Cancelling Keystone XL cost thousands of jobs and billions in GDP: U.S. government report

Politicians, Indigenous leaders, and labour unions criticized the cancellation for the significant consequences it could have for both Canada and the United States

By Cody Ciona
Keystone facility at Hardisty, Alberta. Photo courtesy Getty Images.

There is no doubt that Keystone XL’s cancellation was a massive gut punch to Canada and its oil and gas industry. Now the analysis is out showing the impact it had on the United States.

Just a sliver over two years ago the U.S. government nixed the pipeline project which would have added an additional 830,000 barrels of oil per day into the U.S.

The pipeline, which was expected to be complete in 2023, would have provided thousands of jobs and billions in economic activity. In December, the U.S. Department of Energy released its congressionally mandated report on the matter, and it’s now known approximately how many jobs and billions of dollars were foregone due to the cancellation.

The highlighted impacts in the report show that about 20,000 potential construction jobs per year over a two-year period were lost.

The nixing of the project also had a direct impact on the U.S. GDP with a loss of $3.4 billion. Wages were also impacted, with an estimated loss of $2.05 billion in potential earnings.

While there have not been any government numbers released for Canadian job losses, TC Energy said at the time of the cancellation that 1,000 workers would be laid off due to the announcement. It was a missed opportunity to lower costs for U.S. consumers, according to the American Petroleum Institute.  Indigenous groups were also impacted by the cancellation.

Dale Swampy, president of the National Coalition of Chiefs noted that “It’s quite a blow to the First Nations that are involved right now in working with TC Energy to access employment training and contracting opportunities.”

Natural Law Energy, an Indigenous-owned energy company, had signed an agreement to invest a $1 billion equity stake in the pipeline.  This would have had the potential to create jobs and economic opportunity for Indigenous communities, Natural Law Energy said. More than $600 million in supply and employment agreements for Indigenous-owned companies were expected to come from the project’s construction.

While celebrated by many environmental groups, the decision to cancel Keystone XL was controversial on both sides of the border. Politicians, Indigenous leaders, and labour unions criticized the cancellation for the significant consequences it could have for both Canada and the United States.

Teamsters general president Jim Hoffa’s statement strongly encouraged the U.S. government to reconsider the decision. “This executive order doesn’t just affect U.S. Teamsters; it hurts our Canadian brothers and sisters as well who work on this project. It will reduce good-paying union jobs that allow workers to provide a middle-class standard of living to their families.”

Terry O’Sullivan, general president of the Laborers’ International Union of North America said, “By blocking this 100 percent union project, and pandering to environmental extremists, a thousand union jobs will immediately vanish, and 10,000 additional jobs will be foregone.”

The United States is the world’s largest importer of oil, and Canada is its top supplier. America will continue to rely on oil imports, according to the U.S. Energy Information Administration. Absent Keystone XL, imports will come increasingly from other countries that may not have the same environmental and human rights standards as Canada.

The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.