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Keystone XL: A Lost Economic Opportunity

March 9, 2012 by Bernard L. Weinstein

Last January, President Barack Obama vetoed construction of the proposed Keystone XL pipeline that would transport oil from the Alberta oil sands to refineries on the Texas Gulf Coast. However he did invite TransCanada, the company that would underwrite and construct the 1,700 mile pipeline, to reapply for a permit using a different alignment. Alberta’s oil sands contain the second largest reserves in the world after Saudi Arabia. The anti-carbon crowd wants to kill the pipeline project, not because there are any serious issues regarding safety but because they believe that by stopping Keystone XL they’ll kill development of the oil sands. This is nonsense. If Canada can’t sell their oil to us, they’ll sell it to the Chinese and Japanese. It’s quite probable that the pipeline will eventually be built, though no decision will be made until after the November presidential election. In the meantime America is forfeiting a “shovel-ready” project that would have a tremendous economic impact while at the same time enhancing our energy security. The $7 billion construction budget would have boosted gross domestic product this year by almost $20 billion as this new spending turned over in the economy. More important, about 13,000 construction jobs and 7,000 manufacturing jobs would have been created directly while indirect and induced employment growth stimulated by the project could easily have reached an additional 50,000. During a time when good paying jobs are scarce, this influx of blue-collar work would have offered a lifeline to the unemployed.


Author

Bernard L. Weinstein
Bernard L. Weinstein

Bernard L. Weinstein is Associate Director of the Maguire Energy Institute and an Adjunct Professor of Business Economics in the Cox School of Business at Southern Methodist University. He has taught at Rensselaer Polytechnic Institute, the State University of New York, the University of Texas at Dallas, and the University of North Texas. He has authored or co-authored numerous books, monographs, and articles on the subjects of economic development, energy security, public policy, and taxation. His work has appeared in professional journals as well as the popular press. He earned an A.B. degree from Dartmouth College and an M.A. and a Ph.D. in economics from Columbia University.

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