But like any debate, there's a bigger picture involved that affects both sides.
The oil is coming from somewhere
The Keystone XL pipeline would provide about 830,000 barrels of Canadian oil per day to the U.S. Gulf Coast. What happens after that is a big question.
If the oil is then shipped off to some other country, as is likely the case, then the long-term impact on jobs and prices gets complicated, but I'll get to that in a minute. If the oil stays in the U.S., we may be able to reduce reliance on other countries for oil, a good thing for almost everyone. Almost.
This scenario throws that whole "job creation" debate off kilter. TransCanada estimates that the project will create between 2,500 and 4,650 jobs, not somewhere around 25,000 as the media has reported. The indirect impact is up for great debate, but since most of the materials won't be sourced from the U.S. and construction moves quickly through rural communities, it won't be 119,000 person years, as the Perrymann study commissioned by TransCanada suggests.
What's being lost in the shuffle is the amount of jobs that could be destroyed if Keystone XL's oil stayed in the United States. Based on Overseas Shipholding Group's
If the U.S. keeps the oil, the shipping industry could lose more jobs than the project creates in just a few years. The pipeline doesn't seem to be quite the long-term job creator that some would like to think.
A study by the Cornell University Global Labor Institute found that there could be four other job killers in Keystone XL. Higher fuel prices in 15 states, environmental damage, costs related to air pollution and carbon emissions, and a negative impact on "green" jobs were cited as having a potentially negative impact on jobs as well. Like indirect job calculations, these claims are soft at best, but they're worth keeping in mind.
What if the oil doesn't stay here?
The truth is, there's now a wider understanding that Keystone XL is actually being built to divert oil from Midwestern refineries, where oil is relatively cheap, to the Gulf, where it's more expensive. This would benefit Canada, which would profit from the higher prices.
Cornell's study concludes that this diversion away from Midwest refineries could raise gas prices in the Midwest by $0.20 per gallon, and Bloomberg has reported similar numbers. So the same states that would have a few thousand incremental jobs created over the next few years to build Keystone XL would end up paying for those jobs at the pump.
Of course, importing crude and exporting refined product isn't a bad thing for the U.S. and would probably help North American production overall. But this is rarely a topic of discussion in the fuss over Keystone XL.
Environmentalists don't have it right, either
I'll admit that I hug a tree from time to time, but the environmental impact of the Keystone XL pipeline isn't that much more than any other oil source.
You could argue that oil from oil sands is more energy-intensive to refine, but it could be replacing oil that's shipped from the Middle East, saving the fuel burned to make the round-the-world trip. TransCanada will probably soon release a new path through Nebraska, and if it avoids the aquifer there, I see little difference between Keystone XL and the thousands of miles of pipeline that criss-cross the country.
The impact on investments
I originally thought the big losers from Keystone XL would be oil shippers. But if most of the refined product from Keystone XL is exported, Frontline
This could also be a positive for companies drilling in the Bakken shale. Kodiak Oil & Gas
A Foolish prediction
I still think that Keystone XL will be approved eventually. Few realize that the route wasn't even set in stone when Obama denied it the first time, and there's too much political pressure to deny a complete application. No matter how small, the impact will really be on jobs.
One of the reasons Keystone XL is such a hot-button topic is high oil prices. Well, we have a free report that highlights three great stocks that will profit from oil over $100. Get free access.
Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.
Motley Fool newsletter services have recommended buying shares of Statoil A and TransCanada. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.