The Billings Outpost

Maybe just build half of Keystone XL pipeline

Political Potpourri

Brad Molnar

For a political eternity we have been waiting on the decision of President Obama on whether to build TransCanada’s Keystone XL Pipeline to carry tar-sand oil from Alberta to the Gulf Coast.

His stated concerns are environmental degradation if there is a rupture. His supporters, the environmental lobby, have their panties in a twist because of the carbon footprint in procuring the oil from the tar sands and in using the refined product in our cars. I cannot untwist their panties by press time so shall not pursue that endeavor.

Before you grab the tar and feathers, know that I was the one who started the process to allow an “on ramp” in Baker to permit the injection of Bakken oil into the XL pipeline, and I approached Canadian officials to help make it happen.

As a proud member of Local 1686, I have taken the pipeline safety construction and environmental remediation course so I can help build the line. So, no, I am not opposed to building the pipeline, at least not the top half, which ends at the oil hub of Cushing, Okla. What I am against is relegating this opportunity to 30-second political sound bites instead of having an intelligent discussion of the issue. 

During the last election cycle, every Montana candidate for federal office loudly proclaimed we should build the XL for sorely needed Montana jobs and energy independence. Sen. Jon Tester and Rep. Steve Daines still talk that way. I have no idea why.

The hand that feeds you

Readers of this column recognize that our benefactor, TranCanada, wanted to build the Chinook electrical transmission line to carry wind power from Harlowton to California.

The fact that it tied into our transmission lines at Colstrip and could also carry our current coal- and hydro-generated electricity to the same markets and crush the Montana economy was downplayed by the Schweitzer administration. Nice guys all.

You may recall that candidate Brian Schweitzer envisioned a dozen refineries being built in Eastern Montana to handle Bakken oil. One, with a 20,000 barrel per day (bbd) capacity, has broken ground. Another is in the final planning stage and a third is seeking financing.

All will be in North Dakota because the Montana permitting system, and incumbent judges, allow never-ending lawsuits after permits are granted. Neither the recent Legislature nor our congressional delegation has addressed this issue, so here we sit.

Energy security

When TransCanada’s XL Pipeline passes through Montana, it will pick up 100,000 bbd of Bakken oil and then carry a total of 830,000 barrels per day headed south.

As it picks up more oil from domestic stocks, the capacity will be a minimum of 1.1 million barrels per day delivered to Gulf state refineries for further refining and export to foreign lands – unless we match the world price – and the supply has not been contracted for. 

The $10 billion expansion of the Motiva Refinery in Port Arthur, Texas, is a prime example. Originally announced as being built to handle Saudi crude delivered to the United States, it now is admitted that the Motiva expansion was designed to handle Canadian crude to serve the growing Latin American diesel fuel market.

The Motiva Refinery is a 50-50 venture of the Dutch and Saudi royal families. Their two refineries on the Gulf of Mexico can alone process more than 50 percent of the XL pipeline’s capacity for export. The balance of the Port Arthur complex can easily handle the rest.

Jobs

The general contractor for the construction of the XL will be Halliburton, and it will be a union job. The contract calls for the contractors to be able to bring 50 percent of their employees with them from the state or country they come from.

The contract also calls for a rollback of the last two wage agreements, so after the usual union payroll deductions, the pre-tax wage for a union laborer will be a whopping $16.90 per hour in Montana. The Montana portion is expected to last for 90 days. Are we now a Third World nation begging for development?

Why?

Why would it not be better to fast track the capacity to build the necessary refineries to serve the U.S. market with North American oil and reduce transatlantic shipments from unfriendly sources and achieve real energy and economic security? Why not allow the value-added jobs of building and manning new refineries to serve American families and employers?

Why export any petroleum until our domestic needs are met? After all, it is a matter of national security and jobs.

Brad Molnar served eight years on the Montana Public Service Commission and eight years in the Montana Legislature.

 

Copyright 2012 Wild Raspberry Inc.

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