NewsMontana Politics


If Keystone XL pipeline is toast – what are true impacts for Montana?

Construction jobs, tax revenue lost
Keystone XL Pipeline route through Montana.
Posted at 6:08 PM, Jan 29, 2021
and last updated 2021-01-29 20:08:46-05

Editor’s note: This is the first of a two-part series on the Montana impacts of President Joe Biden’s orders on oil-and-gas development.

As President Biden halts the Keystone XL Pipeline and oil-and-gas leasing on federal lands, Republican critics here are accusing him of ending thousands of jobs and costing the state millions in tax revenue.

The two orders, issued in the past week, will certainly impact the oil-and-gas industry in Montana and undercut millions of dollars in potential property taxes – but a closer look reveals that, on some fronts, the fallout is not be as severe as critics portray it.

And, supporters of Biden’s actions say water supplies, the nation’s climate and other parts of the economy will benefit in the long run.

“We look at the big picture and we look at the carbon-dioxide emission content in the Earth’s atmosphere,” says Lance Fourstar, chair of the Assiniboine Council on the Fort Peck Indian Reservation in northeast Montana, near the pipeline route. “I just don’t see how people would choose money over those type of things.”

Still, ending the pipeline will certainly be felt in terms of construction jobs and tax revenue in Montana.

“People have been laid off,” said Alan Olson, executive director of the Montana Petroleum Association. “And, a tremendous amount of money spent on pipe, manufactured in the United States, now has no place to go. There’s been a tremendous amount of investment that’s gone into this.”

Construction on a few miles of pipeline and right-of-way work had begun on the Montana segment of the pipe.

TC Energy, the Canadian firm building the pipeline from Alberta to Texas, said last week it’s laying off 1,000 people because of Biden’s decision -- but didn’t say where those workers are.

However, an examination of environmental documents and information from TC Energy spell out these monetary and employment impacts from the cancellation:

· During construction of the 285-mile section of the pipeline in Montana, 800 to 1,000 workers would have been in the state, for anywhere from nine-to-27 months. Many of those workers would be in “man camps” near Hinsdale, Circle and Baker.

· Only 10 percent to 15 percent were expected to be hired locally.

· A handful of jobs would be needed to maintain the complete pipeline, including a few in Montana.

· TC Energy planned to build a terminal on the pipeline near Baker, where oil producers from the Bakken field in Montana and North Dakota could upload as much as 100,000 barrels of oil a day, for shipping to refineries in Texas or elsewhere.

· Property taxes paid by the completed pipeline would be $63 million a year in Montana, divided among the state, local school districts and local governments in the six counties along its route.

McCone County Commissioner Jim Moos told MTN News that the county and local schools need plenty of upgrades to infrastructure and could certainly use the influx of cash.

“There is no end to the things that would benefit if we had the pipeline,” he said. “It would be a lot of things we’ve put off because we just don’t have the money.”

He also noted the presence of the pipeline would help the local rural electric cooperative, by adding a big, new customer that could offset costs for its other customers.

Olson, of the Petroleum Association, said the Baker terminal would reduce transport costs for local oil producers and thus increase the payment they get for oil.

“The more options we have, the better price we can get for Montana crude,” he said. “Any time we can do something to increase the value of Montana crude oil, everyone in Montana benefits.”

Opponents of the pipeline, however, couldn’t disagree more.

Whitney Tawney, executive director of Montana Conservation Voters in Bozeman, said building the pipeline would accelerate Canadian tar-sands oil development that is harming the climate – just as the country is starting to transition to cleaner energy.

“The production has long-term, bad effects on our environment and is not supportive of how we need to move for our future,” she said. “If you’re saying the Keystone XL Pipeline matters more, that means there is 71,000 jobs (in the outdoor recreation economy) that don’t matter.”

Fourstar, who lives in Wolf Point, said the Fort Peck tribes are worried not only about climate change, but the threat the pipeline poses to a local water system and the health of the community.

He said when he and others led a prayer protest near a Keystone work site last spring, they saw many workers not wearing masks and not taking other precautions to avoid the spread of Covid-19. Many other workers from outside the state would be arriving during construction, he added.

Spikes in the disease on the reservation started last summer and have killed many people, Fourstar said.

“For the past year, a lot of us, as activists, have been adamant against the introduction of that disease into our communities,” he said. “I have a lot of relatives who’ve passed away.”

Fourstar said he realizes the pipeline would bring jobs to some locally, but maintained that the pipeline eventually would deteriorate and contaminate the local water system.

“If you support the pipeline, you’re actually contributing to the future poisoning of future generations, and current generations,” he said. “It’s not worth it. …

“Anybody who thinks it’s OK to come into our area, to put food on their table – they’re not thinking about the drinking water on our tables.”

Next: What’s the impact of ending oil-and-gas leases on federal land in Montana?