Media Matters for America

Photo by Garth Lenz for Sierra Club

By Jill Fitzsimmons & Emilee Pierce

In the media storm surrounding TransCanada’s proposed Keystone XL pipeline, news outlets have largely focused on the employment impacts of the project, often parroting discredited industry statistics in the process. But jobs are only a part of the story. A review of recent testimonies, tax records and local news reports shows that, on many other important issues at stake, TransCanada has been advertising one thing to its stakeholders and delivering another. What follows is a list of stories that many national news outlets missed:

1. TransCanada Used Aggressive Tactics With Landowners. TransCanada touts a commitment to “treating all landowners who may be affected by our project honestly, fairly and with mutual respect.” But while the permit application for the Keystone XL pipeline was still pending, TransCanada sent letters to landowners along the pipeline route threatening to use eminent domain to seize their land if they did not agree to sign easements within 30 days. Landowners reportedly found this approach to be “very intimidating” and felt “bullied” by TransCanada. The Nebraska Farmers Union has repeatedly spoken out against TransCanada’s “less than ethical” tactics, and, according to The New York Times, East Texas landowners said “they had never seen a company behave as aggressively as has TransCanada.” Additionally a U.S. government official called the use of eminent domain “presumptuous” because the pipeline had not yet been approved. This story has been reported by the local press but largely ignored by the national media.  

2. TransCanada Didn’t Deliver On Previously Promised Tax Revenue. TransCanada has promised that Keystone XL will generate $5.2 billion in property tax revenue for the U.S. states located along its route. But the company made similar promises about the first leg of the Keystone pipeline, and 2010 tax records show that it failed to deliver. In its first year of operation, Keystone 1 generated less than half ($2.2 million) of the $5.5 million projected for Nebraska, and only a third ($2.9 million) of the estimated $9 million in state property taxes for South Dakota. In Kansas, TransCanada is exempt from property taxes for a decade, which will cost the state $50 million in public revenue, according to local officials.

3. TransCanada Reversed Its Position On Rerouting. In response to concerns about the environmental impact of the Keystone XL pipeline on Nebraska’s ecologically sensitive Sandhills region, TransCanada initially claimed that rerouting the project would be “impossible.” But the next month, following the Obama administration’s announcement that a decision on the pipeline would be delayed, TransCanada changed its tune. On Nov. 14, TransCanada announced that “the route will be changed and Nebraskans will play an important role in determining the final route.”

4. TransCanada Will Import Much Of The Steel For The Pipeline. TransCanada has claimed that the Keystone XL pipeline would create 7,000 manufacturing jobs in the U.S. But an independent analysis called that figure “unsubstantiated and misleading” because TransCanada has already signed contracts to purchase “almost half” of the pipeline materials from companies abroad. TransCanada has acknowledged that it has already spent $1.9 billion on 100 miles of pipe, which is now being stored in yards and warehouses. After receiving information from pipeline company Welspun Tubular that some of the steel pipe for the project was produced in India, Democrats on the House Energy and Commerce Committee asked TransCanada to “immediately disclose where the steel to be used in Keystone XL is manufactured.” Citing TransCanada’s history of using low-quality, foreign-made steel to build U.S. pipelines—even as unemployed American manufacturers sat idly by—the United Steelworkers union also said it would only support TransCanada’s application for the Keystone XL pipeline if steps were taken to ensure “a domestic supply chain.” 

5. TransCanada Said Its Pipeline Would Increase Oil Prices In The Midwest. In the U.S., TransCanada has advertised the Keystone XL pipeline as a path to energy security. But a 2010 analysis prepared for the Department of Energy concluded that the Keystone XL pipeline will not have a significant impact on U.S. dependence on oil from the Middle East. Furthermore, even if the oil stayed here it would not protect the U.S. from price volatility since “the oil market is globally integrated,” in the words of the Congressional Research Service. In fact, despite promises of a stable, affordable U.S. energy supply, TransCanada told Canada’s National Energy Board that the pipeline would increase crude oil prices in the Midwest. “The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of U.S. $2 billion to U.S. $3.9 billion,” TransCanada said.

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