http://www.forbes.com/sites/lorenste...line-and-jobs/
Loren Steffy, Contributor
ENERGY | 8/02/2013
Can We Stop Talking About The Keystone Pipeline and Jobs?
Maybe today’s jobs report has everyone focused on employment issues, but the rhetoric about the Keystone pipeline as a jobs engine is gearing up once again. President Obama, in a recent interview, referred to the jobs created by Keystone as a “blip” — only about 50 permanent jobs, by his count.
It’s not clear if Obama is bending to pressure from environmentalists, sending a message to Canada about carbon emissions from oil sands, or both.
Regardless, Investors Business Daily shot back with an editorial declaring that Obama’s Keystone jobs claims were “as phony as his recovery” and argued that pipeline-related employment would be “certainly larger than the permanent jobs created at solar panel maker Solyndra, which was zero.”
Supporters of the Keystone project claim it would sustain thousands of jobs — IBD threw out the number 42,100 — while environmentalists and other opponents say most of the employment gains would be temporary construction jobs, not permanent positions.
So who’s right? Who cares?
First of all, job creation predictions are largely fiction. Employers frequently offer grandiose promises to curry favor with local governments. It helps them gain the regulatory concessions they need and, in some cases, tax breaks. While Obama seems to be downplaying the job-creation potential here, it’s likely the pipeline’s builder, TransCanada TRP +0.14%, is overstating it.
The entire jobs debate is a dangerous distraction. Obama entered office in a devastated economy, and job creation was clearly a top priority. But along they way, he combined jobs programs with what passes for energy policy in Washington, and the results have been a failure on both fronts. IBD mentioned Solyndra, which is a great example. Solyndra went off the rails because it was touted as part of a broader effort to create “green jobs.” We can have cleaner energy and save the economy at the same time. What could be better than that?
Unfortunately, the administration’s thirst for jobs blinded it to Solyndra’s imminent failure. As I’ve argued before, there are benefits to the government providing loan guarantees for the development of innovative technology that could lead to long-term growth for U.S. companies. The government has long helped guarantee the risk that companies wouldn’t take by themselves. But that is quite a different thing than using loan-guarantees to subsidize job growth at failing companies.
Job creation, of course, shouldn’t be industry specific. “Green jobs” may add to the economy, but fossil fuel-related jobs have contributed more. If jobs is the measure of success, then approving Keystone ought to be no-brainer because building the pipeline will add more jobs than not building it.
But that has nothing to do with the more important issue of energy policy. Energy policy falters when it becomes a solution for other, short-term, problems such as jobs.
The issue for the Keystone project isn’t how many jobs it creates or how many are permanent. The issue is energy security. Earlier this week, the U.S. Energy Information Administration said world energy consumption will rise by 56 percent in the next three decades. Even with new-found deposits of shale oil and natural gas in the U.S., expanded offshore drilling and other “unconventional” energy plays, the U.S. will be competing for energy supplies against the rising demands of much of the world. Renewables will help meet that need, but their contribution to U.S. energy supply has a long way to go to climb out of single-digit percentages.
We need to continue to encourage innovation, even if some of it fails. But we also need to ensure we have access to as much supply of conventional fuels as possible. Keystone is one piece of that strategy. It gives us access to a large supply of cheap oil in our proverbial backyard.
Energy policy requires a long-term view. Arguing over jobs is a short-term distraction.
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