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Our Misplaced, Undemocratic Budget Priorities: The Case of Keystone XL

Keystone XL or local infrastructure: What government budget priorities best reflect democratic concerns and create long-term jobs?

Keystone XL Pipeline Protest at White House, November 6, 2011. (Photo: tarsandaction)

Several years ago, political economist Robert Reich asked a rhetorical question that bears repeating: “Wouldn’t it be better to have a jobs program that created things we really need – like light-rail trains, better school facilities, public parks, water and sewer systems and non-carbon energy sources – rather than things we don’t, like obsolete weapons systems?”

For many of us, the question of government priorities seems like a no-brainer. After all, shouldn’t ending poverty – estimated by the Census Bureau to affect 15 percent of people living in the US – be a paramount concern? Shouldn’t caring for the sick; building low-cost housing; creating jobs; educating children, teens and young adults; making clean water and nutritious food available and affordable; promoting the development of clean, renewable energy; and ridding the environment of toxins and hazards trump everything else?

Depends on who you ask.

The proposed Keystone XL Pipeline is a case in point. As projected, the TransCanada Corp.-owned Pipeline will transport 800,000 barrels of crude tar sands oil a day from Alberta to the Gulf of Mexico, a total distance of 2,100 miles. While supporters tout the plan as decreasing US dependence on Mideast oil and say that it will create hundreds of thousands of well-paying jobs, environmentalist are skeptical. They argue that the risks outweigh the benefits and say that the money to construct it would be far better spent on supporting the nation’s essential infrastructure.

In fact, two environmental justice groups, The Labor Network for Sustainability and Economics for Equity and Environment, better known as the e3 Network, contend that the government should nix the proposed Pipeline and instead rebuild and maintain the nation’s crumbling bridges, tunnels, roads and railways. In a report released in late 2013, The Keystone Pipeline Debate: An Alternative Job Creation Strategy, researchers assessed the proposed Keystone XL. Widely criticized by environmentalists – they believe it will exacerbate climate change by escalating emissions, raising sea levels and increasing global temperatures – its proponents repeatedly stress that it will provide decent jobs to people desperate for them.

Among Keystone XL’s primary boosters is the American Petroleum Institute, a nearly 100-year-old trade association representing the oil and natural gas industries. Jack Gerard, API’s president and CEO, recently told the press that Keystone XL not only will reduce US dependence on Mideast oil, it “will create good, middle-class jobs for thousands of the safest, most highly trained workers in the building trades and will expand access to secure supplies of Canadian crude oil that will be processed in state-of-the-art refineries here in the US.” How many jobs? By Gerard’s count, 20,000 will be created immediately, with another 117,000 added by 2035. At other points API has claimed a larger number: 300,000. Why the change? It’s anybody’s guess, and Gerard did not elaborate. Later, when asked about pollution, his answer was surprisingly brief: “The risks to the environment are minimal,” he said.

API’s web site adds some additional fodder: “The US and Canada enjoy the largest trading partnership across the largest peaceful border in the world. Getting more US energy from our friendly North American neighbor could reduce reliance on energy resources from less stable regions while enhancing domestic energy and national security.”

Like API, the editors of the conservative Reason Magazine are similarly effusive about Keystone XL’s promise. “The project is absolutely in our nation’s interest,” they editorialized. “The proposed K-XL Pipeline will have no significant environmental impacts. It will create jobs now when we need them most. It will help bolster economic growth and provide energy security.”

To hear them tell it, it’s nothing but rainbows, sunshine and apple pie; if you don’t know better, these claims sound quite compelling.

Sadly, the authors of The Keystone Pipeline Debate conclude that they are largely untrue, with the jobs claims, in particular, being grossly inflated. They home in on the five states along the Keystone XL’s route, Montana, Nebraska, Oklahoma, South Dakota and Texas, and suggest that rather than building the pipeline, the government should focus its attention on long-neglected gas, sewer and water systems. According to the report, “America is facing an infrastructure crisis. Unmet water and gas infrastructure capital investment and operations and maintenance needs exceed more than $32 billion along the proposed Keystone XL corridor. The failure to repair and maintain this vital infrastructure causes gas leaks and explosions, sewage overflows, water main ruptures and the loss and contamination of drinking water. The damage caused by leaking gas pipelines has cost these states more than $450 million in damage since 1984.”

As anyone who lives in an area that has experienced a water main break knows, the upheaval can be extensive. At the same time, it’s not an intractable problem and The Keystone-XL Pipeline Debate estimates that approximately 300,000 workers – 177,000 to replace the failing water mains that carry drinking water and 106,000 to repair wastewater pipes – would be needed to get the eroding system back on track. They then project the need for another 15,000 permanent maintenance workers to do ongoing upkeep. “Every dollar spent on gas, water and sewer infrastructure in these states generates 156 percent more employment than the proposed Keystone XL Pipeline,” the report concludes.

The authors further note that if the federal government closed tax loopholes and ended ongoing subsidies to oil companies and refineries, the infrastructure upgrade would pay for itself. Needless to say, it is urgently – maybe even desperately – needed; both the American Society of Engineers and the Environmental Protection Agency estimate that nearly 30,000 miles of pipes transporting drinking water will need to be replaced by 2033.

Furthermore, even if these measures are not taken, the creation of a National Infrastructure Bank – an idea that has the support of the AFL-CIO as well as the Chamber of Commerce – could leverage approximately $600 billion of private investment to repair, modernize and expand our crumbling foundation and finance the building of railways, schools, hospitals and other necessities. Still in the planning stage, it may never come to fruition because it essentially would cede the provision of essential services to private financiers. As proposed the bank would be staffed by presidential appointees, all of them vetted by Senate confirmation.

Jane Kleeb, founder and head of Bold Nebraska, a statewide network of activists, farmers, indigenous people, ranchers and environmentalists who oppose the Keystone XL, is not thinking about the Bank, but is instead trying to stop the Pipeline by any and all means. She is adamant that the press has been complicit in trying to sell the public a flawed bill of goods. “First,” she begins, “the national media has served as a PR tool in trying to sell K-XL to Americans. There have been tons of ads from ALEC-supported groups like Americans for Prosperity, but Nebraskans get angry when they feel they’re being lied to. The fact that state law allows foreign corporations to use eminent domain to take land for any kind of pipeline – gas, oil, water, nuclear waste, tar sands – and use it for private purposes sets an awful precedent.”

What’s more, it was never about jobs. “Canada and TransCanada made a really bad investment in tar sands, and the only way they can make their investment back is to get their product to the export market,” Kleeb said. “Canada started producing tar sands in small amounts in the 1980s then began ramping up production in the late 1990s and early 2000s. Their investors want to see a profit.”

Kleeb is clearly passionate in her opposition to the pipeline, and her exasperation is obvious. There’s abundant evidence to demonstrate that tar sands oil should not be developed or transported, she said. “Cleaning up from tar sands is close to impossible. Just look at what has happened in Illinois and Michigan, where piles of petroleum coke, commonly called petcoke – the carbon, heavy metals and sulfur that is left after everything of value is extracted from the oil – is piling up along the Calumet River.” It’s not just unsightly, she explains, but is posing a potential health problem for those who breathe it in. “In Nebraska we worry that the Ogallala Aquifer – the source of drinking water and irrigation for much of the state – will be contaminated if K-XL is allowed. Nebraska is the third-best source of wind in the US. We want to see jobs in wind production, windmills and solar energy.”

For Kleeb and other activists, the issue of priorities is sharply focused. Will it be a possibly dangerous pipeline or attention to infrastructure?

Media Matters reports that the US defense budget is higher than the military outlay of the next 17 highest-spending countries combined. At the same time, the National Bureau of Economic Research reminds us that nearly 60 percent of low-income 3- and 4-year-olds are not enrolled in preschool. Arts programs in public elementary, junior high and high schools have been decimated, thousands of teachers and counselors have been laid off, classes of 32-38 students are no longer unusual and preparations for standardized testing have replaced real learning. Meanwhile, the government is shelling out $13.09 billion for each MQ-9 Reaper and $13.93 billion for each RQ-4 Global Hawk but is doing next-to-nothing about climate change, fouled air or polluted waterways.

Isn’t it time to upend these choices and promote a budget that benefits the 99%?

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