President Obama’s Keystone XL Veto Draws Praise, Fire

President Obama’s Keystone XL veto “Keystone XL Pipeline Approval Act” on Feb. 24 drew praise and fire. This is the third veto of his presidency. The president said, “Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.

“The Presidential power to veto legislation is one I take seriously. But I also take seriously my responsibility to the American people. And because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest—including our security, safety, and environment—it has earned my veto.”

Critics of the veto say that it is a stall tactic and that it jeopardizes 42,000 new jobs. Speaker John Boehner even called the act a “jobs bill,” adding in a tweet, “It’s a disgrace for Pres. Obama to talk middle-class economics & then veto middle-class jobs.”

Metals Service Center Institute (MSCI) President and CEO M. Robert Weidner, III criticized the veto on the basis of energy independence, saying, “The pipeline would also help ensure a reliable flow of affordable energy for the U.S. metals and manufacturing industries. The president’s veto is a step away from U.S. energy independence ….”

As expected, environmental groups such as the National Wildlife Federation and Natural Resource Defense Council (NRDC) lauded the veto but view it as only an intermediary step in the right direction. The Sierra Club urged followers to thank the president, and “urge him to finish this by rejecting Keystone XL once and for all.”

Legislators opposed to the pipeline maintain that any economic benefits it offered would not be worth the environmental price. Rep. Keith Ellison tweeted, “KeystoneXL pipeline risks our land, air & water for profits that will be mostly exported. I applaud the president’s veto.”

Bipartisan Report’s criticism of the pipeline was harsher and dismissed the jobs benefits claim. “KeystoneXL would provide 35 jobs, cheap oil for China, and profits for the Koch brothers.”

Jobs: 42,000 or 35?

So where does the disparity of claims of 42,000 jobs versus 35 jobs originate? The employment count is well-explained in Glenn Kessler’s Washington Post article, “Will Keystone XL pipeline create 42,000 ‘new’ jobs?”

“The Keystone SL pipeline is a construction project, and so most of the direct jobs are related to construction. These are basically short-term jobs, lasting on average 19.5 weeks …” Over two construction seasons, Montana, South Dakota, and Nebraska would each need to hire 2,700 to 4,000 construction workers; Kansas about 20, for a total of 10,400 construction workers, Kessler said.

Because of uncertainty as to how long the installation would last, the State Department calculates all of the jobs as an annual figure. “So those 4,000 construction workers in Montana who work for 19 weeks were turned into nearly 1,500 jobs on annual basis.” That’s why the State Department estimates the construction employment figure as 3,900 jobs—one position that is filled one full year—even though none of the jobs actually last a year, the article maintains.

Some of the additional jobs originate from $3.3 billion in construction contracts and materials, Kessler continued. About 16,000 jobs, including those in steel mills, pipe producers, welders, and other fabricators, would stem from direct spending on those materials, according to department estimates—though not all of them are from U.S. fabricators and producers. “For instance, workers in Arkansas have already built about half of the high-strength line pipe needed for the project, some 333,000 tons. (The rest would come from Canada, Italy, and India.) Those are clearly jobs that can be attributed to the project, though in the case of the pipe, the work is already done, according to a TransCanada spokesman, Mark Cooper.

“But the other 26,000 jobs are more fuzzy—what are termed “indirect and induced spending,” Kessler wrote. These are jobs stemming from the purchase of goods and services by contractors and by employees working for a supplier.

The State Department’s report carefully uses the term support to describe the estimated 42,100 average annual jobs. “It’s not really “42,000 new jobs,” Kessler said. “In fact, some of those jobs have already been completed in anticipation of the project; ‘42,000 new jobs’ is going too far … it’s hard to argue they are new. Moreover, under State’s accounting, they only last for a year.”