Misguided Protest? I Don’t Think So.

The U.S. does not need the Keystone XL pipeline. It will not create any significant amount of jobs, or decrease U.S. oil imports from the Middle East, or lower U.S. gasoline prices.

I do not think that last week's protest against the Keystone XL pipeline was misguided. 

What will be transported through the pipeline?

The pipeline will be carrying tar-sand derived bitumen.

Bitumen is not the normal garden variety crude oil produced from conventional oil fields. It is heavy tar with the viscosity of peanut butter, which is diluted with natural gas condensates so that it can be transported at pressures of 1,440 psi and temperatures of 160 degrees Fahrenheit to keep the product at a low enough viscosity to flow. Diluted Bitumen is also known by as “dilbit.”

This is not to say that conventional crude oil can be put over ice with a slice of lime and consumed at happy hour, but dilbit is not the same as crude oil by a long shot.  In fact, it is not even considered crude oil so it is exempt from taxes paid to the U.S. government which are used to fund clean ups from pipeline breaks.

Dilbit is also very corrosive, because it still contains quartz sand particles from the tar sands from which it was mined, which wears out pipes much faster than conventional crude. Dilbit pipelines in Canada had 25 times the number of ruptures per mile than U.S. pipelines due to internal corrosion.

Dilbit spills are not like crude oil spills

A dilbit pipeline spill into the Kalamazoo River in July of 2010 permanently polluted about 30 miles of the Kalamazoo River in Michigan because after the highly volatile dilution fluids evaporated, the remaining bitumen sank to the bottom of the river, where it could not be effectively cleaned up.  Still, whatever cleanup was performed cost almost $30,000 per barrel, compared to $2,000 per barrel for conventional crude spills.  (Full disclosure – this pipeline was not owned by TransCanada; however this is an example of the kind of hazard dilbit represents).

The National Transportation Safety Board said that this mess represented “a complete breakdown of safety.”  Leak detection systems failed, previously reported pipeline defects were not repaired. In fact, failures of leak detection systems are endemic to the U.S. pipeline system.  Members of the public report pipeline leaks 20 times more often than pipeline operators.

Note that during its first year of operation, over 30 spills have already occurred in the completed portions of the Keystone pipeline in Canada and the U.S, in addition to 14 reported leaks.  Regardless of all the promises made by TransCanada to the State of Nebraska to both prevent spills and respond to them in a timely manner, this sort of record still makes me wary of broad brush conclusions that TransCanada does will do “anything and everything” to minimize these risks, based on their own history of operations.

Also note that even though a big deal has been made about TransCanada shifting the route of the pipeline to avoid the Ogallala aquifer in Nebraska (source of most Nebraska’s groundwater), the fact is that it is still crossing the aquifer for a distance of about 250 miles. It was just rerouted to go around most of a major wildlife refuge.

Does Keystone XL create thousands of new American jobs?

Short answer – no.

A comprehensive study the Cornell University College of Industrial and Labor Relations and a study by the State Department indicate that the number of jobs created by the pipeline will be far less than estimated by TransCanada’s consultant.

The Cornell report stated:  “The Perryman study offers no figure for the direct jobs that might be created by Keystone XL, but it does claim that the project will generate “118,935 person-years” of employment. A “person year” of employment is not equivalent to an individual job in the real world, despite the obvious inference that it is. Perryman also claims that the project will, over time, lead to 250,000 - 450,000 jobs. These numbers are also cited on a frequent basis.”

So . . . the jobs claim is for the number of “person-years” of jobs created over an entire century of pipeline operations, not 100,000 jobs created right now. Also, many of the jobs in the claim are jobs that already exist, not new jobs.  The Cornell report goes into great detail on the flaws in TransCanada’s report but their conclusion is that the TransCanada consultant's report is “deeply flawed”.

The Cornell report estimates between 2,500 and 4,650 temporary construction jobs during the time the pipeline is being built. The State Department report estimates that 6,000 jobs will be created during construction and operation. 

Very few manufacturing jobs for pipeline materials will be created. Most of the pipe has already been procured and it was not made in the US, but in Russia and India. U.S. contractors will be used for final pipe preparation, but that's it.

Of concern here according to the Cornell report is that one of the major suppliers of pipe “the Indian company, Welspun, which is likely to be the largest steel pipe manufacturer for the project, is currently being sued for the sales of defective pipelines and has been repeatedly found to produce substandard steel.”

Will the pipeline help the U.S. become independent of Middle Eastern oil imports?

Short answer – no.

Ironically, the petroleum products that will be refined from tar sands bitumen at refineries in the Gulf of Mexico will probably not even be consumed in the United States but will be exported, according to the Cornell report.  Formerly, this product was refined in Midwest refineries, but by diverting the dilbit to the Gulf Coast, it is estimated that the loss of locally refined petroleum products will actually raise the price of gasoline in the Midwest and cost jobs, not create them.

Oil imports into the United States have been decreasing over the last decade and we now get about 45% of our oil from foreign sources and half these imports come from the Western Hemisphere and not the Middle East.  In fact, only 22% came from the Middle East in 2011, according to the U.S. Energy Information Administration. Saudi Arabia crude constituted 14% of total imports.

Projections are that with exploitation of the Bakken formation in the Dakotas and Wyoming and newer technologies to extract oil from existing oil fields – the U.S. will achieve energy independence in the next decade or two.

Regardless, use of American military power to protect sea lanes in the Middle East will probably not end even if we no longer import any oil from there.  There are other geopolitical considerations which will probably require the U.S. to keep bases and Navy fleets in and around the Persian Gulf for years to come, so in my mind, this pipeline will do nothing to lessen the need for U.S. presence in that unstable part of the world.

The Bottom Line

Regardless of the impacts to global climate and the environment around the Athabasca tar sands which are manifest (and I could go on for many pages about those), it is clear to me that the United States does not need the Keystone XL pipeline.  It will not create any significant amount of jobs, it will not decease oil imports from the Middle East.  It will not decrease the price of refined petroleum products in the United States. 

Misguided protest? – I don’t think so.








This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Neil Herzig January 14, 2013 at 08:16 PM
Part 1: Some counterpoints to the slanted arguments and mistruths against Keystone: Oil-Sands Pipeline Leak More? 1.Although some of the oil delivered via Keystone will be derived from the oil sands the pipeline will also ship a high percentage U.S. based petroleum. 2.A recent Battelle study (July 2012), confirms that the oil-sands is not more corrosive than other crude oil. According to the study, it is comparable to other heavy crude oils, “such as those produced in Venezuela, Mexico, and California, which have been transported and refined in U.S. for decades.” Additional information is available in Section 6.3 of the Nebraska Department of Environmental Quality “Draft Evaluation Report on the Keystone XL Pipeline Nebraska Reroute”. 3.TransCanada, the pipeline owner, has agreed to adhere to dozens of special conditions outlined in the State Department study to keep the pipeline especially secure. Keystone XL will be built with thicker material in especially sensitive regions, monitored with thousands of sensors and designed with hundreds of auto shutoff valves making it the safest pipeline in North America and perhaps the world. 4.Each year, hundreds of millions of gallons of crude oil and petroleum products are safely transported on thousands of miles of pipelines in the U.S. 5.If Keystone XL is not finished the Canadian and U.S. based petroleum will most likely be transported into and through the U.S. via other, much riskier means (e.g. truck or rail).
Neil Herzig January 14, 2013 at 08:16 PM
Part 2: Some counterpoints to the slanted arguments and mistruths against Keystone: Not enough jobs? 1. 6,000 jobs is not enough? Hogwash. Tell that to our nearly 8% unemployed (which is actually close to 15 to 20%). And tell that to the myriad of labor unions representing millions of people who support the project. 2. What other industry / business has to justify a project based upon the number of jobs it creates? For example if Boston Market wants to locate in Westborough will we say that 20 jobs is not enough – good bye! More North American Supply Is No Good? 1. There is enough untapped oil and gas in North America to not only reduce but to completely eliminate our dependence on Middle Eastern and South American oil for the foreseeable future. 2. Whether crude oil is sourced from the Mid-East, South America, Canada or the U.S. it is the oil producers and refiners – not the pipeline owners – that will decide, based upon economics (a.k.a free market capitalism), how to refine and where to sell their products. By the way, exporting products to other countries happens to be a good thing for this country – helping to offset our massive and ever growing trade imbalance.
Andy Koenigsberg January 14, 2013 at 10:07 PM
Neil - You were the one who said, and I quote: "Third, this multi-billion dollar pipeline project is and will continue to create thousands of direct construction and manufacturing jobs to supply the billions of dollars of materials. " Demonstrably, this is not the case. Fine - 6000 jobs is 6000 jobs - but the politicians who support the project have talked about it creating tens of thousands of jobs and so has TransCanada. Again - the justification for building the pipeline as a major job creator that will make a dent in our unemployment rate is false. Second - "the billions of dollars of materials" either are or will be made overseas. Third - you were the one who talked about the "politically unstable and unfriendly middle-east," as a rationale for building this pipeline when the fact is, we are getting less and less of our oil from there all the time, so justifying the pipeline on that basis is moot. You talked about an energy policy that " balance energy independence, price stability, economic viability". My conclusion is that the pipeline will do none of these things. It won't contribute to energy independence, it won't contribute to price stability and it won't have nearly the economic impact TransCanada says it will. Now, will it get built - most likely - but I thought your posting glossed over a lot of the cons to the project and that these other issues should be addressed as well. Thanks for reading and commenting.
Ron Goodenow January 15, 2013 at 03:04 AM
As one who has lived out there and tries to keep on top of things let me say just a few things. First, many ranchers, farmers and other otherwise 'conservative' interests oppose Keystone. What they are seeing is the ravaging of their farming and ranching economies by years of outside 'investment' in various schemes: ethanol, gas fracking, etc.-- that is simply destroying their ecology. Next, they are seeing overall destruction of the underlying water resources and tables, so that now what is left (almost 60%, as I understand it, of the aquifier has been destroyed) is giving way. Partly because they were led down garden paths which did not describe the price in terms of total water resources. For years, professors at the ag schools, economists from the huge corporations and, now, oil and gas interests, tell them to step back and have faith in environmental and other promises which many of them simply do not believe. Neil, have you ever been out there? Sat around and talked to farmers and ranchers? Sure, there are maps which show thousands of miles of 'safe' pipelines, but anyone who lives out there knows that there are lots of 'off the radar' events that are destructive and Washington lobbies and incredibly powerful corporate interests make it hard to survive. The fact is that this Keystone project has been just another panacea for our energy needs, juiced by utterly wild job estimates, that may end up contributing little to our overall economic well being.
Ron Goodenow January 15, 2013 at 02:57 PM
Neil, for the sake of some transparency here I think it would be prudent to identify yourself as a manager at TransCanada. It is, of course, fair to put out corporate arguments, but in a case like this I do believe readers need to understand when they are made by folks who happen to agree with a particular business interest, and those who have big time skin in the game.
Andy Koenigsberg January 15, 2013 at 04:33 PM
What I find both disturbing and in fact, reprehsible about Neil Herizg's post and the repsonse to my blog posting is that Neil Herzig works for TransCanada and he did not have the wherewithal to tell readers that siginficant fact. It therefore does not surprise me that he has backed up none of his statements; has not refuted anything in the Cornell labor study; has avoided defending the operational history of the completed portions of the Keystone piepline; has been basically spouting the TransCanada corporate line. As many readers of my posts know, I used to be a petroleum geologist and therefore know the difference between heavy crude and bitumen. As I said in my post, if the material being transported from Canada were crude oil, why does it get exempted from oil transport fees? Seriously folks - I have no problem with a Neil posting his opinions, but at the very least, he should have been able to admit who he was representing, because it is now clear that it was not himself - it was his employer.
Ron Goodenow January 15, 2013 at 08:15 PM
Having worked with many companies, directly and as a consultant, I find it incomprehensible that Neil Herzig did not identify himself as a company employee, defending in public, as he did, a set of corporate business development ideas that are both controversial and subject to honest debate. Indeed, my reading of the TransCanada Code of Ethics suggests this should have happened. This raises questions about the ethics of the company in general -- are employees, often unidentified as such, off defending the company in their towns???? I also feel that the Patch editor should have picked up on this and asked about who he is and given him the opportunity to clarify his status appropriately. Patches are too loosey goosey. Beyond this, folks, there are many issues worthy of discussion. TransCanada has been highly aggressive in its eminent domain policies, has raised the ire of some of the world’s leading environmental experts (e.g., Bill McKibben), particularly with regard to the Gulf of Mexico, as well as strong conservative voices in the Midwest. It has hired a huge team of lobbyists on all sides of the political fence to protect and further its interests. There are ample press and other resources to back all this up. Finally, on the point of Boston Market. Were Boston Market wanting to set up shop in a lovely park near Neil’s home, or in the Westborough Rotary, we could honestly say that 20 employees is far too many. Keystone may be a case where 6,000 is far too many.
Neil Herzig January 16, 2013 at 05:50 PM
Well is seems that Mr. Koenigsberg and Mr. Goodenow want to make this about me rather than have an honest deliberation around the essence of the issue. My postings on this blog represent only my opinion. You can agree or disagree. However, to no surprise when one side is desperately looking for substance where there is little they will resort to personal attacks and making irrelevant arguments. Gentlemen, since you find my participation in this conversation “disturbing, reprehsible” (check your spelling, Andy) and “incomprehensible” then what’s the point of carrying this conversation any further? Feel free to blog one another.
PREDATOR January 16, 2013 at 06:33 PM
Neil...that was refreshing...thank you...but those two are too busy trying to set up tax shelters to protect themselves from the very taxes they advocate for.
Andy Koenigsberg January 16, 2013 at 07:05 PM
My bad on my spelling. Maxima mea culpa. Whether it's your own opinion or not - you violated your own company's code of ethic which states: "You should not speak publicly on behalf of TransCanada unless authorized to do so. Any posting or statement on an external web site, including personal sites or in other media should be considered a public statement." I did not personally attack you - I found your behavior reprehensible, not you. There is a difference. I have been trying to have an honest conversation on the issue but you have not been able to refute anything of substance that I have said or provide any references to back up your statements. You just keep on spouting the company line, even when I called you on it. Ron Goodenow can speak for himself.
Andy Koenigsberg January 16, 2013 at 07:14 PM
Well, if you think a mortgage, a 401K and an employer-sponsored flexible spending account are tax shelters, then I'm guilty as charged. Talk about having nothing of substance to contribute.
PREDATOR January 16, 2013 at 07:22 PM
Agreed. Mortgage is the way I went too....seemed the best way to keep money from the state.....see we agree.
Dennis Wilson January 16, 2013 at 07:39 PM
Neil, if your postings on this blog represent only your opinion, you should have disclosed that upfront. When I first read your comments, I wondered what is the financial motive behind someone labeling Koenigsberg's post "slanted arguments and mistruths against Keystone". Your failure to disclose undermined your positon.
Ron Goodenow January 16, 2013 at 08:33 PM
One doesn’t have to look very hard on the web to find statements similar to Neil’s made on behalf of Keystone by company officials who identify themselves and their positions openly. Readers deserve this and need to know what the company line is. If Andy and I worked for a competitor but did not so identify ourselves we would be in deep doo doo on all fronts. And sure, in addition to raising questions about the veracity of the poster, one can also raise others he didn’t address. That’s what happens on blogs. Once in the kitchen…. My understanding is that the writer is a risk management official and so I find it surprising that he would put out ANYTHING that raises serious questions that could reflect badly on a company or an employee. A simple ‘the writer is an employee of TransCanada, but the opinions are his own’ might have sufficed. But having worked with companies that take their legal and ethical standards seriously that would probably not have been possible and one would need to consult with the legal department or appropriate scientific experts. On a positive note, I read the company’s Code of Ethics and found it impressive. As for Predator, one can assume the usual swamp gas that results from any drilling he probably doesn’t understand and certainly doesn’t like. At least Neil has the guts to use his name.
Andy Koenigsberg January 16, 2013 at 09:06 PM
Never said we couldn't agree on anything. It snowed today, right?
Michael Gelbwasser (Editor) January 16, 2013 at 09:27 PM
Please stay on topic. Personal attacks don't advance the discussion.
SKK January 16, 2013 at 11:40 PM
While I think he should have made his affiliation with TransCanada known I do not see how it makes his views inalid. I think it makes the discussion more interesting because we have someone that is in the job discussing it with us. looking around on here there are many people that use any reason to make someones views invalid. He could counter by saying your "studies" are just a regurgitation of web facts and those studies could be payed for by anyone with an agenda. We can all find "studies" on either side of any issue. Does what he does for a living make any argument on oil invalid? I am in Real Estate so can I not comment on the housing market or similar topics as they come up? I try to comment on how I feel about things and after reading studies on either side I make a decision. Many people use left or right leaning sources to claim they are correct. I think we need to use the resources in this country better. I think we need to do it responsibly but I think it is irresponsible to the citizens if we do not and we just keep paying other countries for things we have right here at home.
SKK January 17, 2013 at 12:09 AM
So, I guess I ask a couple of simple quesions. Do we stop drilling for and transporting oil in the US because of the risk of a spill? Do we only buy it from other countries? Does it matter if a spill is in the US or the Middle East if that spill is still has an impact on the Earth? We need to heat our homes and fill our cars but because of the "potential" for a future spill we don't use our own resources? No one can say for SURE there will or will not be a spill. Just like no one can or cannot say for SURE there will not someday be a tyranical government. I think instead of inaction because of the hypothetical we do our best to use our resources and do it by knowing what could happen and doing our best to try and prevent it.


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something