TransCanada Corp.’s Keystone XL pipeline, which is awaiting U.S. approval by President Barack Obama.Nathan VanderKlippe/The Globe and Mail
U.S. President Barack Obama's latest public comments on TransCanada's Keystone XL pipeline have highlighted the wildly divergent job estimates associated with the project while raising concerns among American proponents that he's preparing to reject it.
The White House hasn't responded to queries about where the president got his paltry estimate of 2,000 potential jobs during a recent interview with the New York Times. A spokesman said simply that Obama's remarks prove he is trying to "drain the politics" from the Keystone XL debate.
But a U.S. Chamber of Commerce official said Tuesday that Obama's public comments about the pipeline over the past few weeks suggest he might be setting the stage to delay a decision on Keystone XL even further.
"He's talked about the need to focus on the climate impact, he's talked about looking at the jobs numbers and whether they're significant, he's talked about national security issues associated with the pipeline," Matt Koch, the chamber's energy and pipeline specialist, said in an interview.
"They're all important but they've all been part of the process, and to keep shifting around from one issue to another publicly is causing concerns that he wants to leave the door open to request more studies. And it's not necessary — all those aspects have been looked at with a lot of scrutiny already."
Koch added that Obama's low-ball job estimate in his interview with the Times, published Sunday, was "disturbing" given the president keeps referring to the importance of the approval process and yet doesn't seem to have grasped his own administration's findings.
"Obviously he's not paying much attention to the potential benefits despite this process he keeps referring to," Koch said. "To see him come out and really miss the mark and publicly downplay the benefits is very frustrating."
Obama told the Times that Keystone XL "might create maybe 2,000 jobs during the construction of the pipeline — which might take a year or two."
He added with a chuckle: "And then after that we're talking about somewhere between 50 and 100 jobs in a economy of 150 million working people."
That's in direct opposition to the U.S. State Department's draft report on the project.
The analysis released earlier this year by State Department officials found that the pipeline would support 42,100 jobs during the one- to two-year construction period, with total wages of about $2 billion, although only 35 permanent and temporary jobs will remain once Keystone XL is fully operational.
Gary Doer, Canada's ambassador to the United States, also pointed to the State Department numbers when publicly taking issue this week with Obama's job estimate. The department is assessing the pipeline because it crosses an international border, but a final decision from Obama isn't expected until late this year or early 2014.
Rather than relying on the State Department initial findings, Obama appears to be basing his jobs estimate on an anti-pipeline study by the Cornell University Global Labor Institute.
The Cornell study says each segment of the pipeline requires 500 workers. Given the southern leg of Keystone XL is near completion, 10 segments of the pipeline remain — translating into 5,000 jobs over two years, or 2,500 jobs a year.
Adding to the confusion, however, was TransCanada itself, which said on Sunday that 20,000 jobs would be created over two years — 22,100 fewer jobs than the State Department says would result, but 15,000 more than forecast by the Cornell study.
On Tuesday, TransCanada's Shawn Howard explained the 22,100-job gulf between the State Department and TransCanada. The State Department report, he said, is including another 22,100 "indirect" and spinoff jobs related to the construction of Keystone XL, including employment in professional services, lodging and food services.
"We speak to what we know — and that's consistently been the 20,000 direct construction and manufacturing jobs," Howard said. "We did not include additional indirect or induced jobs in that number ..... We report and account for jobs in exactly the same fashion as the U.S. Department of Labor does."
Keystone XL job claims have long been a source of conflict in the United States — and, at times, wild exaggeration. The American Petroleum Institute once claimed 500,000 jobs would be created by Keystone XL, and during the 2012 Republican presidential race, Texas Gov. Rick Perry pegged the number of potential of jobs at "100,000 to one million."
Congressional Republicans haven't gone that far, but they're expressing dismay this week about the president's insistence the pipeline would create minimal American jobs.
"A president disparaging private-sector jobs ... is beyond belief," Fred Upton, the chairman of the House of Representatives' energy and commerce committee, told Fox News.
"In this economy, any source of private job creation should be welcomed with open arms. After nearly five years a there is no reason to delay these jobs another day. Republicans, Democrats, leading unions, and job creators all agree, it's time to start building."
The Republican National Committee has also taken aim at the president for his insistence that there's no evidence Keystone XL would be a "big jobs generator."
"President Obama joked about the potential job-creating power of the Keystone XL pipeline. With our economy lagging, the president should be jumping at any opportunity to create jobs instead of bending to the will of special (interests) at the expense of out of work Americans," the committee said in a statement.
Sen. John McCain disputed the president's numbers, asserting at a luncheon in D.C. on Monday that the pipeline would create thousands of jobs while chastising Obama for looking down his nose at any job creation potential.
"It is wrong of him to say that it really wouldn't mean many jobs when we've got 7.6 per cent unemployment across this country," the Arizona lawmaker said. "It seems to me that every new job would be important when we have unemployment that high."
Nebraska congressman Lee Terry said the president now has "zero credibility when he speaks about infrastructure projects creating jobs."
And Paul Ryan, chairman of the House budget committee, has suggested the pipeline may be part of upcoming budget negotiations that are already threatening to become toxic. Some congressional Republicans are vowing to shut down the federal government if the president's sweeping health-care reform law isn't defunded.
It's the second time in as many months that the president has spoken publicly about Keystone. In his highly anticipated national climate change speech last month, Obama said pipeline shouldn't be approved if it leads to a significant increase in greenhouse gas emissions.
In the Times interview, Obama also said Canada may have to reduce the carbon footprint of Alberta's oilsands in order for the pipeline to win approval. Keystone XL would carry millions of barrels of oilsands bitumen a week through six U.S. states to Gulf Coast refineries.
"I'm going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere," he said. "And there is no doubt that Canada at the source in those tarsands could potentially be doing more to mitigate carbon release."
Gina McCarthy, the new head of the powerful Environmental Protection Agency, wouldn't weigh in on Keystone XL in great detail during her first public speech since starting the job.
But she did note that in his June climate address, Obama "sent a very strong signal that climate's impact would be taken into consideration in this decision, and in others."
The EPA has proven itself to be far more wary of Keystone XL than the State Department, and has twice criticized the department's environmental assessments of the pipeline as being insufficient. McCarthy said Tuesday the EPA would continue to provide input on State's environmental findings on Keystone XL.
"I think the best that the EPA can do is to continue to be an honest commenter on the environmental impact statement, which we have done our best to do and will continue to do that, and work with the administration as difficult decisions are made," she said in response to a question from an environmentalist following her address to Harvard Law School in Boston.