Who benefits from revived Keystone XL and Dakota Access pipelines?
President Donald Trump announced Tuesday that construction would move forward on the Keystone XL and Dakota Access pipelines, both of which had stalled under the Obama administration. The decision was a blow to environmental activists and supporters of tribal sovereignty, but was touted by the White House as a great boost to the American economy.
As for who could benefit from the completion of both pipelines, the potential winners are many and varied. Here’s what diverse constituencies stand to gain -- or lose -- once the projects go forward.
Workers
President Trump on Tuesday predicted the revived projects would create 28,000 jobs in the U.S. But job claims for Keystone XL, the larger of the two, have been all over the map. TransCanada, the owner of the pipeline, said in 2011 that it would create 20,000 direct jobs in the U.S. and support an additional 118,000. The State Department, in a review that ultimately denied the project permit, noted that a total of 42,000 jobs would be created directly and indirectly during the pipeline’s construction, which is estimated to take a year.
Of those 42,000 predicted jobs, just 3,900 would be full-time construction jobs for one year. However, fact-checking outfits that include the Washington Post have cast doubt that so many jobs would be created -- the news organization put the actual figure closer to 16,000 indirect jobs, and concluded that even if the figure were 42,000, it would not have a significant impact.
For comparison, last year the economy created an average of just under 180,000 new jobs every month.
Job estimates for the Dakota Access pipeline are harder to come by. Most of the project is already constructed; all that remains is a piece that would pass under Lake Oahe, a source of drinking water for the Standing Rock Sioux tribe, which has opposed the pipeline for that reason.
Once the pipeline is operating, maintaining it would support 160 jobs in the region, according to an economic report prepared for the Dakota pipeline owners, Energy Transfer Partners. As for Keystone XL, it would need a mere 50 people to maintain it -- 35 employees and 15 contractors -- according to TransCanada.
Small towns in the Plains
During construction, towns along the pipeline’s path are likely to see local booms in business, as workers spend money on lodging, food and entertainment. This has already happened along the Dakota Access corridor. However, like the construction jobs that fuel it, the boom is temporary.
The projects would also increase local tax revenue. Once the Dakota Access pipeline is operational, it will generate about $55 million in property taxes, split across four states, according to estimates. Construction of Keystone XL would cause a short-term tax revenue increase (primarily from sales and use taxes) of $66 million. Once the pipeline is operating, 27 counties will collect an additional $56 million in taxes. The pipeline won’t affect property values, according to the government.
U.S. steel industry
Mr. Trump has directed that companies working on the pipelines use pipes made from U.S. steel. “It’s going to put a lot of workers, a lot of steelworkers back to work,” he said. The industry has lost about 16,000 jobs in the last two years, mostly due to competition from China.
Canada
TransCanada -- as its name indicates-- is a Canadian company, which is why the State Department was tasked with reviewing the project to begin with. Company shares rose nearly 4 percent upon Mr. Trump’s announcement. (Shares of Dallas-based ETP rose a similar amount Tuesday.)
Trump, who announced a new America First policy, has awarded the first major US infrastructure project (Keystone XL) to a Canadian company.
— Ryan Lizza (@RyanLizza) January 24, 2017
The environment
Economic-impact statements surrounding oil projects are usually created with the assumption that they will never break, burst or spill. It’s an assumption that is often proven false -- and costly. Cleaning up oil spills costs on average $16 per gallon, according to Resources for the Future, a nonprofit that focuses on environmental issues. But the range of costs varies enormously -- from $630 a gallon to $7 a gallon -- based on where the cleanup occurs, such as land or water, urban or rural areas.
The five-year cleanup of BP’s oil spill in the Gulf of Mexico, starting in 2010, cost the company $62 billion. That doesn’t include the cost of decreased tourism, diminished wildlife and land that becomes unusable. It also doesn’t account for potential long-term health effects.
Mr. Trump himself?
Until last year, Donald Trump was an investor in Energy Transfer Partners -- but he sold all of his stock holdings in June, his transition team told reporters last month. His share in Energy Transfer Partners was valued in May 2016 at between $15,001 and $50,000, down from a value range of $500,000 to $1 million a year earlier.
Mr. Trump is not required to file another disclosure form until later this year. So far, he has not provided documentation of the divestment.
Asked Tuesday to reassure the American public there was no conflict of interest given the president’s former business ties, White House Press Secretary Sean Spicer first seemed to suggest that such a small investment was of no consequence for a man who is said to be worth billions.
“Thousands of dollars for a guy who’s a multi-billionaire, isn’t, I don’t think that’s at the top,” he said, before being interrupted. He then said, “by law, he can’t have conflicts.”