There would be tens of thousands of jobs created if President Barack Obama approved the Keystone XL pipeline.
Republicans already have some things they’d like to do when they assume full control of Congress in January. Plans include reforming the tax code, renewing the fight against Obamacare and approving the Keystone XL pipeline, according to a Wall Street Journal editorial by House Speaker John Boehner and current Senate Minority Leader Mitch McConnell. Fox and Friends fill-in host and reporter Anna Kooiman honed in on the latter initiative during a post-Election Day discussion about the GOP leaders’ plans. "And if you would just approve the Keystone XL pipeline, there would be tens of thousands of jobs created," Kooiman said Nov. 6, addressing President Barack Obama. The job-creation argument behind the controversial pipeline is one fact-checkers have reviewed many times. The bottom line: Keystone isn’t the massive jobs generator that some make it out to be. TransCanada’s project shuffling a heavy crude oil mixture from Western Canada to Steele City, Neb., has long been on hold pending a review by Obama and the State Department, which must determine if it "serves the national interest" because it crosses an international border. The pipeline would connect with an existing southern leg that opened in early 2014, delivering more than 800,000 barrels of oil to refineries on the Gulf Coast. As far as new jobs go, the State Department estimates the operation of the pipeline will only create 35 permanent, full-time jobs and 15 temporary contractors. The full-time workers would be "required for annual operations, including routine inspections, maintenance and repair." Some would work in a Nebraska field office. The lack of many full-time positions makes sense, given that the project is to build a pipeline so that tar sands can travel without the need of rail cars or ships. There are, however, temporary jobs that would be supported by building the $8 billion pipeline over one or two years. Over the course of up to two years of construction, the State Department estimates a total of 42,100 jobs "would be supported by construction of the proposed project." Some jobs are directly tied to the pipeline and construction. Other jobs are simply a nature of how spending $8 billion ripples out into the economy. And more than 99 percent are temporary. The State Department figures construction would require around 10,400 seasonal workers for stretches that would last either four or eight months. This works out to 3,900 "average annual" jobs over one year of construction, or 1,950 jobs each year if the project takes two years to finish. Construction work would be spread over four states, Montana, South Dakota, Nebraska and Kansas, though most workers would be specialized and need to be brought in from outside those states, the report notes. TransCanada counts direct job creation a little differently, estimating about 9,000 overall positions for construction and manufacturing. These are not measured on an average annual basis, but on an overall basis. TransCanada argues this makes more sense because the nature of construction work is for contractors to move from one job to the next, even if it does not last for a year at a time. "We’ve always talked about the positions because that’s what we cut the paychecks for," said TransCanada spokesman Shawn Howard. By either estimate, the number of direct pipeline jobs created is not in the tens of thousands. To get there, you need to also include indirect and induced "spin-off" jobs. Indirect jobs are a result of goods and services purchased by construction crews. Induced jobs are jobs created by workers spending their wages in the economy. The State Department estimates that 26,100 indirect and induced jobs "would be supported by construction of the proposed project" during the construction phase. The jobs would be in providing the supply chain to Keystone as well as employee spending on lodging, food, entertainment, health care, etc. The State Department calls these jobs "supported" and not created because it includes jobs that already exist. Put it all together and you get very few permanent jobs, about 10,000 or so temporary jobs in construction and another 26,000 more temporary spin-off jobs that could be created or supported. Two additional notes: According to The Globe and Mail newspaper of Canada, the pipeline extension’s cost has risen from $5.4 billion to $8 billion. But it’s unclear if higher costs can be associated with more jobs, said Ian Goodman, president of the Goodman Group Ltd. energy and economic consulting firm. Goodman co-authored a 2011 report questioning the project’s employment potential. The increased cost factors in inflation and financing costs. "The higher costs now being estimated by TransCanada may just be paying more dollars for a similar amount of actual work and materials to build the project." There’s still no word on when the State Department may announce its recommendation on the project. "We gave up guessing on that a while ago," Howard said, "but the facts on the project haven’t changed." Our ruling Kooiman said the Keystone XL pipeline would create "tens of thousands of jobs." A State Department review found the project could support -- not create -- 42,100 jobs. But that number needs considerable explanation and does not amount to tens of thousands of full-time jobs in the most common sense of employment. The figure represents the project’s estimated direct, indirect and induced jobs over two years of construction, and all but 50 are temporary. The State Department and TransCanada have different ways of accounting for jobs needed for the building phase, but neither estimate is in the tens of thousands. And some of the remaining indirect and induced jobs supported by subcontractors and employee spending may already exist, so that’s not exactly jobs creation as much as jobs enhancement. Kooiman’s claim is based on a seed of truth but lacks critical information. We rate it Mostly False.
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