Report: Keystone XL tar sands pipeline more of an economic liability than benefit

A new report from the Cornell University's Global Labor Institute shows how the Keystone XL tar sands pipeline is an economic liability with the potential to cause significant job losses from a major tar sands spill.  Because tar sands oil is more corrosive and toxic than conventional oil, it can increase the frequency of pipeline spills.  Moreover, a  tar sands spill causes far more damage than a conventional oil spill. Take, for example, the 1.2 million gallon tar sands spill on the Kalamazoo River in Marshall Michigan in 2010 where the clean up costs have been 10 times higher than a typical conventional oil spill.  While there has been a lot of attention to the possible jobs created from the Keystone XL pipeline – far less than what proponents claim – there has been very little attention to jobs that could be lost from a tar sands spill. Keystone XL is expected experience up to 91 significant spills over a 50-year period.    Which jobs are at risk?  Hundreds of thousands of workers in the agricultural and tourism sectors contribute ten of billions of dollars to the economy in the Keystone XL pipeline states.  The Cornell report helps illustrate yet one more reason why the Keystone XL tar sands pipeline should be rejected.   


Here are some of the key findings from the report:

Tar sands spills more likely

Tar sands oil is more corrosive and toxic than conventional oil and can therefore increase the frequency of pipeline spills.  According to the Cornell report, “Between 2007 and 2010, pipelines transporting tar sands oil in the northern Midwest have spilled three times more per mile than the U.S. national average for conventional crude.”

Keystone XL likely to experience significant spills

An independent analysis conducted by the University of Nebraska concluded that Keystone XL over a 50-year period is expected to experience 91 significant spills (greater than 50 barrels).  In fact, the University of Nebraska study found Keystone XL could spill as much as 6.9 million gallons of raw tar sands crude oil at the Yellowstone River crossing.  In just its first year of operation, the first Keystone pipeline operated by TransCanada has spilled 35 times in the United States and Canada in 2010.  This spill frequency is 100 times higher than forecast by TransCanada.

A spill from Keystone XL threatens jobs and the economy in pipeline states

While tar sands spills can have a tremendous impact on the environment, a tar sands spill on the Keystone XL pipeline through America’s agricultural heartland could cause significant economic damage and job losses.  The farming, ranching, and tourism sectors are major sources of employment along the pipeline’s route employing 571,000 workers with an output of $76 billion.  The pipeline will also cross over 90 miles of recreational lands in the pipeline state including state parks, national historic trails, and wildlife refuges.  

“Despite TransCanada’s assurances, we know there will be leaks and spills…It is not a matter of it, it is a matter of when, how often, and how much leakage there will be…When a leak happens, it will be [the farmers’] drinking water, their livestock water supply, and their irrigation supply that will be contaminated.  Their economic well-being is directly impacted by spills and leaks.” Nebraska Farmers Union

Tar sands spills more devastating than conventional oil spills

The Cornell report also looked closely at the largest tar sands spill in U.S. history on the Kalamazoo River in Michigan in 2010 where the costs have escalated to $750 million – 10 times as much per litre as conventional crude.  The clean up of the Kalamazoo river spill which has lasted almost two years has been especially difficult because conventional oil response techniques have been ineffective according to the EPA.   Today, 20 months since the tar sands spill, the entire length of the river (35+ miles) remains closed.   While conventional oil floats on the surface, tar sands is thick and heavy and sinks in water making it very difficult to clean up.

“Enbridge compensated us for the initial shutdown of our business, but we are concerned about the long-term impact that the spill has had on our business…one and a half years later our business is still suffering financially…" Debra Miller, Carpet Story Owner

An accurate assessment of the economic risks still needed

Ultimately, the report said that while there has been significant attention to the Keystone XL pipeline’s potential to create jobs, “scant attention has been given to how existing jobs and economic sector would be impacted from Keystone XL leaks and spills.”  The report said a more detailed risk assessment of the Keystone XL pipeline – one that considers job losses and economic harms from one or more tar sands spills – has not been completed.

Until such as assessment is completed and a full accounting of potential job losses from pipeline spills are considered, the Obama administration should not issue any approvals allowing TransCanada to move ahead with construction of the pipeline.