Amid Protests, Montana Welcomes Keystone

By Beacon Staff

At a time when the national conversation is focused on employment, the U.S. Department of State is considering a proposed oil pipeline that promises to create thousands of high-paying jobs from Montana to Texas but faces stiff opposition from both environmentalists and less-traditional foes such as Nebraska’s Republican governor.

Alberta-based TransCanada’s Keystone XL pipeline project proposes building a nearly 1,700-mile underground pipeline to transport crude oil from the oil sands region of Alberta to refineries on the U.S. Gulf Coast at a cost of $7 billion. The State Department says the pipeline, which would enter the U.S. in northeastern Montana, could carry 830,000 barrels of oil per day.

On Aug. 26, the State Department released a final environmental impact statement, concluding the pipeline would have no significant impact on the environment, prompting an outcry from the environmentalists who say the review is inadequate. Protests broke out in Washington D.C. and as of late last week more than 1,000 protesters had been arrested.

The State Department maintains that the review is not the same as approval and is expected to make its final decision by the end of the year.

In Montana, Republican Rep. Denny Rehberg is calling for the project to move forward to “create real jobs,” while Democratic Sens. Jon Tester and Max Baucus have also expressed support while stressing the importance of proper land stewardship and safety.

“The bottom line is we must get serious about an energy policy that puts America in the driver’s seat while bringing much-needed jobs to Montana,” Baucus said in a statement released the day the State Department’s 1,000-page report came out.

Erich Pica of the environmental group Friends of the Earth, which has been tracking the Keystone XL proposal closely, was critical of the report. Pica noted that the Environmental Protection Agency characterized the State Department’s first two draft environmental reviews as “inadequate” and “insufficient.”

“Whether to approve this pipeline is the most important environmental decision President Obama will make before the election,” Pica said.

Part of the appeal for Montana’s Keystone supporters is TransCanada’s decision to allow an on-ramp in Baker that would enable oil operations in the eastern part of the state to connect to the pipeline, increasing access to refineries across the country and global markets.

Gov. Brian Schweitzer had lobbied hard for the on-ramp, threatening to hold up the project if TransCanada didn’t agree to it. Dave Galt, executive director of the Montana Petroleum Association, said last week that the on-ramp “will improve the value of Montana oil.”

“We suffer from transportation costs,” Galt said. “We have more oil than capacity to get it out of Montana. This is a good thing for producers in the Williston Basin.”

Galt said the pipeline will generate “significant tax revenue” and “high-paying jobs,” an opportunity that resonates with many Montanans, including the state’s lone congressman. Rep. Rehberg, who had written a letter to Secretary of State Hillary Clinton in April supporting the pipeline, recently said Keystone will “help bolster economic growth and provide national energy security.”

“It’s unfortunate this pipeline has been delayed, but I’m glad the federal bureaucracy is finally beginning to move,” Rehberg said. “I’m going to hold their feet to the fire and make sure this deadline is met. It’s time to stop delaying economic recovery.”

Sen. Tester has made clear he supports the project if done properly, though in a mid-August letter to Clinton he notes that two other TransCanada-owned pipelines have either “leaked numerous times” or exploded. While applauding TransCanada for agreeing to 57 additional precautions above regular permitting, Tester argued in the letter that those efforts fall short.

“Given these recent explosions and leaks on these pipelines,” Tester wrote, “I am concerned that the conditions are not sufficient to limit both exposure and risk of incidents to landowners whose property the Keystone XL will cross.”

Tester proposed a set of requirements, including “consistent thickness and quality of steel,” rigorous inspections and an “honest and transparent” compensation process for affected landowners.

The Northern Plains Pipeline Landowners Group, a committee of the Billings-based Northern Plains Resource Council, and 34 landowners recently asked Montana Department of Environmental Quality Director Richard Opper to accommodate Tester’s requests. The landowners are concerned that there’s not a publicly available emergency response plan in the event of an oil spill, a worry also expressed by Tester.

“Having an emergency response plan that emergency responders actually see should not be optional,” Chuck Nerud, a rancher from Circle, said. “How are our volunteer responders supposed to know what to do if they aren’t even allowed to see the plan?”

In an email to the Beacon last week, Tester reiterated his advocacy for a cautious approach.

“This pipeline has the opportunity to create jobs in Montana and increase America’s energy security,” the Democratic senator said. “But it has to be done right and it cannot shortchange rural America.

“My bottom line is that private property rights must be protected and you don’t cut corners when it comes to safety just because a pipeline passes through an area where fewer people live.”

In a fact sheet on its website, TransCanada says it will file an emergency response plan with the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration “before beginning operations,” adding, “Keystone XL personnel would respond and manage clean-up operations should a spill or leak occur.”

Keystone XL is the latest phase of TransCanada’s expansive Keystone system, which already includes more than 2,000 miles of completed pipeline that delivers oil from Alberta to Illinois and Oklahoma. TransCanada notes that emergency response plans were filed for those phases.

Environmentalists argue that even with precautions in place oil pipelines present dangers and they point to various examples of spills and explosions. Furthermore, they say petroleum derived from oil sands, or tar sands, is more corrosive and toxic than oil from other sources, which TransCanada and oil advocates dispute.

Strong opposition to the pipeline is building in Nebraska. In July Dr. John Stansbury, an engineering professor at the University of Nebraska-Lincoln, published a report describing the potential for far more spills and pollution than TransCanada has claimed.

Then on Aug. 31, Nebraska Republican Gov. Dave Heineman wrote a letter to Obama and Clinton asking them to “disapprove TransCanada’s pending permit request” because of the pipeline’s proposed route over the Ogallala Aquifer. Heineman is concerned over “detrimental effects” to the water supply. Sen. Mike Johanns and Rep. Jeff Fortenberry, both Republicans, also urged the president to deny the permit.

But Galt of the Montana Petroleum Association says the ultimate argument is about need.

“Really it boils down to whether or not you think that there’s a need for transportation fuel in America and what that need is going to be in the next 30 years,” Galt said, “and whether or not that need should be filled from a friendly source or an unfriendly source.”

Montanans can join in the Keystone XL discussion by commenting at www.keystonepipeline-xl.state.gov or attending a public meeting on Sept. 27 at Dawson Community College’s Toepke Center Auditorium from 4:30 p.m.-10 p.m.