Obama points out economic downsides of Keystone XL

by Cassady Craighill

July 29, 2013

Originally posted to Grist by Lisa Hymas, Senior Editor at Grist

President Obama doesnt seem sold on the economic benefits of the Keystone XL pipeline, which would carry carbon-intensive tar-sands oil from Canada to the Gulf Coast for export.

In hismost extensive public comments to dateon Keystone, made during aninterview withThe New York Times, he stressed the neutral or negative economic aspects of the proposed project.

First, he pointed out that Keystone would create few permanent jobs:

Republicans have said that this would be a big jobs generator. There is no evidence that thats true. And my hope would be that any reporter who is looking at the facts would take the time to confirm that the most realistic estimates are this might create maybe 2,000 jobs during the construction of the pipeline which might take a year or two and then after that were talking about somewhere between 50 and 100 jobs in a economy of 150 million working people. that is a blip relative to the need.

In fact, the draft environmental impact statement released by the State Department in March estimates that the pipeline wouldcreate just 35 permanent jobs[PDF].As of June 2013, there were11.7 millionAmericans unemployed. After Keystones built, wed be 0.0003 percent of the way toward solving that problem.

Second, Obama noted that the bulk of the oil that would travel through the pipeline would be shipped abroad, providing no benefit to Americans.

[T]hat oil is going to be piped down to the Gulf to be sold on the world oil markets, so it does not bring down gas prices here in the United States. In fact, it might actually cause some gas prices in the Midwest to go up where currently they cant ship some of that oil to world markets.

Yep. Earlier this month, a report from the nonprofit Consumer Watchdog found thatKeystone could raise gas pricesby as much as 40 cents a gallon in the Midwest. Areport released last yearby the Natural Resources Defense Council and two other groups also found that the pipeline would raise gas prices for North American drivers.

As for the climate impacts of the project, Obamas message was more muddled.

NYT: Youve said that you would approve [Keystone] only if you could be assured it would not significantly exacerbate the problem of carbon in the atmosphere. Is there anything that Canada could do or the oil companies could do to offset that as a way of helping you to reach that decision?

MR. OBAMA: there is a potential benefit for us integrating further with a reliable ally to the north our energy supplies. But I meant what I said; Im going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere. And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release.

NYT: And if they did, could that offset the concerns about the pipeline itself?

MR. OBAMA: We havent seen specific ideas or plans. But all of that will go into the mix in terms of John Kerrys decision or recommendation on this issue.

Theres that word again, significantly, the same word Obama used inhis big climate speecha month ago, when he first said that climate would be a factor as his administration decides whether to approve the pipeline. At that time, he said he would only OK it if this project does not significantly exacerbate the problem of carbon pollution. That statement can be, and has been, interpreted in many different ways. Asour David Roberts wrote, it has proven a kind of Rorschach blot for the energy world. Obamas new comments do nothing to de-Rorschach the matter.

Its notable that the president is trying to counterthe GOPs rah-rah rhetoricabout how Keystone will create tens of thousands of jobs and make the U.S. more energy secure. It shows, if nothing else, that Keystone opponents are making their case heard and changing the debate.

Maybe Obama is laying the groundwork for putting the kibosh on Keystone. Or maybe hes not.

Bottom line: We still dont know what hes going to decide. And we probablywont know for months.

Cassady Craighill

By Cassady Craighill

Cassady is a media officer for Greenpeace USA based on the East Coast. She covers climate change and energy, particularly how both issues relate to the Trump administration.

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