HELENA – Gov. Brian Schweitzer said Tuesday that a recent ruling by the state Public Service Commission means Montana oil companies have a better shot at putting their oil in a proposed pipeline from Canada to the Gulf of Mexico.
TransCanada Corp., seeking multistate approval for the 1,980-mile Keystone XL pipeline, has faced political pressure to let Montana and North Dakota crude oil into the pipeline and has said it is considering the plan.
Schweitzer says Montana now has a way to force the issue if necessary.
In a recent ruling, the Montana Public Service Commission decided it can intervene in connection disputes. If a Montana oil company doesn’t feel like it is getting a fair shot at hooking into the pipeline, it can take a case to the Helena-based PSC.
TransCanada, in a statement, took no dispute with the ruling or the governor’s take.
Company spokesman James Millar said TransCanada is “very excited with the prospects now of moving Montana and North Dakota oil to markets.”
Montana oil producers who don’t have access to a pipeline have to pay as much as $15 to $30 a barrel to ship it by rail, Schweitzer said. A pipeline is a much cheaper way to move crude and would make Montana oil more competitive, he said.
Schweitzer said TransCanada has told him it will let Montana oil onto the line, but the PSC ruling means Montana has a way to make sure that happens.
“I would say in this case we will trust and we will verify by regulatory authority,” the governor said in an interview. “It is another good day for Montana oil production.”
PSC chairman Greg Jergeson said TransCanada agreed to the so-called common carrier status because it sought benefits that go along with it, such as the use of public rights of way.
Jergeson said Montana oil companies must try to make an arrangement with TransCanada for hooking into the pipeline, and hash out who pays for those costs and how. If negotiations fail, the PSC can get involved and issue an order.
“I think it has enormous potential for companies interested in developing Montana resources to be able to put together their programs in a financially sound basis,” Jergeson said.
Schweitzer said he supports the pipeline project, which has run into increasing criticism from environmentalists who argue using crude oil from the Alberta tar sands would increase greenhouse gas emissions.
Schweitzer said the pipeline could bring in as much as 5 percent of the country’s oil supply.
“It decreases our dependence on these petro-dictators around the world, and that’s good,” Schweitzer said.
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