Energy and Environment Reporting for Texas

Four Reasons Why Obama Decided Against the Keystone XL Pipeline

Photo by Chip Somodevilla/Getty Images

President Obama at a meeting in Washington on Jan. 17

On Wednesday the Obama administration officially rejected the proposed Keystone XL pipeline, which would take oil from Canada to refineries in Texas.

The president said in a statement that his decision was “not a judgment” on the merits of the Keystone XL pipeline, rather it was based on the “arbitrary nature of the deadline.”

But after making that statement the administration also sent a report to Congress detailing why they decided against the pipeline, and there are more reasons than just the deadline. The report is short, just five pages, and it’s actually readable (we’ve embedded it below), but here are a few quick takeaways:

  • Many estimates of the potential jobs created by the pipeline are way off. “Regarding employment,” the report says, “the construction of the Keystone XL pipeline would likely create several thousand temporary jobs associated with construction; however, the project would not have a significant impact on long-term employment in the United States.” It goes on to note that while some have projected hundreds of thousands of jobs as a result of the pipeline, “this inflated number appears to be a misinterpretation of one of the economic analyses prepared on the pipeline.” 
  • In fact, the pipeline would only result in a few thousand jobs. “Based on the amount of money the applicant projects it would spend on labor in building the pipeline, and the number of construction crews likely to be used in constructing the pipeline, the final EIS [Environmental Impact Study] estimated there would be approximately 5,000 to 6,000 direct construction jobs in the United States that would last for the two years that it would take to build the pipeline,” the report says.
  • And the overall economic impact would be minimal. Relying on the Environmental Impact Study prepared by the State Department for the pipeline in late August, the administration says that “over the remainder of this decade, even if no new cross-border pipelines were constructed, there is likely to be little difference in the amount of crude oil refined at U.S. refineries, the amount of crude oil and refined products such as gasoline imported to (or exported from) the United States, the cost of crude oil or refined products in the United States, or the amount of crude oil imported from Canada.”
  • By rejecting Keystone, we’re not losing out on massive amounts of oil. The administration’s report to Congress says that “there is currently excess cross-border pipeline capacity, but limited connections to the U.S. Gulf Coast refineries.” But the administration says there are ways of getting that oil to refineries in Texas without the Keystone XL, namely through “other new domestic pipelines, expansions or reversals of existing pipelines, and other modes of transport such as rail, that could play a role in increasing imports of crude oil from Canada to the United States, including to refineries in the U.S. Gulf Coast area.”
Read the full report:

Further reading: You can also read our roundup of the different reactions to the decision, our conversation with a Texas professor on why the pipeline is inevitable, and the Washington Post‘s 5 Myths About the Keystone XL Pipeline.


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