U.S. jobs from Canadian supplies

Posted: September 23, 2011
by Ken Cohen

Posted: September 23, 2011 by Ken Cohen

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There’s been some interesting commentary of late about how energy development in Canada could provide a genuine stimulus to the U.S. economy.

Recently, an editor at the Wall Street Journal wrote “Canada’s Oil Sands are a Jobs Gusher.” In that piece, Mary Anastasia O’Grady made a compelling point about how Alberta, a center of oil sands production in Canada, has handled the global economic slowdown better than most due in part to the Canadian government’s commitment to oil sands production.

“Canada has recovered all the jobs it lost in the 2009 recession, and Alberta’s oil sands are no small part of that,” she said. “The province is on track to become the world’s second-largest oil producer, after Saudi Arabia, within 10 years.”

But it’s more than just Alberta that can benefit from this “jobs gusher,” as O’Grady clearly points out. She reports there are about 960 American companies that support Alberta oil sands activities, with thousands more jobs that could be created if the U.S. would take steps to promote greater oil sands development – such as approving the Keystone XL pipeline.

The Keystone pipeline would carry Canadian oil from Alberta to U.S. refining centers along the Gulf Coast, creating jobs and providing steady and reliable energy supplies to Americans along the way. In fact, one study has estimated that greater oil sands development as a whole could support 600,000 U.S. jobs in 2035.

The potential for the U.S. to benefit from Canadian energy production is nothing new. President Obama, in a speech earlier this year, supported oil sands development – calling Canada a “stable and steady and reliable” source.

The Keystone XL project is an important part of getting those resources to the U.S., yet only recently have we seen any movement from the Administration on its plans to approve the project.

The State Department recently released its final “Environmental Impact Statement” on the Keystone XL pipeline, which addresses concerns expressed by those who have criticized this major energy infrastructure initiative, including:

Composition of the crude: The study found that the types of crude coming out of Canada are “similar in composition and quality to the crude oils currently transported in pipelines in the U.S. and being refined in Gulf Coast refineries.”
Ability to process and transport the crude: U.S. Gulf Coast refineries are successfully processing “heavy crude” similar to that already being imported from places like Mexico and Venezuela, according to the State Department. In fact, more than half of the crude oil imported by Gulf Coast refineries in 2009 was considered heavy crude.
Safety of the pipeline: The State Department concluded that the Keystone XL pipeline does not pose undue safety risks to people or land.
Environmental management: The report also notes that the industry has made significant strides in monitoring and managing air quality, land impact, and water quality in oil sands development. The State Department found that “Oil sands mining projects have reduced greenhouse gas emissions intensity by an average of 39 percent between 1990 and 2008 and are working toward further reductions.”

The next step in the project’s permitting process is a “National Interest Determination” – meaning, is it in the nation’s interest to grant a permit for the construction of this cross-border pipeline?

A recent piece by Robert Samuelson with The Washington Post answers that question:

“By all logic, the administration’s Keystone decision … should be a snap. Obama wants job creation. Well, TransCanada, the pipeline’s sponsor, says the project should result in 20,000 construction and manufacturing jobs. Most would be American, because 80 percent of the 1,661-mile pipeline would be in the United States. Continued development of oil sands would also help the U.S. economy; hundreds of American companies sell oil services in Canada. Finally, production technologies are gradually reducing environmental side effects, including greenhouse emissions.”

I’m sure I’m not alone in thinking that we have no greater “national interest” at this time than creating more jobs, attracting greater investment and promoting stable supplies of energy. Supporting greater development of Canadian energy is one way to do that.