Putting Keystone XL tar sands pipeline's jobs numbers in context

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Last week, the President’s comments concerning the Keystone XL tar sands pipeline’s limited job creation potential generated a response from the media and project backers which obscured the President’s point. Supporters of the Keystone XL pipeline continue to pitch the project as a national jobs creator. President Obama has countered that in an economy of 150 million people, the Keystone XL tar sands pipeline would be a “blip relative to the need.” The President observed that the operation of the Keystone XL would only generate about 50 jobs while its construction would generate about two thousand jobs of a year or two. The construction of Keystone XL, which would generate 3,950 person years of work according to the State Department, has a job creation potential on par with building a shopping mall or the campus renovations the University of Oregon announced last week. Moreover, after it’s built, Keystone XL will only employ between 35 and 50 people – and some of these positions will be filled in Canada (DSEIS 4.10-24). That’s less than two percent of the long term employment benefits you could expect from a shopping mall. By pitching the tar sands industry’s pet project as a national jobs generator in an economy of 150 million, Keystone XL’s Congressional boosters are incurring a huge opportunity cost on behalf of their constituents who need jobs, not empty promises from the oil industry. While the Keystone XL tar sands pipeline is not a national jobs creator, it would be a significant new source of climate pollution, adding 1.2 billion metric tons of carbon pollution to the atmosphere over its estimated lifespan.  For that reason it fails the President’s climate test and should be rejected. 

The controversy surrounding the President’s comments on the construction jobs associated with Keystone XL comes down to this critique, presented in an update by Washington Post Fact Checker. State Department shows that the construction of Keystone XL would generate 3,950 person years of employment - the President said the construction of Keystone XL would “create about two thousand jobs over one to two years,” while the Fact Checker  believes it would have been more accurate to say that the project would employ 3,950 workers for a year instead.

Whether the construction of Keystone XL will generate 3,950 person years of work for one year or 1,975 person years of work for each of two years, the reality is that the President is right – Keystone XL is not the national jobs creator its proponents are making it out to be. The Fortuna Galleria Mall project on Long Island generated about 3,000 construction jobs. The University of Oregon’s campus renovations are expected to generate about 2,700 construction jobs, and yet have gone largely unobserved by Congress. The Gulf Coast Galleria in D’Iberville, Mississippi is expected to create fifty times more permanent jobs than Keystone XL. These projects show what the President and other serious national policy makers know to be true – the Keystone XL pipeline is simply not the national jobs plan its boosters make it out to be.

Clarifying the confusions around Keystone XL’s job estimates

The controversy about Keystone XL’s employment potential lies almost entirely on how different interests describe define ‘jobs.’ As folks who work in construction know well, the nature of their profession generally requires working on a series of short term contracts in the course of a year.  But when talking about jobs on a national scale, there must be a standardized way to discuss work across different industries in a manner that is intuitive to the public.

So how much work would the construction of Keystone XL generate? The answer is 3,950 person years. This is based on State’s Draft Supplemental Environmental Impact Statement (DSEIS), which outlines the number of construction workers per location, with a construction period for each state. 

Source: State Department, Draft Supplemental Environmental Impact Statement (DSEIS), pg. 4.10-6

If we look at how many ‘work years’ the construction of Keystone XL generates (by multiplying the number of workers by the weeks of work and dividing by fifty two), it comes together this way:

  • Montana: 4,000 construction contracts for an average of 19 weeks  = 1,462 work years
  • South Dakota: 3,500 construction workers for an average of 20 weeks = 1,346 work years
  • Nebraska: 2,700 construction workers for an average of 19.5 weeks = 1,013 work years
  • Kansas: 200 construction workers for an average of 33.5 weeks = 129 work years

All together, State’s analysis concludes that constructing Keystone XL would generate 3,950 person years worth of work. Of course, this is a necessary equivalency. While Keystone XL will be built over two years, it will not hire construction workers for two year - or even one year - contracts. As the table shows, 99% of construction workers will work on twenty week contracts.

So according to the State Department, constructing Keystone XL would generate 10,400 part year contracts or about 3,950 person years of work. TransCanada counts a part year contract as a job. The State Department’s definition is as follows:

“A job consists of one position that is filled for one year. A job could consist of two positions filled for a period of six months each, three positions filled for four months each, or any combination that sums to a year of employment.” DSEIS, Page 4.10-4

If permitted, TransCanada plans to build Keystone XL in two years. In this case, you can see where the President was coming from when he said that Keystone XL would generate two thousand jobs for two years – each year the pipeline was under construction, the project would generate 1,975 person years of work.

In an update, the Washington Post Fact Checker takes exception to this logic, arguing that you could just as easily say that the project’s construction would employ 7,800 workers over six months. That’s one way to put it. If TransCanada planned to build Keystone XL in six months, that would be the most accurate way to put it. However, TransCanada structured its project to be built over two years and State defined a job as a position filled for one year (or three four month contracts adding up to a year of employment). But putting our difference in semantics aside, whether you consider Keystone XL as generating 7,800 six month contracts or 1,975 per years of work over two years, the reality is that this project is not a major national job creator.

Keystone XL isn’t going to substantially increase U.S. employment, but it would substantially increase carbon pollution at a time we need to be reducing our emissions.  There is a better path forward for our country. In fact, just last year an organization of over 800 business leaders announced the creation of 110,000 jobs in clean energy and clean transportation. These jobs are helping to revive American manufacturing, cutting energy costs for homeowners and businesses, and scaling up new industries to provide a cleaner, more sustainable future. That’s a job plan to build a legacy upon.