Trump says Keystone XL will bring 28,000 jobs. A pipe dream?

TransCanada has a clearer path for the pipeline, after Trump reversed Obama's block of cross-border construction. But local opposition remains formidable.

Kevin Lamarque/Reuters
US President Trump smiles after announcing a permit for TransCanada Corp's Keystone XL oil pipeline while TransCanada Chief Executive Officer Russell Girling (l.), US Commerce Secretary Wilbur Ross (c.), and Energy Secretary Rick Perry (r.) stand beside him in the Oval Office of the White House in Washington, on March 24, 2017.

President Trump formally revived the Keystone XL pipeline on Friday, signing the presidential permit that granted TransCanada Corp. the right to cross-border construction on a project with symbolic weight for the future of US climate policy.

At a White House event attended by TransCanada chief executive officer Russell Girling and Sean McGarvey, president of North America's Building Trades Unions, Mr. Trump heralded what he called “a new era of American energy policy” that he said would lower costs for US consumers, reduce reliance on foreign oil sources, and create thousands of jobs.

"It's going to be an incredible pipeline," he said, according to the Associated Press. "Greatest technology known to man or woman and, frankly, we're very proud of it."

The approval clears away federal opposition to the pipeline, which was blocked by the Obama administration after a 2014 State Department review deemed it contrary to the national interest. But plenty of obstacles lay ahead for the builders. And Trump’s touting of the number of jobs to be created by the project – hyperbolic by most estimates – could also draw increased scrutiny to its economic benefits, particularly for the blue-collar tradesmen whose lot the president has promised to improve.

In a January column for Forbes, energy historian and consultant Ellen Wald wrote that the number of jobs to be created by the pipeline was “impossible to accurately predict.” Trump claims the number would be 28,000, and TransCanada promises 13,000 in construction alone, while the Obama-era State Department slims that estimate down to about 3,900 – and just 35 permanent ones. Opponents of the project have pointed out that drastic difference between permanent and temporary work in accusing advocates of inflating job-creation numbers, and say domestic consumers won’t be served either, since the 800,000 barrels of oil expected to pass through the pipeline would be bound for export. 

A safe guess would probably put the combined number of new construction and related-service jobs at fewer than 10,000, suggested Ms. Wald, and these would last only a short time, since the largely automated maintenance of the pipeline would require few long-term workers. 

That doesn’t mean it wouldn’t give a lift to oil-dependent parts of the US economy, especially the Gulf Coast, where the heavy Albertan crude would end up for refining after passing through Montana, South Dakota, Nebraska, Kansas, and Oklahoma.

"[T]he pipeline would send more products to be handled and refined in the Gulf region, increasing employment there to some extent, and it may increase investment in oil producing regions in the U.S. and Canada," she wrote. "The pipeline would also undoubtedly enhance state revenues and facilitate long-term economic development in the Gulf Coast region. The short-term economic growth from traveling construction crews would benefit local businesses, and would be look too quick to create a boomtown negative."

In a statement on Friday, TransCanada’s Russ Girling called the signing a "significant milestone."

"We greatly appreciate President Trump's administration for reviewing and approving this important initiative,” he said, according to the Associated Press. "We look forward to working with them as we continue to invest in and strengthen North America's energy infrastructure."

Before the crude gets flowing, however, TransCanada still needs to win financing, acquire permits from localities, and overcome legal challenges from environmentalists, indigenous groups, and landowners. 

"The Presidential Permit is only one part of a web of federal, state, and local permits that must be obtained prior to starting construction,” said Fred Jauss, a former lawyer with the Federal Energy Regulatory Commission and partner at the international law firm Dorsey & Whitney, in an interview with Reuters. "Other federal agencies, such as the Army Corps of Engineers, state regulatory commissions, and even local planning boards may have requirements that need to be fulfilled by Keystone prior to construction."

"In addition, TransCanada may still need to reach deals with hundreds of potentially affected landowners on the pipeline’s route. There is a lot of work ahead for TransCanada,” he added.

Other environmentalist opponents may argue in court that Trump is surpassing his authority by granting permission without a new State Department assessment of the environmental impacts. And Greenpeace says it will pressure banks not to finance the multi-billion dollar project.

"We'll use every tool in the kit," Rhea Suh, president of the Natural Resources Defense Council, told Reuters.

This report contains materials by Reuters and the Associated Press.

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