Editor's Note: The Keystone Pipeline has created one of the biggest political debates of the last five years. And you're about to hear a lot more in the media as the we move closer to the State Department's final ruling on the project.
But what is the truth about Keystone? And where are the lies hidden? More importantly, where can we invest to exploit its ongoing political soap opera?
We've asked one senior energy analyst to write the following exposé on the pipeline. He asks not to be identified because this analysis is so controversial.
What you'll find in today's segment, and the two that follow, will shock you. If you want to finally know who really benefits from Keystone – and how this one single project could keep energy sector growth stagnant – then read on…
The Keystone XL Pipeline saga should be laid to rest in the coming months when the U.S. State Department issues its final ruling on the project.
One would be hard-pressed to find a business issue that's more politically polarizing and contentious. Politicians on both sides of the aisle have used it to bludgeon their opponents, often with little evidence to support their claims.
The Planning Wrinkle That Complicates the Issue
The key issues are the long- and short-term economic effects of not only the pipeline, but the additional oil it will deliver. Over the next several days, I'll explain the true consequences of the project for jobs, energy prices, and the economy overall.
The proposed Keystone XL pipeline expansion would bring a hefty 830,000 barrels of oil per day from Canada's Oil Sands to the Gulf Coast by way of Steele City, Nebraska. The project was first proposed in 2008. Many similar pipelines have crisscrossed the American landscape since then.
But because its proposed route has the misfortune of crossing the border between the U.S. and Canada, unlike all of those other projects, Keystone must be approved by the federal government. Solely because of this planning wrinkle, Keystone has become a political football so abused that by this point its pigskin must be wearing thin.
Republicans have shouted that it must be approved for the sake of jobs, while Democrats have screamed that Keystone will essentially create no jobs, and destroy the environment to boot. They're all wrong, and I'm going to tell you why.
Real Issues Versus Political Red Herrings
Pipeline company TransCanada and its boosters on the Right claim that Keystone will create about 16,000 construction, manufacturing, and other jobs in America through direct spending. They say it will support a combined total 42,000 U.S. jobs counting the "ripple effects" it will have throughout the economy.
While these numbers come directly from the estimates in a report by the Obama Administration's State Department, you won't hear the Left mention them.
Instead, the project's hard Left opponents cite a different part of the same State Department report, which notes that on completion of the two-year construction project, Keystone XL will only need 35 permanent employees plus another 15 temporary contractors. That's a paltry sum, particularly in light of the increased environmental cost the Left asserts we will pay for burning oil from the dreaded "tar sands" of the Great White North.