Guest opinion: Keystone XL will boost crude prices in Montana

2014-06-16T00:00:00Z Guest opinion: Keystone XL will boost crude prices in MontanaBy STEVE THOMPSON and GREG FINDLEY The Billings Gazette
June 16, 2014 12:00 am  • 

Does this sound familiar, Montana?

Lobbyists for a powerful energy company have a proposal that will squeeze dollars from every Montanan. They sweet-talk Montana politicians to do their bidding, then mount a catchy public relations campaign to convince voters their plan is in fact in the public interest.

Lawmakers and the public are mesmerized. The energy company wins the day. Montana energy is liberated to the freedom of a larger marketplace rigged by unscrupulous companies. Soon thereafter, Montana energy prices that were among the lowest in the nation shoot up, and many Montanans lose once-secure jobs.

That’s a recap of the deregulation debacle of 1997, engineered by the late Montana Power and Enron, which Northwestern Energy CEO Bob Rowe recently called “the largest public policy mistake in the history of Montana." But it could also be the looming story of the Keystone XL Pipeline. Once again, Montanans are being sold a pig in a poke, this time by TransCanada and Big Oil.

Montana is among a handful of states with the cheapest gas prices in the nation. That will not continue if Keystone is approved.

Oversupplied markets

Easy access to Bakken oil and Canadian heavy crude is the main driver of Montana's relatively low fuel prices. Big Oil sees that as a problem. Crude markets in Montana and the Midwest are "oversupplied," according to an assessment for TransCanada by Purvin & Gertz, a Texas-based oil economics firm. TransCanada's Keystone pipeline will increase prices by "removing this oversupply."

Carl Casale, president of CHS Inc., recently made the same observation, half-joking that workers at his profitable Laurel refinery should join the Sierra Club to oppose the pipeline. “There’s so much crude oil trapped in the mid-continent right now — and we have one refinery in Laurel that is served by a pipeline out of Canada. Pretty good place to have one,” Casale said. That is, until Keystone connects Alberta to Gulf Coast ports.

And that's exactly what the TransCanada pipeline company promises its clients: Unprecedented globalization. Tar sand bitumen and Bakken crude will be refined thousands of miles away and exported around the world. Big Oil will profit, as always, while Montana drivers pay higher fuel prices and labor watches Montana refineries turn less competitive.

Don’t believe the line that Keystone is about American energy independence. That’s Madison Avenue hoopla. Keystone is largely about export and global markets. The United States already exports more refined fuels than we import, and that trend will accelerate if Keystone is built.

Raw deal for consumers

If the pipeline is built, the Phillips 66 and ExxonMobil refineries in Billings will pay as much for crude oil as sister refineries in Houston. That's just fine with Big Oil CEOs. After all, they're equally at home in Baghdad, Moscow and Singapore. Keystone might make narrow economic sense for Texas or Louisiana, but it’s a raw deal for consumers and workers here in Montana.

Maintaining the lowest gas prices in the nation is just one reason Montanans should oppose the Keystone XL Pipeline. More important is the future of our children. The Alberta tar sands are a very dirty fuel, contributing more than their share to childhood asthma, water pollution, and climate change. Tar sands, along with coal, are the world's largest source of carbon pollution per energy unit produced. Keystone will hardwire that pollution for decades to come, steadily warming the planet.

Yet Montana politicians, Democrat and Republican alike, march in the Keystone parade. Evidently, they don't care enough about future generations to say no. After all, what have future generations ever done for them?

But after the embarrassing deregulation fiasco of 1997, you might think they'd have a bit more concern for the current generation of voters that put them into office.

Steve Thompson is a volunteer coordinator of Glacier Climate Action in Whitefish. Greg Findley runs a travel business in Bozeman.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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