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Thursday, July 07, 2011

Keystone Pipeline: Hollywood vs. Small Business?

Why is Hollywood actor Danny Glover against affordable, reliable energy for small businesses and consumers?

Glover and a variety of activists have announced that they are planning protests at the White House in August against the expansion of TransCanada Corp.’s Keystone XL pipeline.

The 1,300-mile Keystone pipeline transports crude oil from Alberta to Cushing, Oklahoma. TransCanada wants to expand the pipeline’s capacity, and extend it to Gulf Coast. The company’s proposal is before the U.S. State Department for approval.

A study published by the Canadian Economic Research Institute assessed the economic impact of investment in and production from the Canadian oil sands. CERI’s findings include:

• “For every two jobs created in Canada, one job will be created in the US.”

• “Total GDP impact of oil sands investment and operations over a 25-year period is estimated to be $521 billion for the US.”

• “Employment in the United States (direct, indirect, induced) as a result of new oil sands investments is expected to grow from 21,000 jobs in 2010 to 465,000 jobs in 2035.”

• “The states that benefit most from Alberta oil sands industry differ in investment and operation phases of the oil sands projects. States like California, Illinois, Texas, and New York, with big economies and large manufacturing sectors, receive the most benefit from oil sands projects in the investment phase.”

• “States like Illinois, Texas, Wisconsin, Washington, Ohio, Michigan, and Pennsylvania which are closely involved with Canadian oil sands trade, refining, services incidental to refining, and storage or transportation of oil sands – receive the most benefit from the Alberta’s oil sands industry at the operation phase.”

Expanding the Keystone pipeline would be a clear positive for the U.S. Nonetheless, activists will protest, and many believe that the State Department is dragging its feet.

In response, on June 23, the House Energy and Commerce Committee passed legislation by a vote of 33-13 requiring that the State Department reach a decision on the proposal by November 1. Among those voting in favor, by the way, were six Democrats – Reps. John Dingell (MI), Gene Green (TX), Mike Doyle (PN), Mike Ross (AR), Jim Matheson (UT) and John Barrow (GA).

Let’s hope the State Department and Obama administration in general ignore the likes of Danny Glover, and approve a project that will boost U.S. consumers, businesses, growth and jobs.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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