Biden Administration Admits Keystone Cancellation Cost Tens of Thousands of Jobs

Pipes to be used for the Keystone XL pipeline are stored in a field near Dorchester, Neb., in this Dec. 18, 2020 photo. Chris Machian /Omaha World-Herald via AP

The Biden administration has released a congressionally required report on the jobs impact of the president’s decision to cancel the Keystone XL Pipeline, which reveals a failed opportunity to create tens of thousands of jobs.

The report (pdf) was published without fanfare in late December by the Department of Energy (DOE) after being mandated to do so by provisions in the Infrastructure Investment and Jobs Act, which required the agency to evaluate how many jobs would have been created absent Biden’s decision to axe the pipeline.

Biden signed an executive order on his first day in office that halted the Keystone XL project, saying the pipeline “disserves the U.S. national interest” as its construction and operation would be inconsistent with his administration’s larger agenda to tackle a “climate crisis.”

President Joe Biden participates in a conference call with the Major Economies Forum on Energy and Climate in the South Court Auditorium in the Eisenhower Executive Office Building in Washington, on Sept. 17, 2021. Al Drago/Getty Images

The report concludes that, had Biden not cancelled Keystone XL, the project would have created around 50 permanent jobs once the pipeline became operational and between 16,149 and 59,469 temporary jobs each year over a two-year period of construction.

The DOE said, however, that it believes the upper bound of 59,469 overstates the job creation potential of the project as this number includes jobs in Canada and sections of the Keystone pipeline that were outside the XL segment.

The report cites the final Supplemental Environmental Impact Statement from 2014 that estimated the Keystone XL pipeline project would support a total of 42,100 jobs (direct and indirect) and create roughly 3,900 direct construction jobs in Montana, South Dakota, Nebraska, and Kansas over what was expected to be two years of construction.

Miles of unused pipe, prepared for the proposed Keystone XL pipeline, sit in a lot outside Gascoyne, N.D., on Oct. 14, 2014. Andrew Burton/Getty Images

Estimates of the economic benefits of the project in terms of impact on gross domestic product (GDP) ranged from $9.61 billion to $3.12 billion.

Business sales estimates ranged from $20.93 billion to $6.01 billion.

The DOE noted in the report that the economic impacts varied “significantly among the studies and are not directly comparable due to large differences in modeling assumptions.”

The effect on consumer prices of Biden’s decision to revoke the permit was “inconclusive” because of fluctuations in crude oil prices since the project was proposed.

Sen. Steve Daines (R-Mont.), whose state would have been a major beneficiary of the project, issued a statement reacting to the release of the report.

“The Biden administration finally owned up to what we have known all along—killing the Keystone XL Pipeline cost good-paying jobs, hurt Montana’s economy and was the first step in the Biden administration’s war on oil and gas production in the United States,” Daines said.

“Unfortunately, the administration continues to pursue energy production anywhere but the United States. These policies may appeal to the woke left but hurt Montana’s working families,” he added.

Biden’s decision to revoke the Keystone XL permit was hailed by his supporters and many environmentalists.

Opponents of the Keystone XL pipeline demonstrate on a pedestrian bridge during rush hour in Omaha, Nebraska, on Nov. 1, 2017. The pipeline was cancelled by U.S. President Joe Biden immediately after entering office in January 2021. The Canadian Press/AP, Nati Harnik

Many Republicans and industry groups criticized Biden’s move, with some saying it would lead to job losses.

Days after Biden moved to revoke the permit, the GOP’s official Twitter account estimated that the cancellation would eliminate 11,000 jobs in the United States “at a time when millions of Americans need work.”

The premier of Alberta, Canada’s biggest oil producing province, said that Biden’s decision to cancel the pipeline would kill thousands of union labor jobs in both Canada and the United States, while making America more dependent on foreign “dictatorships” for its energy needs.

Canada-based energy company TC Energy, the project owner, said that Biden’s move “would directly lead to the layoff of thousands of union workers and negatively impact ground-breaking industry commitments to use new renewable energy as well as historic equity partnerships with Indigenous communities.”

TC Energy has stated publicly that it does not plan to revive the Keystone XL project.