Report reveals true cost of Keystone XL: Staggering public costs vs private benefits

  • Published on March 13th, 2012

Kalamazoo river, still cleaning up from tar sands oil

By Bill McKibben .

Cornell’s Global Labor Institute issued a big new report [PDF] this morning examining the proposed Keystone XL pipeline, the most comprehensive look yet at its economic impact. And it makes clear just how right President Obama was to block this boondoggle: It would make money for a few politically connected oil companies, but at a potentially staggering cost to the American economy.

For once economists looked at the whole effect of the project. Unlike studies paid for by the TransCanada pipeline company that purported to show thousands of jobs created (a number since walked back to “hundreds” of permanent positions even by company spokespeople), this study asks: What happens when there’s a spill?

Not if there’s a spill. There’s going to be a spill — the smaller precursor pipeline recently built by TransCanada spilled at least 14 times in its first year of operation, once spewing a geyser of tar-sands oil 60 feet into the air. In fact, the new Cornell report estimates that we can expect 91 significant spills over the next half century from Keystone, in large part because the bitumen it would carry south from Alberta is like liquid sandpaper, scouring the steel of the pipe.

And when the spill happens? In 2010, a six-foot gash in a tar-sands pipeline let a million gallons of crude pour into the Kalamazoo River. Fifty-eight percent of people in the area reported adverse health effects from the evaporating oil; the river is still closed; clean-up costs are likely to be higher than $700 million. The pipeline’s owner had to buy out more than a hundred homes and relocate the residents. Multiply by 91.

And remember that the Keystone XL pipeline would cross the Ogallala Aquifer, source of 30 percent of the nation’s irrigation water, not to mention many of its farming jobs. The six states the pipeline would run through would together reap about 20 permanent jobs from Keystone XL; together those states employ more than half a million farmers. Do the math. And then remember something else: Renewable energy jobs are growing at twice the rate of the rest of the economy. If a wind turbine topples over, that’s bad news, but it doesn’t turn the aquifer black.

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Here’s a new video from NRDC about the Kalamazoo spill:

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  • David Lange


    Your numbers are misleading. You said a half million farmers could be affected by an oil spill. I read the Cornell report and it states, “Approximately 571,000 workers are directly employed in the agricultural sector in the six states…”. These workers are not all farmers.

    I have shared your story on my FaceBook page and am getting hammered by my conservative friends over your statistics!

    • Jeremy Bloom

      How is that misleading? If an oil spill destroys the basis for agriculture on the plains states, every single one of those agriculture workers would be affected. What’s your issue?

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  • Karl Moore

    As long as McKibben pumps the Obama campaign, his warnings will ring hollow no matter how valid they might be. Obama’s only stated objection to the Keystone XL was it’s route. He’s also expressed approval of pieces of the pipeline, now under construction. Sorry Bill, you make some good points but the Keystone XL is a ‘done deal’, as Hillary Clinton said, unless we can vote the corporatists out of office – BOTH Republicans and Democrats.

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  • Chris Bommer

    I am worried for people like you who are trying to block this pipeline because you clearly have an unrealistic view on liquid fuel and its relation to our societal structure. Do you know how much oil America imports? Do you know that sometimes we have to import it from some places that don’t like us very much? Thanks for blocking us from friendly sources of oil imports so we can keep funding the terrorists you bonehead. That’s a nice little piece about wind turbines and renewable energy you wrote there at the end, but you forgot to mention that wind turbines don’t produce liquid fuel. Read up on peak oil so you aren’t energy illiterate. We are facing a liquid fuels crisis. It’s misinformed writers like yourself who are blinding the public to the real danger this country faces, which is the peaking of daily world oil production.

    • Kotiya

      Are you aware that the United States has been exporting more petroleum than it imports? Are you aware that the Keystone pipeline will be shipping ALL of its oil to the other side of the planet, and the United States won’t even be getting tax revenue from it? We will in NO way benefit from it, and we will suffer the catastrophes that will absolutely result. If you are concerned about the rising price of gas and think this pipeline will save you five cents a tank, I suggest you read up on oil speculation and how that is driving up the price of oil above and beyond what it is actually valued on the market.

      As for liquid fuel, well, you should also read up on alternative energy sources that address this. One of the most promising sources is, in fact, algae. It can be farmed on land unsuitable for agriculture, using seawater and wastewater, and supplies up to 30 times as much fuel as the next best biofuel crop. It could very easily supply all of the United State’s petroleum fuel needs, covering 0.42% of our land area, about half of the size of Maine, which is less than 15% of the land we use to grow corn. Not bad at all, considering it offsets its own carbon footprint, and it’s harmless if spilled. It’s versatile, too, supplying biodiesel, bioethanol, biogasoline, and biobutanol. We’d be supporting our own farmers instead of…any other country.

      One of the greater problems with fossil fuels, is they are very toxic–to our land, air, atmosphere, water, and organic life, including us. These resources are essential, and we have been steadily destroying and poisoning them. We should have never allowed ourselves to get to the point where we are fracking shale and tar sands, as this completely destroys the land and the water table for what is essentially a very small net energy benefit. Peak oil will happen eventually (nowhere nearly as soon as the oil industry would want you to believe), but by utilizing renewable energy such as solar and wind, we can greatly postpone peak oil.

      Unfortunately, as long as we allow private companies and wealthy individuals to endanger the entire planet for their own profits, we will never see our technology advance and utilized to the point of sustainability.