Report: Southern Leg of Keystone XL Has Been a Job Creator, Generated Economic Growth

Sections of pipe sit on the ground in Atoka, Oklahoma
Photographer: Daniel Acker / Bloomberg
Image via U.S. Chamber of Commerce

 by Sean Hackbarth, Contributing Author: Critics like Tom Steyer’s Next Gen Climate operation wants you to believe that the Keystone XL pipeline will only create a few dozen jobs. However, after looking at the construction of the southern leg of the pipeline, the truth is far different.

A new report finds that construction of the 485-mile Gulf Coast Project, stretching from Cushing, Oklahoma to Nederland, Texas, created thousands of jobs and added billions to local economies. The Gulf Coast pipeline is the portion of the proposed Keystone XL pipeline that was able to be built because it didn't require a Presidential Permit. It is helping improve the transportation of oil sands crude to Gulf Coast refiners - the same crude that Keystone XL will carry.

The report, prepared by Southern Methodist University's Maguire Energy Institute for the Consumer Energy Alliance, found that in Oklahoma and Texas, the project resulted in

• Over $5.7 billion in new economic activity.
• Over 42,000 person years of new employment.
• Over $217 million in additional state and local taxes.

The authors write:[T]he Gulf Coast Project pipeline contributed substantially to the economic health of most of the counties along the alignment during the 2012-2014 construction period. In the years ahead, recurring expenditures for operations and maintenance of the pipeline will continue to support jobs while generating income and tax revenues for Oklahoma, Texas and the 24 affected counties.Counties in Oklahoma where the pipeline was construction saw an average per capita income increase of 78%. Three counties—Seminole, Hughes, and Coal—saw over 90% increases. For counties in Texas, the average per capita income increase was 58%.

On a press call, Bud Weinstein, an economics professor at Southern Methodist University’s Cox School of Business and one of the reports’ authors noted that "most of these counties are comparatively low-income, rural counties.” Construction of the Gulf Coast Project has been a "tremendous economic tonic." For instance, the report finds “pipeline activities averaged 31 percent of personal income” in Oklahoma.

During construction, TransCanada spent about $6 million per month directly in the local community. Here are some examples of local entrepreneurs taking advantage of the business opportunities the pipeline's construction offered:For instance, Clifford Bryant, a local entrepreneur in Prague, Oklahoma, reports that construction of the pipeline “doubled our city sales tax receipts.” Clifford bought a mobile RV and trailer park when he heard that TransCanada would be bringing a construction yard to town for its Gulf Coast Pipeline Project. Previously, only 11 of the 57 spots in the park were occupied. Once construction began, all 57 were occupied. Clifford notes that a full RV park contributes as much as $8,000 a month in electricity fees alone to the municipal utility.

In the Southeast Texas town of Kountze, Jeremy Kunk’s Ready Ice Company sold approximately 30,000 pounds of ice per week to pipeline construction sites in its area. The ice improved safety by keeping workers cool and hydrated. Kunk expects that the economic boost supplied by pipeline projects will be long-lasting. “Pipeline construction such as TransCanada’s Gulf Coast Pipeline Project is going to feed our refineries more product and keep us hopping for the next five, 10 years at least.”

Joe Penland is another Texas business owner who benefited from TransCanada’s pipeline construction. Joe owns Quality Mat Company in Southeast Texas. His company partnered with TransCanada to make the Gulf Coast Project safer. With a patented concept, Penland fabricates more than 250,000 mats per year in his facility inside the Beaumont city limits. He leased the mats to TransCanada during construction of the Gulf Coast Pipeline in Oklahoma and Texas.Positive benefits would extend to more states if the northern leg of the pipeline, linking Alberta to Nebraska, were approved by the Obama administration. “Similar state and local economic benefits can be anticipated should the United States give the go-ahead for construction of the Keystone XL pipeline from Hardisty, Alberta to Steele City, Nebraska,” the authors write.

"I would expect similar impacts" to those found in Oklahoma and Texas if the northern leg of the Keystone XL pipeline is approved, Weinstein said on the press call.
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Sean Hackbarth is a policy advocate and blogger at U.S Chamber of Commerce. He is a contributing author at the  ARRA News Service.

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