Keystone XL: A Pipedream Built on Myth

I was recently asked to submit an OpEd on the Keystone XL pipeline for the Illinois Business Journal in the MetroEast area of the state where I grew up. It is an interesting place for the project to be debated, as the issues fueling debate nationally are clearly on display at of the ConocoPhillips refinery in Wood River, IL, and the first Keystone pipeline which helps supply it. 

The issue of tar sands oil's pollution liabilities (it is chock full of extra sulfur, heavy metals, and carbon) was front and center in the battle over air pollution permits for the refinery's recent expansion. And of course, the safety issues that have drawn the ire of Nebraska's Governor and concerned citizens throughout the nation are made clear by the pathetic record of the first Keystone pipeline which terminates in the MetroEast region to feed the Wood River refinery. (Sadly, the steel mills in the region will not have a chance to offer up raw materials for Keystone XL---if it is built, the pipeline will utilize foreign steel.)

In recent weeks, I've seen a number of disheartening displays of disingenuous claims made by the pipeline backers in Illinois. So, I wanted to be quite clear about the documents that I refer to in my Op Ed and have pointed readers back to this post to get the scoop. In my attempt to push back on the myths of Keystone XL's supposed job creation, lowering of gas prices and energy security impacts, I pointed to the following documents:

Myth - Job Creation: This week Cornell University’s Global Labor Institute released a report about the massively inflated job claims made by the project cheerleaders. According to the Global Institute’s director, “It is GLI’s assessment that the construction of Keystone XL will create far fewer jobs in the U.S. than its proponents have claimed and may actually destroy more jobs than it generates.” You can find the report at

Myth - Lower Gas Prices: Because tar sands oil requires special technology to process, it is sold at a discount to Midwestern refineries that can access the Oklahoma oil terminals where most of the oil is delivered. Keystone XL would open the way to new Houston refineries with technology to refine the heavy tar sands crude, thereby eliminating the need for the discount product in the Midwest, resulting in a guaranteed increase at the pump for much of the country. TransCanada, the pipeline’s builder, makes this clear in their filings, which include the statement: “The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of US $2 billion to US $3.9 billion.”

Myth - Energy Security: The idea that the pipeline will add to “energy security” in the United States is non-sense. Keystone XL is about opening foreign markets. Presently, tar sands sales are limited by a lack if access to international markets. The connection to Houston refineries is key to world shipping since they are located in a tax-free international business zone attached to a robust international oil transportation network. At least one refiner has said that they will export all the fuel that they make---it will not end up in American gas tanks. So much for securing American energy supplies.  Google the news coverage in Canada, to follow what Alberta’s energy minister really says about this issue. Additionally, the U.S Department of Energy’s evaluation of the pipeline project does not support the notion that more tar sands means less Middle Eastern oil would be imported. Petroleum economist Philip Verleger lays it out in the Minneapolis Star Tribune at And have a look at this document from Ensys, which did the evaluation for DoE.

The Keystone XL Pipeline is being misrepresented as the cure to our energy ills, be they economic or national security. Instead, the pipeline will render us mere conduits, allowing special interests to reach more lucrative markets, while we Americans assume all the spill liabilities for Canadian and other oil interests. Don’t buy into the pipe dream. It is not in our Nation’s best interest.