Fox Anchor Pushes Claim That Keystone XL Pipeline Would Create 20,000 Jobs

Fox Anchor Martha MacCallum: 20,000 Jobs Is “The Low-End Estimate.” On America's Newsroom, host Martha MacCallum said:

MACCALLUM: The keystone pipeline would be privately-funded. That means no taxpayer cash. It would carry oil from Canada all the way down to the Gulf Coast giving us a massive new resource of energy in this country. 20,000 jobs would be created, that's the low-end estimate. Now Republicans are asking why the president would not support that plan and the jobs that it promises?

[ ...]

MACCALLUM: So obviously, you know, it would create jobs. It would also add energy resources to this country. So why is he sticking his neck out on this, you know, and going against it? [Fox News, America's Newsroom, 12/8/11]

To see Fox's previous efforts to inflate the number of jobs that might be created by the Keystone XL pipeline, click here

But That Figure Is Wildly Inflated

TransCanada Said In 2010 That Keystone XL Pipeline “Is Expected To Create Over ... 13,000 New Jobs For American Workers.” In a 2010 press release by TransCanada, the company funding the Keystone XL pipeline, touted their connection with various unions and claimed they would “create over seven million hours of labor and over 13,000 new jobs for American workers.” From the press release:

TransCanada Corporation (TransCanada) (TSX, NYSE: TRP) today is pleased to announce a Project Labor Agreement for a significant portion of U.S. construction of the proposed US$7 billion Keystone Gulf Coast Expansion Pipeline Project (Keystone XL). The agreement will provide TransCanada with a capable, well-trained and ready workforce in the U.S. to construct Keystone XL. During construction, the project is expected to create over seven million hours of labor and over 13,000 new jobs for American workers. [TransCanada, 9/14/10]

Wash. Post: Based On TransCanada's Numbers, “The Number Of People Employed” Would Actually Be 6,500. A November 5 article in The Washington Post reported that TransCanada CEO Russ Girling “said Friday that the 13,000 figure was actually not a true job number, but actually accounted for 'one person, one year.'” The Post added that “if the construction jobs lasted two years, the number of people employed in each of the two years would be 6,500.” From the article:

A key question for the administration is how many jobs the Keystone XL project would create. TransCanada's initial estimate of 20,000 -- which it said includes 13,000 direct construction jobs and 7,000 jobs among supply manufacturers -- has been widely quoted by lawmakers and presidential candidates.

Girling said Friday that the 13,000 figure was “one person, one year,” meaning that if the construction jobs lasted two years, the number of people employed in each of the two years would be 6,500. That brings the company's number closer to the State Department's; State says the project would create 5,000 to 6,000 construction jobs, a figure that was calculated by its contractor Cardno Entrix.

As for the 7,000 indirect supply chain jobs, the $1.9 billion already spent by TransCanada would reduce the number of jobs that would be created in the future. The Brixton Group, a firm working with opponents of the project, has argued that many of the indirect supply jobs would be outside the United States because about $1.7 billion worth of steel will be purchased from a Russian-owned mill in Canada. [The Washington Post, 11/5/11]

State Department: “The Construction Work Force Would Consist Of Approximately 5,000 To 6,000 Workers.” The U.S. Department of State's Final Environmental Impact Statement for the pipeline stated that a “construction work force would consist of approximately 5,000 to 6,000 workers.” The contractor who conducted the study had financial ties to TransCanada; the inspector general has launched an investigation into the matter. From the report:

During construction, there would be temporary, positive socioeconomic impacts as a result of local employment, taxes on worker income, spending by construction workers, and spending on construction goods and services. The construction work force would consist of approximately 5,000 to 6,000 workers, including Keystone employees, contractor employees, and construction and environmental inspection staff. That would generate from $349 million to $419 in total wages. An estimated $6.58 to $6.65 billion would be spent on materials and supplies, easements, engineering, permitting, and other costs. [U.S. State Department, 8/26/11]

Cornell University Global Labor Institute: Based On TransCanada's Numbers, “The Project Will Create No More Than 2,500-4,600 Temporary Direct Construction Jobs.” From Cornell University Global Labor Institute's report:

A calculation of the direct jobs that might be created by KXL can begin with an examination of the jobs on-site to build and inspect the pipeline. The project will create no more than 2,500-4,650 temporary direct construction jobs for two years, according to TransCanada's own data supplied to the State Department. [Cornell University Global Labor Institute, September 2011]

Cornell University Global Labor Institute: “Based On The Figures Provided By TransCanada For The Canadian Section Of The Pipeline, The New Permanent US Pipeline Jobs In The US Number As Few As 50.” From Cornell University Global Labor Institute's report:

[T]he potential job impacts associated with KXL construction are quite small, both absolutely and certainly relative to the employment levels estimated by the Perryman study. In comparing these results with those from the Perryman study, it is useful to keep in mind that even results based on the Perryman study would be much lower, once they are adjusted for more realistic project cost assumptions.

Starting with the Perryman study total employment estimated for project construction (119,000 person-years), the Perryman results can be adjusted for more realistic project cost assumptions. Also starting with the $6.6 billion in project costs assumed by Perryman, and adjusting for the $5.4 billion project cost for KXL in the US, the adjusted Perryman result is about 97,000 person-years. Next, instead of assuming a $4 billion KXL US project cost not yet spent, the adjusted Perryman result drops to about 72,000 person-years. And finally, assuming a $3 billion KXL US cost not yet spent or committed, the adjusted Perryman results drops again to 54,000 person-years.

So even if it is assumed the Perryman study provides a reasonable estimate of job impacts per dollar spent on pipeline construction (i.e. 18 person-years per $1 million), total job impact will be much lower than the Perryman results once a more realistic budget is assumed for project construction. And whatever is estimated for total employment impacts, it must be spread over the relevant period in order to meaningfully estimate annual impacts. For KXL construction, the relevant period is at least two and perhaps more likely three years.

In this context, it is also important to consider that almost all of the jobs (direct, indirect and induced) associated with Keystone XL will, of course, also be temporary. The operating costs for KXL are very minimal, and based on the figures provided by TransCanada for the Canadian section of the pipeline, the new permanent US pipeline jobs in the US number as few as 50. [Cornell University Global Labor Institute, September 2011]

Cornell University Global Labor Institute: “The Effects Of KXL Construction Could Very Well Lead To More Jobs Being Lost Than Are Created.” From a section of the Cornell University Global Labor Institute report titled “Four Ways Keystone XL Could Be A Job Killer”:

The industry-generated jobs data are highly questionable and ultimately misleading. But this is only part of the problem. These industry-generated data attempt only to tell the positive side of the KXL jobs story. There is evidence to suggest that the effects of KXL construction could very well lead to more jobs being lost than are created. In this section, we show four ways that jobs can be destroyed or prevented by KXL -- higher petroleum prices, environmental damage such as spills, the impact of emissions on health and climate instability, and the chilling effect KXL approval could have on the emerging green economy.

[...]

Put simply, KXL's job creation potential is relatively small, and could be completely outweighed by the project's potential to destroy jobs through rising fuel costs, spill damage and clean up operations, air pollution and increased GHG emissions. [Cornell University Global Labor Institute, September 2011]

ThinkProgress Chart Reveals “TransCanada's Wildly Inflated Jobs Promises.” On November 4, ThinkProgress published the following chart based on the high-estimate of Cornell Global Labor Institute's report and the TransCanada commissioned Perryman Group's report:

[ThinkProgress, 11/4/11]