Can the Keystone XL Pipeline Beat Wind and Solar’s Job Creation?

SunShot solar initiatives could out-do Keystone XL pipeline for job creationIn last weekend’s weekly GOP radio address, Senator Tim Scott (R-SC) continued to pitch the proposed Keystone XL pipeline as a job-creating engine, chiding President Obama for dismissing the project as “not a jobs plan.”

However, Scott’s speech follows on the heels of three major reports that demonstrate how rapidly wind power and solar power are becoming significant players in the U.S. energy landscape. When you consider how that translates into job creation and economic activity, it becomes all the more difficult to make a rational case for the construction of new fossil fuel infrastructure that could end up putting more jobs at risk than it creates.

Wind Power and the SunShot Initiative

The aforementioned reports include two on the wind power industry from the Department of Energy (previously covered on Triple Pundit here). They highlight the fact that wind accounted for the single largest source of new generating capacity in the U.S. last year, even beating out the surging natural gas sector. DOE also notes that in addition to jobs related to the construction of wind farms and individual turbines, the wind industry is also revving up the manufacturing sector. It used more than 70 percent domestic components last year, compared to only 25 percent in 2006.

The third report came out last week from the University of California – Berkeley. It highlights President Obama’s SunShot Initiative, which is modeled on the renowned 1960s “Moonshot” program that propelled the U.S. into leadership in space exploration. Under SunShot, the goal is to bring the price of solar power down to parity with conventional sources by 2020.

SunShot pivots around a series of public-private partnerships, pumping about $300 million per year into new solar technologies while creating new jobs. Although Republican critics have focused attention on the bankruptcy of one partner company, Solyndra, the fact is that SunShot has been an overwhelming success.

The UC-Berkeley study involved developing a computer model of the electric power grid in the western U.S., Canada and Mexico, in order to predict what would happen to electricity prices and carbon emissions if SunShot achieves its goal, as seems likely to be the case. The area of study covers the U.S west of the Kansas/Colorado border, Alberta, British Columbia, and northwest Mexico.

The research team determined that if successful, SunShot could provide more than one-third of all energy needs in the study area while displacing other alternatives, namely natural gas, nuclear energy and carbon capture and sequestration technologies. That assumes a coordinated strategy including energy storage and transmission, which is already developing under the Obama Administration’s “smart grid” program.

The study also took the likelihood of a carbon cap or tax structure into account. Although it might seem safe to assume that such a structure would result in higher prices, the UC-Berkeley team found that the SunShot goal of affordable solar power would be more than enough to counterbalance that effect.

The result would be a savings of 14 percent annually by 2050, while achieving carbon reduction goals and of course, creating jobs in solar manufacturing, installation and maintenance.

Speaking of job creation, it’s worth noting that the private sector partner in the study is the advanced battery technology company Seeo, which was founded specifically to commercialize cutting edge technology developed at Lawrence Berkeley National Laboratory.

The “Job-Killing” Keystone XL Pipeline

It’s an open secret that the tar sands oil to be transported through the Keystone XL pipeline is intended for the export market and it will do nothing to alleviate high petroleum prices in the U.S. That leaves job creation as the only meaningful point in its favor.

In that context, it’s fair to ask whether the number of jobs created by Keystone, however many it might be, will be enough to compensate for the potential economic damage and job loss that would result if the pipeline leaks or breaks.

A piece in The New York Times this past weekend provides a glimpse of just how great the damage can be from a tar sands oil spill, judging from the effects of the Kalamazoo River pipeline spill in Michgan and the Mayflower, Arkansas spill.

Come to think of it, if Keystone supporters really mean to argue their case for job creation, they can point to the Kalamazoo River spill, too. Yes, there has been damage to the local economy,but the spill has succeeded in creating numerous jobs in remediation, relocation and related fields.

Let’s also not forget to take a look at latest quarterly report from NRG Energy. If that name rings a bell, you could be thinking of one of the solar energy projects the company has embarked upon. Even though last quarter’s earnings were described as “disappointing” overall, NRG’s solar projects provided it with some good news, prompting CEO David Crane to say (emphasis added):

If there is a silver lining it is that in 2014 we will be in a much better position to reap the benefit of long term strategic plan to diversify our financial performance away from 100% dependence on cyclical commodity risk into a broader and more resilient set of revenue streams.

If fossil fuel dependency is too risky for a industry leader like NRG, that ought to tell you something about the future direction of the U.S. energy landscape, Keystone or no Keystone.

[Image: Courtesy of U.S. Navy]

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Tina writes frequently for Triple Pundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.

33 responses

    1. There are in excess of 50,000 miles of pipeline currently deployed in the US, please explain how Keystone is different and environmentally damaging as opposed to existing installations.

      1. I would not defend that it is different. I would simply like to know how long pipeline construction jobs last. Once the construction is over, many workers are back in line for a job. I’m suggesting they are not a sustainable path to employing Americans because I don’t think we should count disaster mitigation in total jobs. It is the “resource paradox.” Whether or not you see the project as necessary, I don’t think job creation should count in the upside column for risky, finite, resource exploitation.

        1. The premise of this article is specious. It’s analogous to comparing the job creation of 1,000 miles of Interstate highway to some manufacturing entity. The construction crews survey, build, and leave. What’s important are the jobs created at the southern end of the pipeline refineries distribution export etc.
          Sure solar panel and wind turbine companies create jobs, in China (solar) and Germany (wind turbines). How many jobs did SOLYNDRA create? The more important question is how many jobs are displaced. The Spanish massive investment and poorly managed Solar experiment, currently on the verge of collapse, displaced 2.9 jobs for every job it created.

        2. Temporary jobs should not be given the same weight as permanent jobs in a discussion of reviving employment for the U.S. Solyndra failed, but it’s a small part of the picture. Conservatives and petro enthusiasts keep pointing to it like they do any one small study that shows water near fracking is NOT contaminated, while ignoring hundreds of other reports of negative health impacts on humans and livestock in fracked areas. Solyndra does not deserve to be a “game over” spiking of the ball.

        3. So far, 34 companies that were offered federal support from taxpayers are faltering — either having gone bankrupt or laying off workers or heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration’s Department of Energy and other agencies. The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher.

          The complete list of faltering or bankrupt green-energy companies:

          Evergreen Solar ($25 million)*

          SpectraWatt ($500,000)*

          Solyndra ($535 million)*

          Beacon Power ($43 million)*

          Nevada Geothermal ($98.5 million)

          SunPower ($1.2 billion)

          First Solar ($1.46 billion)

          Babcock and Brown ($178 million)

          EnerDel’s subsidiary Ener1 ($118.5 million)*

          Amonix ($5.9 million)

          Fisker Automotive ($529 million)

          Abound Solar ($400 million)*

          A123 Systems ($279 million)*

          Willard and Kelsey Solar Group ($700,981)*

          Johnson Controls ($299 million)

          Brightsource ($1.6 billion)

          ECOtality ($126.2 million)

          Raser Technologies ($33 million)*

          Energy Conversion Devices ($13.3 million)*

          Mountain Plaza, Inc. ($2 million)*

          Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*

          Range Fuels ($80 million)*

          Thompson River Power ($6.5 million)*

          Stirling Energy Systems ($7 million)*

          Azure Dynamics ($5.4 million)*

          GreenVolts ($500,000)

          Vestas ($50 million)

          LG Chem’s subsidiary Compact Power ($151 million)

          Nordic Windpower ($16 million)*

          Navistar ($39 million)

          Satcon ($3 million)*

          Konarka Technologies Inc. ($20 million)*

          Mascoma Corp. ($100 million)

          *Denotes companies that have filed for bankruptcy

        4. Not sure where you’re going with this Alpha… I don’t think you can take a list like this out of context of all the struggling companies of the past rough 5 years. Did you think big, successful petroleum industry is not subsidized? At least starry-eyed green energy companies don’t have blood of war on their hands, or monstrous spills. A lot of dead birds, maybe, but not ruination of entire ecosystems. After all, financial cost isn’t the only cost. But even if it were, your comparison isn’t accounting for historic subsidy of oil and gas.

        5. Sonia you are undoubtedly a good person. The list of failures and failing company represents why subsidies don’t get it. As I posted below Cape Wind costs 2.6 Billion dollars and will produce 24.6 gigawatt s over its life cycle of 20 years whereas a 311 Million dollar Combined Cycle Natural Gas Turbine plant, occupying ten acres, will produce 133 gigawatt s over a life cycle of 35 years. I can tell from your responses that you are not one of the usual renewable energy interested parties, however, I suggest you read up on Pathological Altruism then look in the mirror, then look at what the Environmental Movement inflicted on the Sub Sahara with the DDT restrictions on developing countries. 100 million deaths and counting. Pathological Altruism kills.

        6. Somehow I think it’s a compliment that you’ve assume I exhibit pathological altruism. If only I were that pure of heart! I’m a skeptic of many things, and believe in making better choices as we move forward. Alpha, you’ve not given any plan that moves forward, just a finger way at those who try. Certainly, there are loads of examples where best intentions went bad. Carbon offsets is one of those discussions. There is never one way. This is why the discussion is so vital. Palm oil is the healthier choice for the individual, and brings profit to producers, but meanwhile decimates natural forest land. I’m well aware of the minefield between issues, but do believe that we must step forward from fossil fuels. Perhaps Lance S. is right that the inevitable solution is a mass die-off of humanity. But, in the meantime, there’s decades of decisions to be made that will be the legacy of our spirit on the planet. Some choices are wrong and very much confused by international politics involving resource mining and allowance of chemicals or pollution, but it’s in the nature of some of us to keep trying. The financial model of oil and gas only works because for a long time our government has been complicit to say that it will. So it’s logical to think that the same could eventually happen for green energy. Optimism and the will to transition cannot be quantified.

        7. “Concepts and implications of altruism bias and pathological altruism,” in the Proceedings of the National Academy of Sciences. Pathological altruism can be conceived as behavior in which attempts to promote the welfare of another, or others, results instead in harm that an external observer would conclude was reasonably foreseeable.

          On Policy

          Good government is a foundation of large-scale societies; government programs are designed to minimize a variety of social problems. Although virtually every program has its critics, well designed programs can be effective in bettering people’s lives with few negative tradeoffs. From a scientifically-based perspective, however, some programs are deeply problematic, often as a result of superficial notions on the part of program designers or implementers about what is genuinely beneficial for others, coupled with a lack of accountability for ensuing programmatic failures. In these pathologically altruistic enterprises, confirmation bias, discounting, motivated reasoning, and egocentric certitude that our approach is the best—in short, the usual biases that underlie pathologies of altruism—appear to play important roles.

        8. Alpha, you’re reaching very far to defend oil and gas. The discussion of government and altruism is bit off-topic, though I do understand the broader context. Who is to judge which acts of altruism are misguided? We all try to navigate our lives in ways that help others, according to how we think they may like to be helped. Shall we go yet further off topic and dissect this from a Christian perspective? And about good government… Really? You’re going to go there? I’m no stranger to Libertarian philosophy, but dreaming about what government should or shouldn’t be is a far reach from what it has been, what it is today, and how we might nudge it. None of the thoughts you present here are defense for a policy that is heavily stacked toward fossil fuels.

          Admit it, you work in the oil and gas industry, yes? It’s not a crime. In fact I just returned from a wedding of happy oil and gas geologists.

        9. Ozzie Zehner – Kettering University (BS – Engineering) and The University of Amsterdam (MS/Drs – Science and Technology Studies).

          “There is an impression that we have a choice between fossil fuels and clean energy technologies such as solar cells and wind turbines. That choice is an illusion. Alternative energy technologies rely on fossil fuels through every stage of their life. Alternative energy technologies rely on fossil fuels for mining operations, fabrication plants, installation, ongoing maintenance and decommissioning. Also, due to the irregular output of wind and solar, these technologies require fossil fuel plants to be running alongside them at all times. Most significantly, alternative energy financing relies on the kind of growth that fossil fuels drive.”

          “Since wind and sunlight are free, why are wind and solar power so expensive? Solar and wind energy technologies should be very cheap – much cheaper than fossil fuels.

          But they are not cheap at all. Even with massive subsidies, we see firms going bankrupt trying to sell them. And then we still have to figure in the cost of building batteries, redundant power plants or other infrastructure that arises from their low quality intermittent energy. Finally, we have to consider the mining, health, pollution and waste problems of renewable technologies. For example, we are now learning that the solar cell industry is one of the fastest growing emitters of virulent greenhouse gases such as sulfur hexafluoride, which has a global warming potential 23,000 times higher than CO2, according to the Intergovernmental Panel on Climate Change (IPCC).”

        10. Alpha, I appreciate your work in reaching for references, but they have not been enough to convert me to petro and give up developing new sources. Sanity in the investment part of the picture should always be considered, as with anything. With so many decades of entrenched lobby pressure for oil and gas, alternative fuels have yet to suck the equivalent from our economy.

          Some solar cells are toxic, and nuclear power plants can be disastrous. I can’t think of one mode of electricity that doesn’t have risks or downsides. For Zehner to say that alternative energy is somehow a farce because it relies on technologies and products of fossil fuels, is akin to saying that everything a child wears, needs and consumes was purchased by the parent, and therefore the child is doomed to never earning a livelihood.

          As for the irregular output, don’t you know that emerging companies are solving this? In my town, Fort Collins, there’s an amazing project at the CSU Engines Lab showing success through collaboration… when alternative power flickers, within a split second (before any citizen would notice a flicker in the grid), a Danish company has created precision-timed means that trigger a super-turbo (American company) to push biofuels (several sources under scrutiny, mostly algae) creating an interrupted power source… No doubt the turbines and such were produced with help of old-school power, but I’ll forgive the project its point in history. And I’ll continue to have faith in human ingenuity. There will be course corrections and downright failures, but that’s evolution of engineering.

          Conservatives resist change while progressives leap to it.

          I suppose if you are so firmly in bed with a fossil mindset, we’ll have to simply agree that conservation of energy is wisest, no matter the source.

  1. maybe it is that non carbon fuel energy costs more than carbon fuel energy. Is that because the billionaires who invest in non carbon fuel energy makes more money from non carbon fuel energy that the billionaires that make money from carbon fuel energy? Or is it because non carbon fuel energy has to employ more workers to get it built. Is it like a building a house where 1/3rd of the house is materials and 2/3rds is labor. And from those materials, 1/3rd is materials and 2/3rds is labor. So it is with non carbon fuel energy, it just means that more people are hired to install the non carbon fuel energy.
    The big event is to not use carbon that’s put into the atmosphere.

  2. Cape Wind project in Nantucket Sound has been approved. The project will cost $2.6 BILLON, and it has secured funding for $2 BILLON of that from a Japanese bank. But this is believed to be subject to the project gaining a loan guarantee from the U.S. Department of Energy. The contracted cost of the wind farm’s energy will be 23 cents a kilowatt hour (excluding tax credits, which are unlikely to last the length of the project), which is more than 50% higher than current average electricity prices in Massachusetts. The Bay State is already the 4th most expensive state for electricity in the nation. Even if the tax credits are preserved, $940 million of the $1.6 billion contract represents costs above projections for the likely market price of conventional power. Moreover, these costs are just the initial costs they are scheduled to rise by 3.5 percent annually for 15 years.

    This project is rated at 468 MW and will produce 143 MW after applying a Capacity Factor of 30.4 % the time the wind actually blows. Life cycle is 20 years therefore this project will produce 24.6 gigawatts. Cost per megawatt $162.72

    A Combined Cycle Natural Gas Turbine plant studied by the DOE completed in 2010 is rated at 570 MW and produces 470 MW, capacity factor 85%. Cost $311 MILLION. Life cycle 35 years therefore this plant will produce 133 gigawatts. Cost per megawatt $3.48. Do the math,QED.

  3. The US Energy Information Agency is the go to government source for unbiased data. Here is a listing of Federal subsidies for electric power by source, fiscal 2010, dollars per Megawatt. Oil and Gas $0.64, Hydropower $0.82, Coal $0.64, Nuclear $3.14, SOLAR $775.64, WIND $56.29. You don’t need a Harvard MBA that there is something amiss here.

    Without subsidies and mandates this nonsense wouldn’t be happening in the US. And yes it takes both sides of the isle, the Crony Capitalists, Crony Socialists and the latest addition to the mix Green Robber Barons. By the way, check out how the renewable energy policies have worked out in Europe in regards to the recession. Spain solar has crashed, Cap and Trade market is in the tank, Germany’s offshore wind debacle, UK canceling all of it onshore wind projects, etc

    1. Are you accounting for the military subsidies that go into oil and gas production? Most of our military budget is used for protecting oil and gas. Also, with no accounting for the environmental and health externalities on coal, you’re not going anywhere with those numbers either.

    2. Yes, green energy is a farce. However, fossil fuels are running out.

      The reality of the situation is that both sides are wrong. Fossil fuels are not a solution for the future, nor are renewables (unless massive scientific advances are made beyond what exists today).

      So the actual situation is that mankind is screwed. Once 90% of the human race dies off, then mankind may be at the point where a genuinely sustainable future may be within reach.

      Nobody wants to admit that there is no energy future that doesn’t involve most of the human race dying off first.

    3. I’m not ignorant to problems in the romanticism many Americans have with wind and solar. But, @54e240f9ebf9851dd71e0b384d753e82:disqus hits the nail on the head by pointing out that these numbers are unfairly prioritizing established oil while not accounting for big picture factors that should be accounted. It’s never as simple as dollars and cents, and tough to compare a highly entrenched, subsidized and politically protected industry with some that are in infancy.

  4. NRG is cited as an enterprise the considers fossil fuel dependency too risky. Rightfully so when they have invested in California Solar projects that yield tremendous returns on capital as a result of California’s subsidy and mandate programs. There is an excellent article from the November 11, 2011 New York Times Science and Environment section entitled “A Gold Rush of Subsidies in Clean Energy Search” that describes in great detail the “financials” of a large commercial NRG solar project in California. Pay particular attention to the attending graphic. This is not a concentrated solar project. The money quote,

    “P.G.& E., and ultimately its electric customers, will pay NRG $150 to $180 a megawatt-hour… that was about 50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant. While neither state regulators nor the companies will divulge all the details, the extra cost to ratepayers amounts to a $462 million subsidy, according to Booz, which calculated the present value of the higher rates over the life of the contracts clean technology win.”

  5. In case you have forgotten, wind and solar make electricity that keeps the lights on in our homes. The Keystone XL pipeline will move oil to refineries where it is converted into gasoline fuel, diesel fuel, and many chemicals we all use. It does no good to compare the number of jobs created because W&S and the KXL pipeline are used for different purposes. Second most major wind projects and most major solar projects would shut down if not for government subsidies. The KXL design and construction is being paid for by the private sector. The oil that XL moves will be able to compete economically with existing sources of oil with no subsidies.

    1. Wind keeps the lights on when…..the wind is blowing.

      Solar keeps the lights on when…..the sun shines and it is daytime.

      Sooooooooooo…..what keeps the lights on when wind and solar dont work. For instance, when it’s -20 in Kansas at 2 am?

      Oh yeah….the backup coal fired power plant, or the oil fired plant, or the nuuclear power station!

      What is happening in Germany now already happened in Spain and is spreading through Europe much like it will here over the next few years…..renewable energy is bankrupting itself.

        1. Hey smarty pants….thanks for the question.
          In Germany electricity rates have skyrocketed under the weight of solar and wind subsidies and rate guarantees….which cost the average Kraut about 50% more on their electric bill than if solar and wind were not propped up with phony economics. Second, the damned Krauts are emitting more co2 (in case you are a scare monger) than prior to their energiewende. WOW and WOW.
          And, like I wrote above, just like everywhere else on the planet….Germany fails to produce a single watt from solar when the sun goes down or when it is cloudy…..for the sun, that is half the day….for the clouds, that is half the winter. So coal buddy. Fire it up.
          Germany is ending tariffs and subsidies bc they cost too much and produce….ohhhhh uhhhhhh…..more co2 as a result and everyone has less money to spend except the govt and big bad coal.booooooohooooooo
          So….why does fuel cost 8 or 9 bucks a gallon in Europe?……taxes you ignoramous……drive up the cost of everything by taxing us all.

          You just dont get it….global warming or whatever the nom de geurre is, is a farce and we are being forced to suck on bad decisions that make cheap energy unaffordable and expensive energy more cost effective by jacking your pockets and mine for the spare change.

          You tell me what is happening in Germany

  6. “Leaving job creation the only measurable impact…”

    Say nothing of the extra supply of oil dampening the need for oil elsewhere where those supplies are then sold to us more cheaply.

    Supply and demand. I understand all of you liberals took the sociology course, Economics, but now we are in the real world and it is time to start using the business class of Economics.

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