroll Tax Cut. 

Once again, overprotective tendencies are again challenging some of the possible gains this pipeline could provide both now and in the future.

The Keystone XL Pipeline has generated a lot of environmental controversy in the last few months.   The key argument made by environmentalists and protesters is that building the Keystone Pipeline is a threat to the Ogallala Aquifer, (a large water spring located across several states and Nebraska’s Sand Hills) through which it would be routed. Though fear is that it could taint the water supply affecting the lives of many Americans, it should be noted that several other pipelines already run through the same water source.

If this new pipeline is such a great threat, then why has the State Department already said that the environmental risk of such a project is low?  Also taking the aquifer concerns into consideration and even talking about perhaps rerouting the pipeline, why is there still such a long delay from the President on such a time-sensitive issue?

The delay of a decision on the matter is an example of prioritization of politics over practicality. Unemployment in the US is at such an all-time low and people are competing more fiercely for any jobs available, all while their professional skills and thus their employability hang delicately in the balance. 

The opportunity to create jobs (now) with this pipeline stands right before us. Pipeline development strikes both environmental and economic chords, but it seems that we are rushing to the side of environmentalists, when we haven’t examined some of the positive effects the pipeline would have.

• Jobs. Energy infrastructure company, TransCanada estimates that its Keystone project can create up to 20,000 jobs in manufacturing and construction which would happen as a direct result of its approval.   One study estimates that the pipeline could add as many as 179,000 jobs by 2035. In addition to that Six States (Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas) would receive an additional $5.2 billion in property taxes.
• Simplicity.  Canada is currently America’s biggest supplier of oil. The Keystone Pipeline would supply Americans with an extra 800,000 barrels of oil per day.  Not approving this pipeline both lessens our energy supply and redirects the sale of Canadian energy to other buyers such as China, which could have a negative economic impact in the future, especially because  we buy 97% of Canada’s oil.   If the oil supply is bought up by other countries, it could drive up the price of Canadian oil. When barrel prices go up, it hits the wallets of consumers and also can cost a significant number jobs related to our domestic oil supply. That combined with the fact that Canada is our biggest trading partner, $1 billion crosses the US-Canada border every day. It might make the government think twice about pipeline development, and the possible loss of revenue to someone else.
• Reducing foreign oil dependence. With the pipeline in place, we would be able to produce our own oil, reducing some of our dependence on foreign oil. Of course, we would still depend on Canadian oil heavily, but mining our own oil reserves will allow us to reduce our dependencies on oil from countries with traditionally unstable political climates.

Although not the most ideal of situations, the Keystone Pipeline would at least provide some sort of relief to millions of Americans who are looking to get some help, even if only temporary.  The possibility of building Keystone has been in talks since 2008. To put off this decision for another year is a counteractive to both what the United States says its economic recovery goals are, especially when the number of jobs available is becoming less and less.

No Tags For This Post

Comments