Delude for Crude

The U.S. House of Representatives passed a bill to force approval of the Keystone XL tar sands oil pipeline last week, while the Senate is debating its version right now. Depending on how you look at it, the debate has either been a fact-checker’s worst nightmare or a dream come true: There are so many whoppers that it’s hard to keep up, but they’re also pretty easily disproven (though most went unchallenged in the stilted format of congressional discussion).

Here are just a few of the most egregious examples of when lawmakers went all Pinocchio on the pipeline.

“Economists have found that the pipeline would create 20,000 manufacturing jobs, an additional 118,000 spinoff jobs, including jobs within the U.S. refinery and petrochemical facilities.” —Louisiana Representative Bill Cassidy

So many estimates have been thrown around regarding KXL’s job-creation power that it’s easy to get confused. Speaking on the Senate floor on Tuesday, Louisiana Senator Mary Landrieu made the outlandish claim that the pipeline would generate “millions of jobs.” Even the CEO of TransCanada, Russ Girling, crossed himself up under questioning on ABC’s This Week, falsely claiming the project would create 42,000 ongoing jobs.

For the record, pipeline maintenance will require 35 permanent employees, plus 15 temporary contract jobs. Construction will employ approximately 42,000 additional people, directly or indirectly, for a period of two years or less. (That’s all according to numbers directly from the U.S. State Department’s report on the pipeline, which came from TransCanada.)

Representative Cassidy and other pipeline proponents prefer big numbers to accurate numbers, so they are citing figures from a 2010 study by the Perryman Group, which has since been thoroughly debunked by researchers at Cornell University. The study included investments from unrelated projects, overstated how much of the materials would be produced domestically, and was based almost entirely on TransCanada’s unreviewed data. The Perryman study appears to have been removed from its original URL and is now difficult to find online. Someone apparently forget to tell Congressman Cassidy.

“There is simply no option available that would somehow prevent Canada from developing these oil sands…. It’s happening, and it will continue to happen.” —Kansas Senator Pat Roberts

If tar sands extraction is unprofitable, no one is going to invest in them. It costs approximately $100 to mine a barrel of tar sands crude, upgrade it, and transport it by rail to refineries on the Gulf of Mexico. Brent crude—which is worth substantially more than the less desirable tar sands crude—is currently selling for only $75 per barrel. That means tar sands companies either have to produce their oil more cheaply or get out of the business.

Several energy giants are doing just that—Total, Suncor, and Statoil have all canceled or suspended plans for new tar sands mines in the last year.

For those companies sticking it out, the most obvious potential savings is in transport. Rail transport to Gulf Coast refineries costs around $25, which is killing tar sands’ bottom line. The KXL pipeline would cut that figure to approximately $9. At current prices, the savings still might not be enough to make the business profitable, but it is enough to tempt companies that suspect oil prices will creep up again. Without the pipeline, though, extracting Canada’s tar sands does not make economic sense. (Read my full analysis of the economics of tar sands for more.)

“The first pipeline in the system is known only as Keystone. That pipeline has been sending 600,000 barrels a day from Canada to Patoka, Illinois. It has been four years and counting, and the water in Nebraska is still clean.” —Texas Representative Pete Olson

In May 2011, a Keystone pipeline pumping station in North Dakota failed, sending 21,000 gallons of crude oil spewing into the air. It was one of many failures. In a single year, Keystone experienced 14 oil spills in several states.

The leaks were particularly embarrassing for TransCanada, which has also been found wanting in federal reviews and is the subject of serious allegations from a whistleblower inside the company. It’s a wonder TransCanada likes to brag about how safe and high-tech its pipelines are.

And, for the record, Nebraska has the nation’s sixth-most polluted waterways, according to an analysis released this year.

“Importing an efficient, reliable source of energy has the potential to decrease gas prices in the future.” —Louisiana Representative Vance McAllister

This is one of the most contentious claims in the KXL debate. Whatever your view, you can find an economist out there who will agree with you, but most of the experts who have taken a serious look at the issue think Keystone’s effect on pump prices will be minimal at best.

In 2012, the Washington Post asked several economists what KXL would do to gas prices. Those who felt they might drop qualified their comments with statements like “fairly small impact” and “a few cents.”

And at least three studies have concluded that KXL will actually increase the price of gas in the United States, especially in the Midwest, where a glut of oil is currently pushing prices downward. The pipeline would enable oil shippers to bypass the Midwest’s refineries, sending prices up anywhere from 5 to 20 cents per gallon.

As the Senate debate continues, the falsehoods are likely to keep on flowing (unlike tar sands oil, which is too heavy and sludge-like to travel through pipelines without chemical additives). We’ll keep calling out the lies on Twitter. Follow us there.