Big Canada Pipelines, KXL: Job Creation Spans Many Sectors

Researched by Industrial Info Resources (Sugar Land, Texas)--One of the stumbling blocks for the Keystone XL Pipeline (KXL) project by TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) has been the claims by its supporters to be a "job creator" for Americans. Pipelines do not require many people to operate. TransCanada places its estimates for permanent positions created in its operations section for KXL at around 50. However, TransCanada also is quick to point out how many construction jobs will be created as part of KXL's construction, and how many manufacturing jobs will be created indirectly to handle the pipeline's demand for parts.

Another sector of jobs that must be considered are those that will come about after completion of the KXL, to accommodate storing new crude volumes and processing larger quantities of Western Canadian Sour (WCS) crude oil.

For more information on the KXL and its peers, see August 24, 2015, article - Canadian Regulatory Agencies Becoming Bigger Headache for Pipeline Companies; August 31, 2015, article - Big Canada Pipelines, KXL: The Interstate of Takeaway Pipes, Bypasses the Sights in Midwest America Along Enbridge's 'Route 66'; and September 1, 2015, article - Will Canadian Oil Spill Affect Proposed Pipelines and National Election?.

The completion of the KXL pipeline would mean an additional 500,000 BBL/d of WCS making its way from Alberta to the storage hub of Cushing, Oklahoma. Cushing's current situation is such that incoming pipeline capacity and outgoing are roughly balanced, with future incoming capacity from the DJ Basin, via the 200,000-BBL/d Saddlehorn Pipeline, a joint venture between Magellan Midstream Partners LP (NYSE:MMP) (Tulsa, Oklahoma), Plains All American Pipeline LP (NYSE:PAA) (Houston), and a subsidiary of Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas), and the 130,000-BBL/d Grand Mesa Pipeline by NGL Energy Partners (NYSE NGL) (Tulsa).

These pipelines are balanced by Plains' 200,000-BBL/d Diamond Pipeline and planned Red River pipeline project which would accept Cushing crude volumes of 120,000-BBL/d in Duncan, Oklahoma, and transport them to Longview, Texas.

When KXL shifts this balance in favor of incoming crude capacity, storage companies in Cushing likely will need to expand to accommodate the increased need for storage. The increased influx also will create more demand for Cushing takeaway capacity. Likewise, with a larger amount of high-sulfur heavy WCS crude available for cheap, refiners who wish to take advantage of that source may have to retool or modify existing infrastructure to accommodate this higher percentage of heavy sour crude. Building new tanks, building new pipelines, and modifying refinery infrastructure is all material- and labor-intensive work--but could create more construction work for Americans during and after KXL's construction.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.