Staydecent

Some Keystone Xl Maths

Posted on
April 1, 2020

https://www.cbc.ca/news/business/analysis-alberta-invests-in-keystone-1.5516144

Alberta's United Conservative government recently announced they are investing $1.5 billion directly into the Keystone XL pipeline, plus a $6 billion loan guarantee. They must feel quite confident that oil prices will go back to historic highs?

The loan guarantee means Alberta is on the hook for $6 billion, even if the project never completes. What's to prevent Saudi Arabia from starting another price war in the future?

So, how many jobs will this create? 1,400 direct and 5,400 indirect jobs in Alberta during construction. Keystone XL is expected to be in service by 2023, so, three whole years.

The Keystone XL website mentions 2,800 jobs in Canada. The Calgary Herald claims 2,600 jobs. I've chosen 7,000 to cover any indirect jobs the project may contribute to.

So the UCP is putting up $6 billion dollars for ~7,000 jobs over three years. This project isn't without risk, so those jobs aren't a 100% guarantee.

What if the UCP just paid 7,000 people a good salary? $100,000 seems like a good salary to me.

$6,000,000,000 /
   $100,000
   = 60,000

Okay, so $6 billion could pay 60,000 people a salary of $100,000 for one year. But, the Keystone XL is going to create ~7,000 jobs for an incredible three years!

60,000 / 3
 = 20,000

$6 billion could pay 20,000 people a salary of $100,000 for 3 years. To pay ~7,000 people a salary of $100,000, $6 billion would cover nearly a decade.

What am I missing? Is my math wrong? It very well could be.

I'm not saying we should just hand out $6 billion dollars to a fraction of the population. I'm just illustrating how little benefit there is in this project for such high risk.

It seems even more ridiculous when Alberta's UCP just layed off 20,000 education workers. Especially since we can see evidence that education has economic benefits.