Fact check: Competing Keystone claims
Two senators on opposite sides of the Keystone XL pipeline debate are selectively spinning the facts to make their case:
• Democratic Sen. Chris Coons of Delaware says approval of the Keystone pipeline “means unlocking the Canadian tar sands,” when in fact the oil he refers to is already moving to market in large volume by other means and so can’t be “locked” simply by stopping the pipeline.
• GOP Sen. John Hoeven of North Dakota says “42,000 jobs are supported by this project,” adding that “construction jobs are good jobs.” But only 3,900 of those jobs would be in construction, and they would last only a couple of years. Once completed, the pipeline would take only 35 employees and a handful of contractors to operate.
‘UNLOCKING THE CANADIAN TAR SANDS’
Congress is now debatingveto the legislation
The pipeline, which would be built by TransCanada Corp., would run from Hardisty, Alberta, to Steele City, Neb.
We covered many of the partisan talking points about the project last year in an article we called “Pipeline Primer.”
Sens. Coons and Hoeven debated the merits of the project on Fox News Sunday Chris Wallace, the show’s host, asked Coons what Keystone means for jobs and the environment. Coons first answered the question about the environment, referring to the Canadian oil as “tar sandsoil sands
Coons, Jan. 11:
Coons’ implication is that if Congress blocks the pipeline then the Canadian oil will remain “locked” underground. But the Canadian oil is increasingly already being transported to the U.S. by rail. Canada exported about 182,000 barrels per day (bpd) by rail in the third quarter of 2014, up from nearly 124,000 bpd in the third quarter of 2013 and about 57,000 bpd in the third quarter of 2012, according to Canada’s National Energy Board
The 182,000 bpd being transported by rail is equal to about 22% of the proposed Keystone XL pipeline capacity.
The State Department noted in the market analysis sectionMarch 2014 report
In addition, there are three other pipeline projects that do not need U.S. approval and that would bring Western Canadian crude oil to market, as we described in our earlier article on the pipeline
For those reasons, the State Department said “approval or denial of any one crude oil transport project, including the proposed [Keystone] Project, remains unlikely to significantly impact the rate of extraction in the oil sands.”
Ian Koski, a spokesman for Coons, said the senator “might have been better served saying ‘further unlocked’ than simply saying ‘unlocked'” — acknowledging that oil is flowing from Western Canada, but arguing that the State Department report is outdated and its projections flawed.
Koski made the point that the market has changed since the State Department issued its report and oil prices have declined so sharply that “Senator Coons believes it is no longer a foregone conclusion that all of this tar is going to come out of the ground” with or without the Keystone pipeline.
Coons made that point during the show when he said the State Department “reached that conclusion assuming $100 a barrel oil. Oil has now dropped back to its average of the last 20 years, $50 a barrel. Different context, different outcome.”
It is true that it costs more to transport oil by railthe State Department report saidfallen below those levels since late 2014
But the price of crude oil is volatile and experts expect it will rise again. The Energy Information Agency issued a short-term energy report
Coons was correct when he said that oil is now “back to its average of the last 20 years.” Over the last 20 years, from 1995 to 2015, the average annual price of a barrel of oil — as measured by the West Texas Intermediate benchmark price
The financial incentive to extract and transport oil from Western Canada to the U.S. will depend on whether the price of crude oil stays at the 20-year average, as Coons says, or returns to the 10-year average. The EIA expects prices will be closer to the 10-year average.
Coons is also correct that the Keystone pipeline would carry “some of the dirtiest sources of energy on the planet.” That’s largely because of the energy required during the extraction process.
The State Department reports says burning a gallon of fuel from the Canadian oil on average results in 17% more greenhouse gas emissions
CREATING JOBS
Hoeven, in advocating for the project, emphasized the number of jobs that would be created by the proposed Keystone pipeline — a common talking point for supporters of the project. Senate Majority Leader Mitch McConnell refers to the Senate bill that would approve the project over the administration’s objections as a “jobs bill
Hoeven, Jan. 13:
The jobs figure is correct, but those jobs are temporary (for one or two years) and most of them are not construction jobs.
As we have written before, the U.S. State Department’s analysis says that during construction there would be approximately 16,100 direct jobs, which would include construction jobs, and 26,000 “indirect and induced jobs,” which would include the purchase of goods and services by the construction contractors and employees.
Of the 16,100 direct jobs, the State Department says2.7%
After construction is completed, the pipeline would require 50 jobs to operate: “35 permanent employees and 15 temporary contractors,” the State report says.
Hoeven is also correct that the State Department estimated that the project would contribute $3.4 billion to the gross domestic product, but to put that in perspective the report also pointed out that it would add 0.02% to the GDP.