The Biggest Fallacy of the Keystone Pipeline Approval Fight

The battle over the Keystone pipeline has become one of the foremost issues in Washington today.

That's the problem.

The great fallacy of the Keystone pipeline is that whether it gets built or not is much less important than craven politicians in Washington would have you believe.

keystone pipelineFor six years, TransCanada Corp. (NYSE: TRP) has sought approval to build the northern leg of the Keystone XL pipeline. The 1,179-mile project would bring crude oil from the tar sands of Canada to U.S. refineries on the Gulf Coast.

Both Republicans and Democrats have turned up the rhetoric on the Keystone pipeline mainly to serve selfish political interests.

"The political fight about Keystone is vastly greater than the economic, environmental, or energy impact of the pipeline itself," Robert N. Stavins, director of the environmental economics program at Harvard, told The New York Times. "It doesn't make a big difference in energy prices, employment, or climate change either way."

Keystone XL Pipeline Fight: What's Wrong with Washington

And this battle has dragged on for six years. All the time wasted debating the Keystone XL pipeline could have been devoted to dealing with some of America's more pressing problems. You know, stuff like tax reform, immigration, trade reform, the $18 trillion national debt, maybe some help for the struggling middle class.

But no.

In fact, the fight over the Keystone pipeline is a perfect example of what's wrong with Washington. Instead of a government that solves problems we have long, bitter partisan battles over the trivial.

A bill approving construction of the pipeline passed the House of Representatives Jan. 9. Now the Senate is working on its version. The bill passed a procedural vote Monday. But Senate Democrats are intent on adding multiple amendments, which will results in hours of floor debate.

And President Barack Obama's threat of a veto may make matters worse. The House could easily override a veto, but the Senate is four votes shy. A GOP crusade to override a veto could go on for weeks - or even months.

More wasted time.

To see how low our elected representatives have sunk, we're going to look at the all the claims and counter-claims they're making about the Keystone pipeline.

It's amazing they can keep a straight face when they're saying these things...

The Fallacies of the Keystone Pipeline Exposed

A recurring theme in the Keystone debate is that few are lying outright. What they do is use data selectively and exaggerate its impact.

Here's the truth on the main issues:

Keystone Pipeline Fallacies: Jobs

Republican proponents see the Keystone pipeline as a jobs bill. They say building it will generate more than 40,000 jobs. Opponents of the pipeline counter that the project will generate just 35 to 50 jobs.

And they're both right. Not only that, but both figures come from the same paragraph of the State Department's 2013 study on the impact of the pipeline.

The State Department estimates that the construction of the Keystone pipeline will generate 42,100 jobs. But those would not be permanent jobs. Most would result from the construction itself. The figure also includes indirect jobs created by the purchase of goods and services by the construction companies.

Once built, the State Department said Keystone will support just 50 jobs. And 15 of those would be "temporary contractors" (hence the figure of 35 permanent jobs cited by opponents).

So while the Keystone pipeline would give the country some construction jobs - and that is worth something - long-term it's not a jobs bill.

Keystone Pipeline Fallacies: Climate Change Impact

Most Democrats (save for a few from states that would benefit from the Keystone XL pipeline) oppose the project for environmental reasons.

That's because environmentalists - a key source of Democratic support - have made stopping the Keystone pipeline a holy crusade. They say that construction of the pipeline will make climate change worse, and that a spill would cause catastrophic environmental damage.

Opponents also like to quote former NASA scientist James Hansen, who said in 2011 that it would be "game over" for the climate if the pipeline were built.

Those in favor of the project say the Canadian oil will get pumped and moved with or without Keystone. So not building it would have little to no effect on climate change.

The Environmental Protection Agency estimates that the oil from the Keystone pipeline would add 18.7 million metric tons of carbon to the atmosphere each year.

But as scary as that sounds, it would only increase U.S. greenhouse gas emissions by less than 1%. And it would be a very tiny amount of the global total.

So Keystone's impact on climate change would be negligible.

Opponents sometimes counter that the pipeline will "open up" unconventional oil to exploitation. But that ship sailed years ago, both in Canada and the United States.

As for spills, a pipeline is the safest form of transporting oil. The main alternative, rail, is more prone to dangerous spills although they tend to be smaller. More and more Canadian oil is moving by rail rather than wait for the Keystone XL pipeline.

Keystone Pipeline Fallacies: Energy Independence

There's lots of verbal fog in this area.

Republicans also like to talk about how importing oil from Canada for refining in the U.S. will promote North American energy independence from less reliable nations. They also claim that the Canadian oil will lower U.S. gas prices.

But the United States already gets most of its imported oil from neighbors Canada and Mexico. And the shale oil boom in the U.S. has increased domestic oil production to historic highs. America doesn't need Keystone for energy independence.

Critics say that most of the refined gasoline will be exported and so won't reduce gas prices in the U.S.

While an exact figure is impossible to determine, Money Morning Global Energy Strategist Dr. Kent Moors says it's likely that more than 60% of the refined Canadian oil would be exported.

But more to the point, Dr. Moors notes that gas prices are set by global supply and demand, not the output of a single pipeline.

It's way past time Congress put the Keystone pipeline behind it - one way or the other.

"I just don't understand," Sen. Brian Schatz, D-Hi. Said on the Senate floor. "The legislation is not deserving of being the No. 1 priority of the 114th Congress."


The Bottom Line: The fallacy of the Keystone pipeline fight is that it is not worth all the time spent fighting over it. Both sides have misused facts to sway public opinion. The nation would be best served by a quick resolution to this issue.


Congress in 2015: While partisan sniping never stops in Washington, it is possible the parties will find a way to work together on some big issues this year. Both sides have incentive to get something done ahead of the 2016 elections. If any deals are made, they'll be on these issues...

Follow me on Twitter @DavidGZeiler.

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About the Author

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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