As the Feb. 21 deadline approaches for the Obama administration’s decision on the Keystone XL oil pipeline, the project’s supporters have launched a new advertising campaign touting its job benefits. A full-page ad placed in the New York Times this week by the U.S. Chamber of Commerce urged the president not to say “no” to “20,000 jobs.” But that number isn’t as straightforward as it seems.
Twenty thousand jobs is the number used by TransCanada, the Alberta-based company that wants to build the pipeline. In a recent news release, TransCanada said the Keystone XL would create 13,000 direct construction jobs and 7,000 manufacturing jobs.
Opponents of the pipeline say TransCanada has inflated the number of construction jobs by ignoring two facts: That most of the jobs would be temporary, and that there’s a big difference between hiring people for varying periods of time and creating jobs.
Reports from two other sources—the U.S. State Department and Cornell University—say that no more than 6,000 jobs would be created by the pipeline, which would funnel up to 830,000 barrels of crude oil per day from the tar sands mines of Alberta, Canada to refineries on the U.S. Gulf Coast.
Much of the confusion centers around different definitions of what counts as a job.
To most people, the word “job” implies a year-round, full-time position occupied by a single person. But Jaclyn Houser, a spokeswoman for the Laborers’ International Union of North America, said construction jobs are usually temporary by nature, lasting anywhere from two weeks to several years.
Laborers’ International is one of several unions that have reached agreements with TransCanada to provide workers for construction of the Keystone XL.
The United Association (U.A.), a union of plumbers, welders and pipe fitters, has also come to an agreement with TransCanada. Tom Gross, the U.A.’s director of pipelines, told InsideClimate News that most of the construction would take place between April and December.
“As with any construction work, they ramp up during a 8 to 9 month work season and are laid off anywhere from 1 to 6 months in a year,” said U.A. Special Representative David Barnett.
Gross said pipeline workers often work long hours to complete their projects. “It would be common for a worker to work 2,400 hours or more in [nine months].” That’s the equivalent of working 48 hours a week for 50 weeks.
Barnett said some of the members might work both years, thus reducing the total number of people hired for the project.
That kind of working arrangement illustrates another source of confusion for the jobs numbers. Ethan Pollack, a senior policy analyst at the D.C.-based Economic Policy Institute, a non-partisan think tank, said job creation can be measured in two different ways: by the total number of people employed during the project, or by the number of person-years of employment. One person-year is equal to one person working full time for a single year.
Keystone XL could be built with either a smaller number of people working over a longer time period, or a larger number of people working over a shorter time period, he said.
TransCanada rarely uses the term “person-years.” For instance, last week’s press release refers to the “13,000 direct, on-site jobs” that would be created by the pipeline.
But in November, TransCanada CEO Russ Girling confused the issue when he told the Washington Post that Keystone XL would require 13,000 person-years of construction work.
“The important issue with person-years of employment versus jobs is that you actually identify which one you’re using and stick with it,” said Lara Skinner, associate director of research at Cornell’s Global Labor Institute. Skinner co-authored a Cornell study that says the Keystone XL would create just 5,060 to 9,250 person-years of employment.
Two people who each work six months on a job add up to one person-year, but TransCanada could count that as two jobs, Skinner said. “It’s misleading for TransCanada to use ‘person-years’ and equate it with ‘jobs.'”
If the company’s 13,000 “jobs” figure actually refers to person-years of employment, then the project would require an average of 6,500 workers per year for two years. That number is close to the one found in an Aug. 2011 report from the State Department (the federal agency in charge of pipeline review), which states that Keystone XL would require a construction workforce of 5,000 to 6,000.
The authors of the Cornell study used the same data as the State Department but concluded that the pipeline would create 5,060 to 9,250 person-years of employment, or 2,500 to 4,650 jobs per year over two years. Skinner attributed the difference to the fact that the State Department includes a number of workers that TransCanada has already hired, while the Cornell study addressed only new jobs from pipeline construction.
TransCanada spokesman Shawn Howard did not respond to questions about discrepancies in the company’s jobs figures. He said the State Department’s estimate of 6,000 workers refers to the “peak workforce”—the maximum number of people who would be working at any given time.
“You could have, depending on the activity, up to 6,000 people working on any given day,” Howard said. “So you will have 13,000 people working, they just all won’t be at the jobs site at the same time.”
In November, an analysis by Bloomberg Government compared the number of jobs TransCanada said the Keystone XL would create and the number of jobs the company created when it built another pipeline, simply called the Keystone. That pipeline began operating in 2010 and runs from Alberta to Oklahoma and Illinois.
The Bloomberg analysis found that TransCanada hired an average of 4 to 5 workers per mile to build the first Keystone pipeline. But if the company were to hire 13,000 construction workers for the Keystone XL, the number of workers per mile would rise sharply, to 6 or 7 per mile.
The study concluded that TransCanada either “intends to hire more workers [per mile] for shorter periods of time, or that the company’s construction crew and jobs figures are overstated, compared with earlier stages of the Keystone project.”
TransCanada did not respond to requests for comment.
Some pipeline supporters have chosen not to get involved in the controversy over the jobs figures. Spokeswoman Jaclyn Houser of Laborers’ International said her union “has been focusing on the individual people who would benefit” rather than the overall numbers. “Whether it’s 2,000 or 20,000 or 200,000—we’re just focused on the fact that 1.3 million construction workers are out of jobs.”
In Dec. 2011 the construction industry had a 16 percent unemployment rate, versus 8.5 percent for the nation as a whole.
“If the [pipeline] moves forward it will create thousands of jobs in some capacity,” Houser said. “And for a construction worker who’s been out of work for months or years, that’s a very valuable thing.”
Skinner of Cornell agreed that the jobs created by Keystone XL are “by no means insignificant, especially to the working people that receive these jobs.”
But Skinner said TransCanada needs to be upfront about the number of jobs and positions that the pipeline could create. The U.S. is facing high unemployment rates, she said, and the problem “should not be trivialized by TransCanada vastly overstating the number of jobs [from] Keystone XL…that’s just not fair given that they’re creating expectations that can’t be met.”