The U.S. State Department recently took a step forward in the approval process for the extension and expansion of TransCanada Corp.’s Keystone XL pipeline.
The 1,300-mile Keystone pipeline transports Canadian sands crude oil from Alberta to Cushing, Oklahoma. TransCanada wants to expand the pipeline’s capacity, and extend it to Gulf Coast.
This project has been under review since 2008. The State Department issued its environment impact statement on August 26, which found that the pipeline would have no significant impact on the environment.
A number of news reports have labeled this project as “controversial.” But in reality, there’s nothing controversial about it. In fact, it’s only a small group of vocal hard-core environmentalists who have ginned up controversy. But these are the groups that oppose any efforts to expand the development and use of fossil fuels.
The State Department still has additional reviews regarding the project’s potential impact on the economy, energy security and foreign policy. A final decision is expected by year end. But with the environmental aspect of the review done, it’s hard to see how the State Department could view this project negatively according to the remaining criteria.
After all, from a foreign policy standpoint, we hardly have a better friend on the world stage than Canada. Indeed, our neighbor to the north is our biggest trading partner.
In addition, in terms of where we import oil from, Canada ranks number one. If we want to boost our energy security, increased imports from Canada can only be a plus.
Finally, the analyses done in terms of this project’s impact on our economy have all been positive. It was pointed out in an API statement, “By 2035, Canada's oil sands alone could generate close to $775 billion in GDP for the U.S. and support 600,000 American jobs, according to the latest report from the Canadian Energy Research Institute.”
API Refining Manager Cindy Schild added, “The nation’s quintessential shovel-ready project is a step closer to reality. That's good news for tens of thousands of Americans who stand to find new jobs when this pipeline project is finally approved. If the State Department gives the final okay, hiring could begin immediately in hundreds of American companies in the Midwest and across the country.”
And this means increased opportunities for small businesses. Consider, for example, that according to the latest Census Bureau data (2008), 98.6% of firms involved in supporting oil and gas operations have fewer than 500 workers, and 83.1% have less than 20 employees.
As for firms in the oil and gas pipeline construction industry, 94.7% have less than 500 employees, and 60.3% have fewer than 20 workers.
In the end, the Keystone XL pipeline project would be a big plus for energy security, the economy, jobs and small business. The State Department should move ahead with its final approval, as this project has been delayed for far too long.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.