Pipeline project on its way
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You’ve heard talk about the Keystone XL Pipeline in the news lately. I support the project, and it can and it must be done responsibly. Obviously, the environment is a major concern, but who gets the money and how much is part of the debate. Not surprising, right?
On one side is the existing way we as a country buy oil and its products from countries that sell it to us. Right now we get a huge amount from the Middle East; it comes into refineries established in the Gulf Coast, where it is made into different products (like diesel etc.). Because Gulf refineries are vital to our economy and national interests, they get some benefits from our government, easing their operating costs.
We also get some oil from Canada. Canada’s closer. It costs less to ship oil from Canada to our country. There are refineries and other service providers built up in the Midwest that make their living based upon this Canadian oil coming across the border on trains and trucks.
As it turns out, Canadian oil production is on the rise. They’ve got more and more to sell. Naturally, our neighbors to the north want to take advantage of reduced refinery costs in the Gulf Coast and bypass the Midwest refineries they use now.
There will be less shipping costs. They can sell more oil. Our federal government will get some cash out of it, too, because Canadian oil companies will have to pay tariffs or taxes on the stuff shipped through the tube. But it is not just Canadian companies that benefit, the Keystone XL pipeline will have an on-ramp at Baker, Mont.
That’s tax money for us and a way to move our oil and some from North Dakota, too. Is it better to have hundreds of train cars and trucks transporting our oil? I’ve seen the roads in the northeast corner of our state. They are so bad, they make Polson and Ronan roads look good.
Not only are these trucks polluters, road transporting adds an additional $15 to $20 cost to a barrel, so Montana oil producers receive less money. Most of the Montana pipeline permitting is in place, but Nebraska wants more environmental review. I do agree that we need to be environmentally careful about the pipeline placement.
So right now my thought is that we as a state and nation need to be wise — in the way we put together our agreements or contracts with Canadian oil companies, and in the way we as a nation consider preserving our refinery companies and livelihoods in the Midwest. And how we market Montana oil.
Interestingly, according to one of the Kalispell papers, Governor Schweitzer made a $100 bet that the pipeline would be built. He may be a good gambler, but if the U.S. delays much longer, the oil will go from Alberta and North Dakota to the Pacific coast for shipment to China.
Let me know what you think. E-mail jannataylor@montana.com or call me at 849-6096.
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