Fact checking Keystone jobs claims

Keystone debate: What's at stake?
Keystone debate: What's at stake?

Supporters of the Keystone XL Pipeline herald it as a job-creating machine, producing as many as 119,000 jobs.

But only 3,900 workers will actually be required to build the pipeline to carry oil from Canada to the Gulf of Mexico, according to the U.S. State Department, and those jobs will only last for a year. There will be 35 permanent positions created.

TransCanada (TRP), the company seeking permission to build the pipeline, claims the effort will create 13,000 construction jobs.

But even TransCanada only expects that building the pipeline will take about 7 million hours of labor. That works out to about a year's worth of work for 3,400 workers. If the work were spread evenly across 13,000 workers, it would only mean three months of work for each.

While the Senate failed to pass a measure approving the pipeline by a single vote Monday night, the debate on the project is not over. Republicans vow to bring back the measure in January, when they'll have majority control of the Senate and chances for passage will be better.

The estimates that call for Keystone to add many more thousands of jobs to the economy include both direct construction jobs as well as indirect jobs stemming from businesses that those workers and construction companies spend money with.

Related: Keystone pipeline dies in the Senate - for now

In a report on the pipeline issued in January, the state department said it expects that Keystone will indirectly create about 38,000 jobs, in addition to the 3,900 construction jobs.

The most bullish forecast for jobs comes from a 2011 report from Texas research firm, the Perryman Group. It came up with the 119,000-job estimate.

But that estimate includes job growth due to an economic boost that was expected from lower oil prices. Keystone was supposed to help boost oil production in Canada, which would lower prices.

But oil prices are already down nearly 20% in the last year to a four-year low, even without the pipeline. Increased U.S. oil production, lower consumption due to improved fuel efficiency in U.S. cars as well as slower economic growth in China and other developing markets have pushed prices down.

Former EPA chief: Keystone XL will be built
Former EPA chief: Keystone XL will be built

And it's not clear that building the pipeline will push oil prices much lower. It probably wouldn't make sense to boost production in Canada with oil prices so low, since extracting and cleaning that oil costs so much.

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