The Distribution Contractors Association (DCA) is describing President Biden’s decision to rescind the cross-border permit for the Keystone XL pipeline as an unfortunate way to start an administration in the midst of a global pandemic.
Many in the energy industry see the president’s move, which was one of some 30 executive actions on the first day of his administration, as the death knell of a critical project that has been in large demand for several years.
“Completing the construction of the Keystone XL pipeline would have created 10,000 good-paying American union jobs,” said Rob Darden, chief executive at DCA. “More than $2.2 billion in wages would have been paid under a Project Labor Agreement with four unions. Instead, the president just put a lot of people out of work at a time when American jobs are needed most.”
Keystone XL would have transported more than 800,000 barrels of oil a day from Alberta, Canada to the Texas Gulf Coast. The decision to revoke the cross-border permit, which is considered the death knell of the project, comes at a time when 300 miles of the 1,200-mile project have been already been constructed.
“A wide range of construction contractors were involved in the building of Keystone XL, including at least five DCA contractors, and several equipment manufacturers and distributors,” said Dale Mykyte of Pe Ben USA and past DCA president. “The project owner was ready to award over $3 billion in contracts awarded to American contractors and suppliers with all new steel pipe made in America. Now, after the president’s executive action, our company will have to cut 600 jobs related to the Keystone project along with a considerable percentage of our office staff.”
In addition to delivering needed energy, Keystone XL offered significant environmental protections, including operating with net-zero emissions using 100% renewable power. The project owner had also established a $10 million Green Job Training Fund for union workers, leaving many questioning the wisdom of President Biden’s decision.
“The bottom line is that pipeline transportation is the safest, most environmentally sound way to transport energy,” said Ben Nelson of Michels Pacific Energy and current DCA president. “Unfortunately, the president’s decision will mean hundreds of millions of dollars lost for our members and thousands of jobs with it. The impacts of this action reach way beyond those companies participating in the project – this hurts all sectors of the energy industry. We’re doing all we can to keep our people on the job. The last thing we should be doing is cutting jobs from an already struggling economy.”
The termination of Keystone XL is shortsighted on many levels, starting with impacts on the environment. Even government analysis shows that pipelines emit significantly less emissions compared to other modes of transportation. Denying construction of Keystone XL will inevitably result in moving American energy delivered by train, truck or other transportation modes, bringing greater emissions, increased pollution and more congestion on American roads and highways.
The immediate economic consequences are not lost on DCA’s leadership.
“The ramifications of President Biden’s action on Keystone XL will not be limited to job loss in our industry,” Nelson added. “This will hurt Americans who rely on transportation of energy for their homes and businesses, as well as the people doing the work to make that happen. President Biden needs to take a hard look and evaluate the consequences of this political decision.”