Editorial comment

A job for lifeLast month, US President Barack Obama, made a clear – if unspecified – reference to the Keystone XL pipeline in his State of the Union speech, saying: “Let’s set our sights higher than a single oil pipeline… Let’s pass a bipartisan infrastructure plan that could create more than 30 times as many jobs per year, and make this country stronger for decades to come.”Obama references the much-debated assertion that the KXL pipeline would create tens of thousands of jobs for engineers, construction workers, pipeline contractors and many other tangentially connected employees along its route and at various construction camps. State Department figures estimate that some 42 000 temporary jobs would indeed be created, the majority of which with a lifespan of about two years. The permanent job tally would be much lower (approximately 35), with a further 15 longer-term, but nevertheless still temporary, jobs. The 42 000 figure includes some 10 400 seasonal jobs lasting just four to eight months. Many of the construction jobs in Montana, South Dakota, Nebraska and Kansas will rely on specialists brought in from out of state.¹ In other jobs news, The Times of San Diego reports that a potential amendment to the Keystone Pipeline Bill could threaten shipbuilding jobs. The amendment would repeal the Merchant Marine Act of 1920, often called the Jones Act, under which goods shipped between US ports are required to be carried on vessels built by the US and owned and operated by Americans. The San Diego shipbuilding industry says that (here’s that phrase again) tens of thousands of jobs will be lost if the amendment takes place and foreign ships are allowed to break this monopoly. In support of the amendment is Senator John McCain, who says: “I have long advocated for a full repeal of the Jones Act, an antiquated law that has for too long hindered free trade, made US industry less competitive and raised prices for American consumers…According to the Congressional Research Service, it costs US$6 per barrel to move crude from the Gulf Coast to the Northeast US on a Jones Act tanker, while a foreign-flag tanker can take that same crude to a refinery in Canada for US$2 per barrel – taking money directly out of the pockets of American consumers.”² Jobs created; jobs taken away. Profits made; losses felt. I’m not sure we need to hang the decision about the KXL pipeline on job creation, or the lack of it, at all. Jobs are a tricky subject on which to pin your argument – especially in the current climate, when oil prices are making even the most stoic oil and gas executives start to count heads.The recent BP job cuts, announced after the ruling that BP could pay US$14 billion in damages for the Deepwater Horizon spill, have been well documented in the press. Schlumberger has announced 9000 layoffs; Apache will cut just under 5% of its workforce; ConocoPhillips cut jobs in the North Sea; US Steel is letting go 3% of its North American workforce; Baker Hughes cut 7000 jobs after its merger with Halliburton. More job culls are expected across the industry. The Houston area is bracing itself for at least 128 000 lost jobs in the wake of low oil prices. My instinct, and my hope, is that the oil price will go back up (demand will increase while the price is low; producers will cut back and will reduce supply), that pipeline personnel will be re-hired and that the KXL pipeline will be approved, all in good time. The cyclical nature of the oil and gas industry means that the workforce must withstand the waxing and waning of hiring and firing, as the reactionary industry responds to external changes. This is scant consolation for those whose jobs are gone or in danger, but perhaps it’s better to know the nature of the beast, rather than claim to know exactly which politically-hot pet project will be the one to save our skins. 1. http://www.salon.com/2014/11/17/the_keystone_myth_that_refuses_to_die_stop_calling_the_pipeline_a_job_creator/2. http://timesofsandiego.com/politics/2015/01/16/keystone-pipeline-amendment-cost-san-diego-thousands-jobs/