Fixing old water and gas pipelines would create far more jobs than building Keystone XL

By Brendan Smith, Kristen Sheeran and May Boeve, GRIST

In the coming months, President Obama will decide whether to approve the permit for the Keystone XL pipeline, which would transport crude tar-sands oil from Alberta to the Gulf of Mexico. We know that the pipeline would greatly aggravate climate change, allowing massive amounts of the world’s dirtiest oil to be extracted and later burned.

The payoff, say supporters such as the U.S. Chamber of Commerce, is a job boom in construction industries, which are currently suffering from high unemployment. Earlier this month, Chamber of Commerce CEO Tom Donohue called on the president “to put American jobs before special interest politics.”

If you believe headline-grabbing challenges such as Donohue’s, the president is painted into a corner on the KXL pipeline — trapped by a stagnant economy and an ailing environment.

The president knows KXL’s jobs promises are way overblown. In July, he explained it this way to The New York Times: “Republicans have said this would be a big jobs generator. There is no evidence that is true.” The most realistic estimates, said the president, show that KXL “might create maybe 2,000 jobs during the construction of the pipeline, which might take a year or two.” And after that, “we’re talking about somewhere between 50 and 100 jobs in an economy of 150 million working people.”

Still, even a few thousand construction jobs can’t be dismissed out of hand, in an industry where nearly a million people are estimated to be out of work. Those jobs would put food on the table and pay mortgages. They would alleviate a lot of pain, even if only temporarily. As a country, we’re still hungry for jobs. It seems as if we’re collectively out on the street and KXL is the only offer that has come along.

But that’s not actually the case.

According to “The Keystone Pipeline Debate: An Alternative Job Creation Strategy,” a study just released by Economics for Equity and Environment and the Labor Network for Sustainability, targeted investments in our existing water and natural-gas pipeline infrastructure needs along the proposed five-state corridor of the KXL pipeline would create many more long-term jobs than Keystone XL, both in absolute terms and per unit of investment.

We can create far more jobs in the construction industry and do it right in the regions that would stand to benefit from the KXL pipeline. We can get beyond the zombie jobs-vs.-environment debate that keeps rearing its ghoulish head, putting people back to work without breaking the climate. We can do all this by tackling the national crisis of aging infrastructure — repairing things such as crumbling water mains and leaking gas lines that are critical to our communities and our economy.

The data from the report are straightforward and compelling. Meeting the $18 billion in needed water and gas line repairs would support:

–  More than 300,000 total jobs across all sectors

–  Nearly five times more jobs, and more long-term jobs, than KXL

–  156 percent of the number of direct jobs created by Keystone XL per unit of investment

All of this necessary infrastructure work can be financed, as the report describes, just by closing three federal tax breaks fossil fuel companies enjoy for drilling and refining activities.  So the tax loopholes that would help subsidize the KXL pipeline could instead fund many more longer-lasting jobs repairing existing water and gas infrastructure.

To be clear, natural gas has serious negative impacts to communities and the environment. Fracking, the now commonly used process of extracting shale gas from deep underground, releases 30 percent more greenhouse gas emissions than conventional drilling and is poisoning water supplies across the country. But we still need to fix leaks in our existing natural-gas pipelines, which are contributing significantly to climate change. Shoring up those pipelines will also protect communities and businesses that rely on gas now, as we transition to cleaner energy.

Damage caused by leaking and unsafe gas pipelines cost governments across the country more than $450 million between 1984 and 2013. The American Society of Civil Engineers, in its latest Infrastructure Report Card, recently gave the country a D+ on energy infrastructure, and a D on drinking-water and wastewater infrastructure. If we don’t get our act together, we’re going to see more devastating explosions like the one that tore through San Bruno, Calif., a few years ago.

What’s curious is that many of the politicians and lobbying groups who have touted the KXL pipeline as a source of jobs have opposed legislation to invest in job-creating pipeline infrastructure programs. Yet when it comes to job creation, infrastructure improvements beat out KXL by a country mile. KXL has become a litmus test for being pro-job, but one that’s far detached from reality and that’s drawing attention away from effective ways to get people back to work.

Meanwhile, environmentalists, frequently excoriated as “job killers,” are becoming a strong collective voice for investment in infrastructure and other things our country really needs. They are increasingly working with organized labor to develop concrete alternatives to jobs that may destroy the environment.

If job creation is our primary goal, then politicians should pivot away from the Keystone XL pipeline and toward repairs to existing pipeline infrastructure. This is how President Obama — and the whole country — can get out of the Keystone jam.

Brendan Smith is a former construction worker and cofounder of the Labor Network for Sustainability.Kristen Sheeran is an economist and director of the E3 Network.

May Boeve is the executive director of

Missing money: Feds halt funding for $361M reservation pipeline

30 April 2013

MATT VOLZ, Associated Press


• The irregularities are among several alleged corruption issues on the Rocky Boy’s reservation in northern Montana, said Kenneth Blatt St. Marks, a former tribal chairman.

BOX ELDER, Mont. (AP) – Federal officials temporarily stopped funding a $361 million water pipeline for a Native American reservation in Montana after learning that millions of project dollars were missing and a Chippewa Cree leader in charge of the project steered federal dollars to a company he owns.

The tribe has since replaced the missing money, but federal funding for the pipeline won’t resume until tribal leaders show they have permanently fixed the problems, Bureau of Reclamation regional director Michael J. Ryan said.

“While we commend the tribe for restoring the funds soon after the shortage and for self-reporting the issue, this reallocation of funds without consultation is a serious non-compliance matter with potentially long-lasting implications,” Ryan said in a March 18 letter obtained by The Associated Press.

Pipeline funding is controlled by the Bureau of Reclamation, which is part of the Interior Department. Bureau spokesman Tyler Johnson confirmed that the agency’s inspector general is conducting an investigation, but Johnson declined to provide details.

The irregularities are among several alleged corruption issues on the Rocky Boy’s reservation in northern Montana, said Kenneth Blatt St. Marks, a former tribal chairman. Marks said he reported the missing pipeline funds to the Bureau of Reclamation and that he is cooperating with the inspector general and with federal prosecutors in an investigation into alleged corruption on the reservation.

“There’s millions and millions and millions of dollars missing here,” claimed St. Marks, whom Ryan also identified as having a potential conflict of interest in the pipeline project. “This reservation is upside down.”

Calls to tribal officials were referred to attorney Dan Belcourt, who said he was not authorized by acting tribal chairman Richard Morsette to comment on the pipeline project or St. Marks’ allegations. Belcourt released a brief statement Saturday on behalf of tribal leaders that said they are “actively working with BOR on the issues raised in that letter.”

“The tribe and BOR share a common goal of seeing the Rocky Boy’s/North Central Montana Regional Water System project through to completion,” the statement said.

Congress approved the project in 2002 to bring reliable drinking water to the poverty-stricken reservation in the shadow of Montana’s Bear Paw mountains. Construction began in 2006, and when it is completed, the pipeline will run about 50 miles from Lake Elwell, serving as many as 30,000 people on and off the reservation.

Congress originally estimated the project’s cost at $228 million. That has since risen to $361 million due to inflation and rising costs.

It was unclear what effect a funding delay would have on constructing the pipeline, which is now 22 percent complete. As of last year, the bureau had allocated $96 million in addition to $10 million allocated by Congress.

St. Marks said that, as then-tribal chairman, he discovered at a Dec. 31 meeting with tribal leaders that $3.5 million was missing from Chippewa Cree bank accounts for the water project. Johnson declined to confirm the amount missing, saying it was part of the investigation.

No one could explain where the money went, St. Marks said. The meeting was held at the Chippewa Cree Construction Corp., the company that heads the project.

St. Marks reported the missing funds to the Bureau of Reclamation. In January, the Chippewa Cree Business Committee – the tribe’s governing council – replaced the money with cash from other tribal enterprises, he said.

It still is not clear what happened to the missing money.

Tony Belcourt is CEO of the construction company and head of the pipeline project. Belcourt also co-owns MT Waterworks, a company formed in 2010 that was awarded a $633,000 contract by the tribal construction corporation he heads to supply pipe for the project.

St. Marks said he fired Belcourt as the construction corporation’s CEO after the Bureau of Reclamation learned of that conflict of interest. But the eight other members of the ruling Chippewa Cree Business Committee reinstated Belcourt while St. Marks was on a trip to Washington, D.C.

That reinstatement, and St. Marks’ ownership in another company that was awarded a separate $1.9 million contract for the pipeline, prompted Ryan in his letter to tell the tribe to correct the ethics violations.

“We request that the tribe take immediate corrective action to remedy these apparent conflicts of interest,” Ryan wrote. He did not elaborate on what action the tribe had to take.

Belcourt, a former state legislator, declined to comment Friday and referred questions to his cousin, tribal attorney Dan Belcourt, who said he was not authorized to comment.

St. Marks was the owner of Arrow Enterprises, a private construction company that was awarded the $1.9 million contract before he became the tribe’s chairman. St. Marks said he turned over the company to his wife to end any conflict of interest.

But Johnson, of the Bureau of Reclamation, said the federal agency has not accepted that arrangement and the agency is requesting action to resolve the conflict.

In his letter, Ryan said the Chippewa Cree’s accounting of project funds was not accurate and lacked supporting data such as bank statements, balance sheets and expense statements. Johnson said Friday that the tribe has submitted additional financial information and corrected its accounting.

Still, Ryan gave the tribe until April 29 to resolve the rest of the problems and avoid more funding delays.

St. Marks became tribal chairman in November but was impeached in March by the business committee, which leveled seven charges against him ranging from inappropriate sexual comments to an employee to trading in two tribal vehicles so he could buy a sport-utility vehicle for personal use.

St. Marks denied the charges. He claimed he was impeached for cooperating with the federal investigation and for asking questions about the finances of some of the tribe’s biggest enterprises: its casino, health clinic and an online lender.