Keystone XL Pipeline Story

In July 2008, TransCanada Keystone Pipeline LP Ltd., announced Keystone XL, an approximately $7 billion pipeline project which would almost double the size and capacity of the company’s pipeline system connecting oil supply regions in Canada with U.S. refineries and distribution networks. The project comprises an approximately 1,661-mile, 36-inch crude oil pipeline stretching from Alberta, Canada, to the Gulf Coast Region in Texas.

Despite clear advantages in terms of job creation, cost improvement, and enhanced security, the project has not yet been approved by the U.S. Department of State. In fact, the permit review of the project was delayed by almost a full year from the originally announced schedule.

In a prior study, we determined that the total impact of the construction and development phases of the Keystone XL project on the U.S. economy would include (over the life of the project) $20.931 billion in total spending, $9.605 billion in output, and 118,935 person-years of employment. These were calculated at that time in constant (2009) dollars and rise slightly when adjusted to a 2011-dollar basis ($21.979 billion in total spending and $10.087 billion in output). The delays in the permitting process have cost business activity (on a net present value basis) of $1.19 billion in spending and $559 million in output, as well as postponing 88,622 person-years of employment. Job deferrals for states along the route vary, but most states have seen in excess of 5,000 person-years of employment (one person working for one year) delayed during a difficult economic period. View more on Ray Perryman Column.