On June 3, billionaire political activist Tom Steyer made numerous misleading and factually untrue statements about Keystone XL Pipeline, which were published in the Washington Post. We respect that Mr. Steyer has concerns about the project, however many of his claims are simply untrue. We offer our clarifications below to provide context and factually accurate information to address several of these claims.
Mr. Steyer’s claim:
“With Friday’s announcement that the Canadian provincial government of British Columbia opposes the transportation of tar sands oil over their lands . . . ”
The government of British Columbia has never once opposed “the transportation of tar sands oil over their lands. ” In fact, Kinder Morgan’s TransMountain pipeline has transported refined and unrefined crude products, including diluted bitumen from Alberta to British Columbia since 1953. The government of British Columbia publicly outlined five important conditions that must be met before it will be in a position to offer support for oil pipelines. The Northern Gateway project is a completely different project designed to serve completely different markets. The Keystone Pipeline system has its own unique market – American refineries in the U.S. Midwest and Gulf Coast. A significant portion of the oil that Keystone XL will transport comes from American oil fields in Montana, North Dakota, Oklahoma and Texas.
Mr. Steyer’s claim:
“ . . . it simply made no sense on the policy merits to allow a pipeline that would enable massive greenhouse emissions. ”
Firstly, the crude delivered by Keystone XL will displace crude being shipped to U.S. Gulf Coast refineries on oil tankers coming from Venezuela, Mexico and Saudi Arabia. Keystone XL will offset as many as 200 ocean tankers per year, reducing GHG emissions by as much as 19 million metric tons. According to analysis conducted by renowned climate scientist, Paul Knappenberger, the carbon dioxide emissions resulting from the use of the oil carried by the Keystone XL Pipeline (operating at full capacity) to produce energy lies somewhere between 0.00001°C and 0.0001°C per year. Pipelines produce the fewest amounts of emissions to move oil to the markets where it is needed.
Secondly, Mr. Steyer conveniently ignores the fact that 70 per cent of emissions are the result of the burning of fossil fuels and other industrial processes. Driving vehicles, operating manufacturing facilities, heating our homes and transporting goods and services to markets around North America – that is where the majority of emissions come from. Very little actually comes from the extraction of oil from the Earth.
Finally, GHG emissions from the oil sands constitute just 0.1 per cent of estimated global GHG emissions. For context, there are two coal-fired power plants in the State of Georgia that produce more emissions than the entire oil sands industry. He may also want to look into the production of heavy oil in his own state of California, since that oil has a larger carbon footprint than oil from the Canadian oil sands.
Mr. Steyer’s Claim
“ . . . it simply made no sense on the policy merits to allow a pipeline that would . . . do almost nothing for our economy. ”
Keystone XL supports the creation of more than 20,000 jobs in the U.S. – 13,000 construction jobs (9,000 KXL, 4,000 Gulf Coast Project) – work for pipefitters, welders, electricians, heavy equipment operators and more. It also supports 7,000 pipe-related manufacturing jobs from the pipe being manufactured in Arkansas, pump motors made in Ohio and transformers built in Pennsylvania. Workers in almost every state in the U.S. would benefit.
Let’s not forget the tax windfalls enjoyed by states and counties. In 2012, the Keystone pipeline property tax valuation was more than $535 million in Nebraska alone.
Keystone XL will inject $20 billion into the U.S. economy, increase Americans’ personal income by $6.5 billion and lead to more than $585 million in state and local taxes in states along the pipeline route.
A new study by Creighton University economist Ernie Goss found that TransCanada will spend $570.5 million directly in Nebraska during the operational period of the pipeline (2015-2029), Keystone XL will generate $580.2 million direct construction spending by TransCanada during the construction period of the pipeline (2013-2014) while the construction and operation of the Keystone XL pipeline will add approximately $1.8 billion to the overall economic activity in Nebraska.
That is economic stimulus even a billionaire can appreciate.
Mr. Steyer’s Claim
“[Approving Keystone XL would] slow our own move to research-based advanced energy independence that will generate hundreds of thousands of American jobs.”
Mr. Steyer continues to peddle the false dichotomy between fossil fuels and renewable energy in an attempt to stifle a pragmatic, fact-based debate. Fortunately the majority of Americans, including President Barack Obama , know that a diverse and robust energy mix leads to greater energy security.
TransCanada also supports this position and has already invested billions of dollars in the production of emission-free energy, including nuclear, wind, hydro and solar power, and we will continue to develop less carbon-intense sources of power in response to the needs of the North American market.
Mr. Steyer’s Claim
“The U.S. is now an exporter of oil, and the Keystone oil will be piped across the Midwest down to the Gulf of Mexico where it will then be shipped as a cheap source of energy to our economic competitors in Asia, including China.”
This deceptive claim is partly misleading and partly patently false.
Today, the United States still consumes 15 million barrels of oil a day and imports eight to nine million barrels, or close to 60 per cent of its needs. The EIA (Energy Information Administration) forecast in 2012 the U.S. will continue to import 7.5 million bbl/d into 2035 to meet its needs.
It simply doesn’t make sense for companies to purchase cheaper Canadian crude, ship that product overseas while continuing to import higher priced oil from the Middle East and Venezuela for refineries on the Gulf Coast to deal with the eight to nine million bbl/d that must be imported.
Mr. Steyer’s Claim:
“The pipeline will generate profits, but profits overwhelmingly for foreign companies. The project will generate as much as $3.9 billion in additional revenue for foreign oil companies.”
Keystone XL’s economic benefits will be felt throughout the United State. As stated previously, the project will inject $20 billion into the U.S. economy, increase Americans’ personal income by $6.5 billion and lead to more than $585 million in state and local taxes. But more than that, energy trade between Canada and the U.S. supports tens of thousands of jobs in the U.S. and will continue to grow for the next two decades. More than 2,400 American companies supply goods and services to Canadian oil sands and pipeline companies, companies such as Caterpillar, Mathey Dearman in Tulsa, Okla., and Hella Inc. in Peachtree, Ga.
The Canadian Energy Research Institute (CERI) released a report in June 2011 that analyzed the economic impacts of the oil sands between 2010 and 2035 on both Canada and the United States; some key findings are:
- States such as California, Illinois, Texas and New York, which are closely involved with Canadian oil sands trade, refining, services incidental to refining, and storage or transportation of oil sands – receive the most benefit
- States such as Illinois, California, Texas, New York and Wisconsin – with big economies and large manufacturing sectors, receive the most benefit from the oil
- Total GDP impact of oil sands investment and operations over a 25-year period is estimated to be $775 billion for the United States. U.S. employment, as a result of all oil sands projects, is expected to grow from 21,000 jobs in 2010 to 465,000 jobs in 2035.
Mr. Steyer’s Claim:
“In fact, it appears that among the few Americans who would actually financially benefit from the building of the pipeline are the Koch Brothers . . . and in Canadian regulatory filings one of their subsidiaries declared that it had a “direct and substantial interest” in the construction of Keystone.”
This is a red herring of the worst variety, deliberately misleading and deceptive. The “Koch Brothers” are not a customer of Keystone XL, so even though Mr. Steyer talks about how they will profit from its approval, they are not shipping product to their U.S. refineries through our pipeline network. If Mr. Steyer had bothered to examine the regulatory filing of Keystone XL in Canada he would have found 29 organizations and individuals filed for “Intervenor Status” including the Sierra Club.