Keystone oil pipeline finds champions in Montana Democrats eyeing local benefits

The fact that Senate Finance Committee Chairman Max Baucus (D-Mont.) has fought so hard for the Keystone XL pipeline underscores the changing politics of oil: A global commodity has become a local issue.

“All I care about is working right now to get the most jobs for Montanans, and Keystone is a part of that solution,” Baucus said in an interview. “To me, it’s a no-brainer. . . . People at home, they want this.”

Baucus has emerged as one of Capitol Hill’s fiercest proponents of the project, largely because the pipeline extension will mean that oil extracted from parts of Montana and North Dakota will have an easier route to Gulf Coast refineries.

He not only has lobbied President Obama and Secretary of State Hillary Rodham Clinton — whose department is reviewing Trans­Canada’s proposal to construct a 1,700-mile pipeline between Alberta, Canada, and the Gulf Coast of Texas — but also pushed unsuccessfully last month for language in the highway bill that would have greenlighted the project over the administration’s objections.

For many groups, the question of whether to ship hundreds of thousands of barrels of crude from an area in Alberta known as the oil sands, or tar sands, is a national question of either economics or the environment. Advocates say it will secure a reliable energy supply for the United States and spur short-term construction jobs — TransCanada estimates it will directly generate between 5,000 and 6,000 jobs two years in a row. Foes say that extracting energy-intense bitumen and burning it will accelerate climate change to dangerous levels by emitting a massive amount of carbon into the atmosphere and that a spill along the route could damage sensitive habitat.

But in the regions the pipeline would pass through, local concerns are more powerful. Many Nebraskans — including the state’s governor, Republican Dave Heineman — raised concerns last year that the initial route could threaten the state’s Ogallala aquifer, a critical drinking-water source, with a potential spill. Obama first delayed the permit in November and then rejected it in January in the face of a congressionally mandated Feb. 21 deadline.

Now TransCanada has proposed alternative routes through Nebraska. Heineman supports expediting the project, and the State Department is reviewing the pipeline again. In Montana, the majority of voters back it because TransCanada has included an “on-ramp” that will transport Bakken oil to the Gulf Coast. The oil is currently moved on rail cars, trucks and smaller pipelines.

At first, Bakken oil will account for 7 percent of Keystone’s 830,000-barrel-a-day supply. TransCanada officials say U.S. oil could eventually account for up to 25 percent of the pipeline’s shipments.

“It is a key step that could ensure that the Montana product has an outlet, and they can drill at the same level they are drilling now,” said Tony Preite, director of economic development outreach for Montana State University Northern.

In October, a Montana State University Billings poll found that 64 percent of Montanans supported the pipeline, with 14 percent opposed and 22 percent undecided.

“In Montana it’s very hard to find an elected official who opposes XL,” said MSU-Billings political science professor Craig Wilson, who conducted the poll. For Democrats such as Baucus and his Senate colleague Jon Tester, Wilson said, “they’re not going to get elected without significant support from the independents who support Keystone.” Tester faces reelection this fall; Baucus is up in 2014.

Many Montanans who are focused on rural development in the state see the Bakken oil field and Keystone XL as critical. Stefani Hicswa, president of Miles Community College in Miles City, Mont., said she just hired a full-time commercial driver’s-license instructor to help train students so they can transport Bakken oil and the equipment needed to drill it.

“If Keystone is coming, we need to have a workforce prepared and ready to go to work,” she said. “What we’re trying to do is customize our training for the companies in our area.”

Al Ekblad, executive secretary of the Montana AFL-CIO, said the 800 construction jobs TransCanada predicts the pipeline will bring to the state for 18 months will provide not just wages but also health insurance and pension benefits that will help many of his members recover from the recession.

“These are jobs they look at to get well,” Ekblad said. “It allows them to pay off the bills they’ve accumulated.”

Not everyone in Montana has embraced the pipeline. Irene Moffett, whose farm and ranch were along the project’s route until it changed, remains concerned a spill could pollute the soil and water.

And she called the 60,000 barrels a day of Bakken oil that Keystone would initially transport “just a drop in the bucket.”

“If they were going to put a pipeline in for the Bakken,” she said, “that would be a different thing.”

But the state’s Senate delegation has not expressed such reservations. Earlier in the permitting process, Baucus successfully lobbied for a design change in which TransCanada agreed to use thicker pipe along the Montana portion of its route. Tester had sought to add language to the highway bill that would require the oil shipped through the pipeline to be refined and sold in the United States, but it remains uncertain if such as provision could make it into law.

Obama officials have not announced when they will make a final decision on the permit, but it is unlikely to be before the November election.

“The process need not — should not — be politicized,” White House spokesman Jay Carney told reporters June 4.

In the meantime, Montana Republicans will try to use the issue to deny Tester a second term in office.

“Tester bankrolls his campaign with the money from the same anti-job environmentalists leading the fight to kill the Keystone XL,” Montana GOP spokesman Chris Shipp said in an e-mail.

It is unclear whether these attacks — or efforts to tie Tester or Baucus to Obama’s delay of the pipeline — will succeed. In the meantime, Baucus acknowledged it might be hard to force a quick decision on the pipeline, but he said he would keep trying.

“I’ll continue my fight for Keystone because it means jobs for Montana and more independence from foreign oil,” he said after the Keystone provision was dropped from the highway bill. “We’ve done the analysis, and now it’s time to cut through the red tape and put Montanans back to work.”

Deborah Gordon, a senior associate at the Carnegie Endowment for International Peace, said the fact that technology is making new oil deposits accessible in nontraditional areas has changed the way politicians deal with energy.

“This is transforming energy into an every-place, every-man-for-himself play,” Gordon said.

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