January 05, 2015
The Keystone pipeline could have a serious impact on our children’s future, since it will facilitate the removal of high carbon oil from western Canada. This comment must be qualified, since if oil prices stay near $50 a barrel, then it is likely that most of this Canadian oil will stay in the ground whether or not the pipeline is built. However, the environmental issues should be front and center in the decision as to whether or not to build the pipeline.
Many proponents of pipeline construction have argued that it was important to build the pipeline to create jobs. They are right that job creation should be a top priority for the Obama administration and Congress, but the Keystone pipeline is not really a big factor in the jobs picture.
According to the analysis from the State Department, the pipeline will create just over 21,000 jobs for each of the two years it is projected to be under construction. Note that this number quite explicitly included all jobs in the supplier industries as induced jobs created as a result of the spending of the newly employed workers. After it is completed, it is estimated that its maintenance will involve 50 jobs.
While these jobs would be important to the people who get them, they would make little dent in the overall employment situation. In the month of November the economy created 321,000 jobs. This means that the employment generated from building the Keystone pipeline would be a bit more than the jobs created over a two-day period in November. The permanent jobs would be roughly equal to the number of jobs created in a typical seven minute stretch last November.
Again, we should take jobs seriously. We could create millions of jobs by modernizing our infrastructure, including repairing and improving existing pipelines. We could also create millions of jobs by reducing the size of the trade deficit with a more competitive dollar (i.e. a dollar that was lower relative to foreign currencies). However we will not qualitatively change the labor market situation by building the Keystone Pipeline. This is a policy that should be decided based on its long-term impact on the environment.
