Think Progress Debunks Three Myths About the Keystone XL Pipeline
One of the most important facts that is missing in the national debate surrounding the proposed Keystone XL tar sands pipeline is this — Keystone XL will not bring any more oil into the United State for decades to come. Canada doesn’t have nearly enough oil to fill existing pipelines going to the United States. However, existing Canadian oil pipelines all go to the Midwest, where the only buyer for their crude is the United States. Keystone XL would divert Canadian oil from refineries in the Midwest to the Gulf Coast where it can be refined and exported. Many of these refineries are in free trade zones where oil may be exported to international buyers without paying U.S. taxes. And that is exactly what Valero, one of the largest potential buyers of Keystone XL’s oil, has told its investors it will do. The idea that Keystone XL will improve U.S. oil supply is a documented scam being played on the American people by Big Oil and its friends in Washington DC.
The fact that Canada has excess pipeline capacity is well known. In a Department of Energy report evaluating Keystone XL’s impacts on U.S. energy supply over the next twenty years, the agency found that it will take decades for Canada to produce enough oil to fill existing pipelines. On page 90, the report concludes that the United States will import the same amount of crude from Canada through 2030 whether or not Keystone XL is built.
From Canada’s perspective, the problem with existing pipelines is they all end in the U.S. Midwest and only allow one buyer – the United States. As Canada’s Natural Resources Minister Joe Oliver recently said, “we export 97 percent of our energy to the U.S. and we would like to diversify that.” However, the Canadian government has put the brakes on the two pipeline proposals to export tar sands through its provinces due to the need to take more time to listen to its own public’s concerns about water and safety.
Keystone XL would be Canada’s first step in diversifying its energy market. The pipeline would divert large volumes of Canadian oil from the Midwest to the Gulf Coast, where it would be available for the first time to buyers on the world market. To sweeten the deal, many of the refineries on the Gulf Coast happen to be located in foreign trade zones, where they can export Canadian oil to the world market without paying U.S. taxes. Oil Change International investigated this issue in a report that found the Keystone XL pipeline was part of a larger strategy to sell increasing volumes of Canadian crude on the international diesel market.
When Canadian regulators at the National Energy Board (NEB) considered the Keystone XL proposal in 2008, they asked TransCanada to justify another pipeline when there was already so much spare capacity. TransCanada conceded that Keystone XL would take oil from existing pipelines, increasing shipping costs. However, TransCanada argued that this cost would be more than offset as shifting Canadian oil from the Midwest to the Gulf would increase the price that Americans paid for Canadian oil by $3.9 billion.
In fact, TransCanada refused to support a requirement that oil on Keystone XL be used in the United States in a recent Congressional hearing. Earlier this month, Representative Edward Markey asked TransCanada’s President Alex Pourbaix to support a condition that would require the oil on Keystone XL to be used in the United States. Mr. Pourbaix refused, saying that a requirement to keep oil on Keystone XL in the United States would cause refineries to back out of their contracts. That very well may be the case as Valero, one of the largest prospective purchasers of Keystone XL’s crude, has already told its investors the its future business is in international export.
Simply stated, Keystone XL is a way to get Canadian oil out of the United States, not into it.
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By Rebecca Leber on Dec 16, 2011 at 5:24 pm
Speaker of the House John Boehner (R-OH) insists that the GOP-led House will fight for the cash-rich oil industry at the expense of the middle-class payroll tax cut. “If that bill comes over to us,” he told reporters, “I will guarantee you that the Keystone pipeline will be in there when it goes back to the United States Senate.” Project advocates, who include Boehner and Senate Minority Leader Mitch McConnell, misrepresent its economic benefits to favor the oil industry, throwing out claims that Keystone XL creates “tens of thousands of jobs.”
However, studies conducted independently of TransCanada find much smaller jobs numbers, far from “tens of thousands.” An oil contractor hired by the State Department reported it would create between 5,000 and 6,000 temporary jobs, while an independent study by Cornell University found it would create only 500 to 1,400 temporary jobs. Once the costs of the increased pollution and risk of oil spills is factored in, Cornell found, the jobs impact is likely to be negative. The “118,000 spin-off jobs” number used by TransCanada received two Pinocchios from the Washington Post Fact Checker:
As opponents have documented, if the capital costs are lower than predicted, and if the multiplier is smaller, then the number of “spin-off jobs” can shrink dramatically. The same goes for the estimates of “permanent jobs,” which depend also on the price of oil.
Among the list of jobs that would be created: 51 dancers and choreographers, 138 dentists, 176 dental hygienists, 100 librarians, 510 bread bakers, 448 clergy, 154 stenographers, 865 hairdressers, 136 manicurists, 110 shampooers, 65 farmers, and (our favorite) 1,714 bartenders.
How did a grossly exaggerated number become the prevailing argument to build the pipeline? The reason is the oil lobby is in overdrive. At least 42 companies have lobbied on Keystone XL since 2009, and 33 actively campaigned in the most recent quarter.
Congress’s best salesmen for the pipeline are conveniently the top beneficiaries of Big Oil donations. McConnell, who said he will oppose any payroll bill that doesn’t include the pipeline, is Senate’s biggest recipient of oil and gas money, receiving $199,000 this year. Boehner is one of the top 10 recipients in the House this year, and has taken in $434,050 from the industry over his career.
Pipeline supporters Rep. Michael McCaul (R-TX), Sen. Thad Cochran (R-MS), Judy Biggert (R-IL), and Carolyn McCarthy (D-NY) even own TransCanada stock.
If the numbers weren’t enough, the U.S. Chamber of Commerce has been bragging about its lobbying spree and influence on the Hill.
By Brad Johnson on Nov 4, 2011 at 9:35 am
The Keystone XL tar sands pipeline will not reduce dependence on imports from the Middle East, an analysis conducted for the Department of Energy revealed a year ago. The hope of getting away from oil from the volatile region is a favored talking point by proponents. “The Keystone project has the potential to significantly reduce oil imports from the Middle East,” Rep. Ed Whitfield (R-KY) has claimed. However, an analysis by Department of Energy contractor Ensys Energy in December 2010 found that the pipeline would have virtually no impact on Middle East imports:
In contrast, efforts to reduce oil demand, Ensys found, “would result in reduction of oil imports from non-Canadian foreign sources, especially the Middle East.”