Keystone XL

Consumer energy group's Whatley discusses pipeline's job-creating potential

With President Obama making headlines this week on the future of the Keystone XL pipeline and its job-creating potential, industry, consumer and environmental groups are all weighing in on the accuracy of the jobs numbers. During today's OnPoint, Michael Whatley, executive vice president at the Consumer Energy Alliance, explains why he believes jobs estimates are higher than those cited by the president. He also weighs in on why jobs numbers among Keystone supporters and industry groups are so varied and have changed since the State Department's initial review of the project.


Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Michael Whatley, executive vice president of the Consumer Energy Alliance. Michael, thanks for coming on the show.

Michael Whatley: Thank you very much for having me on.

Monica Trauzzi: Michael, the President made news earlier this week with comments he made on the Keystone XL pipeline, specifically relating to the job creation potential of the project. The numbers he cited in an interview with The New York Times are somewhat different than those that were previously cited by the State Department. So in the interview he said the pipeline may create maybe 2,000 jobs during construction and then 50 to 100 afterwards. What do you think the motivation was behind the remarks and the specific numbers that he cited?

Michael Whatley: Well, I don't know what the President's specific motivation was in terms of why he wanted to talk about how this would not necessarily be a significant job creator. Certainly this is a major construction project, you know, $5.3 billion dollar investment in the US economy by TransCanada without any federal funding or loans or anything along those lines. And $2 billion of that is going to go directly into wages. When we look at the job creation numbers that TransCanada has put out, they match up very well with what the State Department put out in the last version of the environmental reviews that they've put in there. TransCanada has said all along that this project is going to create about 9,000 jobs, and this is very similar to the 9,000 jobs that were created when they built the first Keystone project very similar in length, very similar in terms of a two-year construction job. So I think that those were numbers that the State Department was relying on in the draft supplemental EIS, and those are what we're going to be working from.

Monica Trauzzi: So that's not all entirely true, because when we had Russ Girling on the show, the TransCanada CEO, back in the fall of 2011, here's what he said: "We know exactly how many people are going to be needed to construct our pipeline. About 13,000 jobs are created. As well we know the parts and pieces that we need, pumps, 7,000 people will be employed doing this. So 20,000 we're pretty darned sure about that number." That's what he cited in 2011. How did that number then change?

Michael Whatley: Well, the number changed when the President rejected TransCanada's application for the Keystone XL project. They ended up breaking off the Oklahoma, Cushing, Oklahoma down to Houston part of that, which is now known as the Gulf Coast project, and 4,000 of those workers are actually working on the project now. Of the remaining 16,000, TransCanada has stated 7,000 would be used in construction manufacturing for the pipeline, for both parts of that project, and that 9,000 of them would be put to work on constructing Keystone XL.

Monica Trauzzi: So CEA did its own assessment, and your assessment found 5,500 jobs during construction, and 302 afterwards. How did you get to those numbers?

Michael Whatley: That was a study that was done by a Dr. Ernie Goss from Creighton University. We commissioned that study. And he looked at just the impacts that were going to take place in Nebraska associated with the construction, and that's both direct and indirect jobs.

Monica Trauzzi: So the timing of this is pretty interesting, because the interview happened, this New York Times interview that the President did, it happened at the same time that the President was sort of in the midst of making all of these economy and jobs creation speeches throughout the country. And he said in the interview that there's no evidence that this project will be a big job creator. How do we really define what a big job creator means?

Michael Whatley: I would certainly say that 9,000 jobs, or 20,000 jobs when you consider the total length of the Keystone project, that's very significant. And the State Department has said that it is going to support a grand total of 42,100 jobs, not all of them directly related with the pipeline. I think when you're looking at our economy right now, having a project that's going to put $20 billion into increased economic activity and create, whether it's 2,000 jobs or 9,000 jobs, that's very significant. I spend a lot of time out in Nebraska working with labor leaders and working with folks that are the pipe workers that built the first Keystone pipeline out there, they want these jobs, they need these jobs, and they've been very focal throughout their leadership with all the public meetings and consistently telling the administration these jobs are terribly important. So I think that at the end of the day to say that this is not a major job creator is a bit of a misnomer.

Monica Trauzzi: So the President specifically cited that Republicans say that this has the potential to create many jobs, but there are both Democrats and Republicans in Congress that support the pipeline. Is he making this a partisan issue?

Michael Whatley: Well, I think that there's a lot of focus that people want to make this a partisan issue, but it just doesn't work that way. There are several governors, democratic governors who support this project. There are several democratic senators and folks in the House of Representatives. In fact, the last vote that we saw in the Senate had 62 votes for it. So there is strong national bipartisan support for this. And that goes even beyond elected leaders. In the latest polls where we've seen 60, 65 percent of the national support for this, 56 percent of Democrats support it as well. So this is a strong bipartisan support.

Monica Trauzzi: So we focused on about two or three sentences that the President had said during that interview, but ultimately the overarching point that the President seemed to be making on Keystone XL circled back to the climate piece, that he's going to be looking at the impacts of the pipeline on climate change. And the symbolism of the pipeline really remains on climate. So do you think that final decision will ultimately rest on the climate impacts?

Michael Whatley: I don't think it'll rest solely in climate change. It is a determination of whether or not this project is in the national interest, and that certainly has to take into account our relations with Canada, it has to take into account the employment, the jobs, the factors, the fact that this will be the safest pipeline ever built in North America. But when you look at climate change I think it's very important to note that the State Department has said that this will not significantly contribute to carbon emissions. They have said that whether or not the pipeline is built there's going to be development of the oil sands there. We've done an analysis that shows that the oil that would be coming down from this pipeline will be 60 percent less carbon intensive than oil coming over from Saudi Arabia on a boat. So the climate change story we think is pretty good. The overall national interest discussion, we feel very strongly that this is in the national interest.

Monica Trauzzi: If TransCanada is able to build up its green profile a bit, which has been discussed, do you believe that there is enough there for the President to make the case then to his environmental supporters?

Michael Whatley: Well, look, the environmental groups that supported the President and opposed this pipeline are not going to be satisfied no matter what decision is made. If the President says yes, no matter what excuses or reasons that he were to deliver to it, straight out they oppose this pipeline, they do not want to see the oil sands developed, and there's not really going to be any placating them. But I think for the average American voter and for the folks that support this pipeline, and also support a clean healthy environment, the fact that this will be the safest pipeline ever done, it won't contribute substantially to carbon emissions throughout the globe, and it's going to help reduce gasoline prices and create jobs here in the United States, those are the important factors the President needs to take into account.

Monica Trauzzi: All right, we will end it right there. The debate certainly continues. Thank you for coming on the show.

Michael Whatley: Absolutely.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]



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