New Wind Project Shows Why Rejecting Keystone Was the Obvious Choice

A massive new wind energy transmission project from the Houston-based company Clean Line Energy passed an important procedural milestone last week. And the timing perfectly demonstrates why projects like the Keystone XL oil pipeline are facing increased opposition from the public.

On Friday, President Barack Obama exercised his authority to deny permission for construction of the oil pipeline project, just two days after his administration gave a thumbs-up to the required environmental review for the wind energy project.

The fossil fuel lobby has routinely accused the president of picking energy "winners and losers," and at first glance the two projects seem to support their case. After all, both involve transporting energy from one place to another; both require the taking of right-of-way from property owners; and both will create relatively few direct and permanent jobs once completed. However, a comparison between the two reveals some critical distinctions.

Wind energy transmission and jobs, jobs, jobs

Clean Line Energy still has some steps to complete before shovels go into the ground, but the company's 720-mile Plains & Eastern wind energy transmission project passed an important hurdle last week when the Energy Department released its final Environmental Impact Statement (EIS) for the project.

At four times the wattage of the Hoover Dam, Clean Line is billing Plains & Eastern as the "largest clean energy infrastructure project in the U.S.," and in that regard it is expected to create thousands of temporary construction jobs, just like Keystone XL would have. However, the comparison ends there. Clean Line anticipates that construction of the new transmission line will also support hundreds of manufacturing jobs in the vicinity of its route through Oklahoma, Arkansas and Texas. That's a clear contrast with Keystone XL, for which TransCanada procured steel pipe manufactured overseas after promising that the bulk of it would be made in the U.S.

When Clean Line announced the Energy Department's seal of approval, its president, Michael Skelly, noted that the benefits of a private-sector investment of $1 billion in the transmission line would be amplified by enabling the wind-rich Oklahoma Panhandle region to take full advantage of its renewable energy resources. According to Clean Line, "several billions of dollars" will be invested in new facilities in the Panhandle.

Clean Line also emphasizes that the wind energy transmission project will directly benefit consumers in the mid-South and Southeastern U.S. -- including millions of customers served by the Tennessee Valley Authority (TVA) -- with access to an ample supply of clean, competitively priced electricity. These states have less than optimal wind energy resources, and the new line will provide them with 3,500 megawatts of electricity sourced from wind.

Arkansas will also get 500 megawatts of wind energy from Oklahoma through the construction of a $100 million converter station, about enough to power 160,000 homes each year.

In Tennessee, local officials are already looking forward to the economic boost provided by new supplies of clean energy, as described by the president of the state's Chamber of Commerce and Industry, Catherine Glover:

"Tennessee is well-positioned to be a clean energy leader, and this important infrastructure project will help attract new business investment and spur job creation in the state."

Speaking of the TVA: In 2010, Clean Line commissioned a report to tote up the economic benefits of the project to southeastern states, with a particular focus on TVA's aggressive pursuit of sustainable new sources of electricity. Take a look at some of the points listed in the report, keeping in mind that the Keystone XL pipeline was not designed to serve U.S. energy consumers:

Lower air pollutant emissions: The Clean Line Project is forecast to decrease 2016 U.S. emissions of 8,543 tons of NO x , 37,641 tons of SO2, 14,261,363 tons of CO2, and 90 pounds of mercury. The CO2 reduction is equal to eliminating approximately 2 million cars.

Creates renewable competition: The project increases competition in renewable supply in the Southeastern U.S. and will lower costs to consumers of using renewable power.

Greater transmission reliability: The project increases transmission capacity and grid reliability. This is especially important in light of potential for coal power plant retirements and the lack of inter-regional transmission projects.

Lower water consumption: The project lowers use of thermal power plants, and hence, TVA coal power plant water use by 1,273,700 acre-feet per year in 2016.

Lower spot wholesale market power prices: TVA wholesale power prices will decrease $4 per megawatt in 2016. This is due to the 7,000 MW of zero variable cost power injection.

Increased jobs: The project results in new jobs for construction and operation of the wind power plants and transmission lines.

Other economic benefits: The project also provides indirect economic benefit (i.e., multiplier effects), tax revenues, royalties, manufacturing development, and other economic development opportunities.

Meeting domestic production and stable annual power prices: The project provides greater ability to meet renewable standards which results in domestic production of electricity with a stable annual price, i.e., no annual fuel price uncertainty.

The Keystone XL pipeline

Against this backdrop, now take another look at the Keystone XL pipeline. The project would have brought crude oil from oil sands fields in Canada, down through the midsection of the U.S. to Gulf Coast refineries. It was touted as a badly needed job-creating engine for the U.S. in the aftermath of the 2008 global financial collapse, but a State Department analysis concluded that aside from temporary construction jobs, the benefit to the U.S. would add up to 35 permanent positions.

For those 35 jobs, property owners and communities throughout the length of the pipeline would be saddled with the risk of a pipeline leak, break or other mishap. The Pegasus pipeline disaster of 2013 and the 2010 Enbridge pipeline disaster clearly illustrate the impacts involved.

That also becomes clear when you look at the reaction of two key federal agencies to the Environmental Impact Statement (EIS) for Keystone XL, which was prepared by a TransCanada consultant on behalf of the State Department. The Environmental Protection Agency gave the EIS a polite but strongly worded failing grade, and the Interior Department red-flagged it for potential impacts on national parks.

Ironically, while the Oklahoma economy stands to benefit enormously from the new wind energy transmission project, one of its top elected officials is U.S. Senator and well known renewable energy antagonist James Inhofe.

Given Sen. Inhofe's frequent objections to President Obama's energy policies, it's little wonder that he was excluded from the celebratory press release that Clean Line issued last week (here's that link again), or that he declined to mark the occasion with his own statement of support. However, he did have something to say about the Keystone XL permit denial, so we'll leave you an excerpt:

"It comes as no surprise that after years of unnecessary delay and political gamesmanship, the president rejected the Keystone XL pipeline. His action denies tens of thousands of Americans of new, well-paying jobs and demonstrates his ambivalence towards American energy independence."

Image (screenshot): via Clean Line Energy.