The Impact of Tar Sands Pipeline Spills on Employment and the Economy

The Impact of Tar Sands Pipeline Spills on Employment and the Economy

Report Overview

In debates over proposed tar sands pipelines such as the TransCanada corporation’s Keystone XL, little attention has been given to the potentially negative impacts of pipeline spills on employment and the economy. The proposed route for the 1,700-mile Keystone XL pipeline cuts through America’s agricultural heartland, where farming, ranching, and tourism are major employers and economic engines. Ground or surface water contamination from a tar sands oil spill in this region could inflict significant economic damage, causing workers to lose jobs, businesses to close, and residents to relocate. Such a spill could also negatively impact the health of residents and their communities.

A Closer Look at Keystone XL’s Threat to Existing Jobs and Economic Sectors:

» The negative impacts on employment and the economy of tar sands pipelines like the Keystone XL have largely been ignored. To date, a comprehensive risk assessment for the proposed Keystone XL pipeline oil spill has not been conducted. Such an assessment would provide an independent review of the risk of spills and their economic consequences. Since the first Keystone pipeline began operation in June 2010, at least 35 spills have occurred in the U.S. and Canada. In its first year, the spill frequency for Keystone’s U.S. segment was 100 times higher than TransCanada forecast.

» The Keystone XL pipeline would cut through America’s breadbasket. Agricultural land and rangeland comprise 79 percent of the land that would be affected by the proposed Keystone XL pipeline. It would cross more than 1,700 bodies of water, including the Missouri and Yellowstone rivers and the Ogallala and Carrizo-Wilcox aquifers. The Ogallala Aquifer alone supplies 30 percent of the groundwater used for irrigation in the U.S. It also supplies two million people with drinking water.

» Farming, ranching, and tourism are major sources of employment along the Keystone XL pipeline’s proposed route. Water contamination resulting from a Keystone XL spill, or the cumulative effect of spills over the lifetime of the pipeline, would have significant economic costs and could result in job loss in these sectors. Approximately 571,000 workers are directly employed in the agricultural sector in the six states along the Keystone XL corridor. Total agricultural output for these states is about $76 billion annually.

» Many of the land areas and bodies of water that Keystone XL will cross provide recreational opportunities vital to the tourism industry. Keystone XL would traverse 90.5 miles of recreation and special interest areas, including federal public lands, state
parks and forests, and national historic trails. About 780,000 workers are employed in the tourism sector in the states along the Keystone XL pipeline. Tourism spending in these states totaled more than $67 billion in 2009.

» Recent experience has demonstrated that tar sands spills pose additional dangers to the public and present special challenges in terms of clean up. There is strong evidence that tar sands pipeline spills occur more frequently than spills from pipelines carrying conventional crude oil because of the diluted bitumen’s toxic, corrosive, and heavy composition. Tar sands oil spills have the potential to be more damaging than conventional crude oil spills because they are more difficult and more costly to clean up, and because they have the potential to pose more serious health risks. Therefore both the frequency and particular nature of the spills have negative economic implications.

» The Kalamazoo River tar sands spill affected the health of hundreds of residents, displaced residents, hurt businesses, and caused a loss of jobs. The largest tar sands oil spill in the U.S. occurred on the Kalamazoo River in Michigan in 2010. This spill is the most expensive tar sands pipeline oil spill in U.S. history, with overall costs estimated at $725 million.

» The public debate around Keystone XL has focused almost exclusively on job creation from the project, yet existing jobs and economic sectors could suffer significantly from one or more spills from Keystone XL. According to the U.S. State Department, the six states along the pipeline route are expected to gain a total of 20 permanent pipeline operation jobs. Meanwhile, the agricultural and tourism sectors are already a major employer in these states. Potential job losses to these sectors resulting from one or more spills from Keystone XL could be considerable.

» Renewable energy provides a safer route to creating new jobs and a sustainable environment. The U.S. is leading the world in renewable energy investments, and employment in this sector has expanded in recent years. For every $1 million invested in renewable and clean energy, 16.7 jobs are created. By contrast, $1 million invested in fossil fuels generates 5.3 jobs.

The full report can be downloaded here:http://www.ilr.cornell.edu/globallaborinstitute/research/upload/GLI_Impact-of-Tar-Sands-Pipeline-Spills.pdf

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