Gov. Greg Gianforte got a firsthand look Friday at the material that will go unused and talked with the people who stand to lose income and tax dollars following President Joe Biden’s cancellation of the permit to build the Keystone XL pipeline.
The newly elected governor met with construction heads, energy managers and local officials who voiced their concerns about the president’s decision, which has again stunted a project that is in its twelfth year of development.
“There is no good reason why this pipe is sitting here and not going into the ground,” said Gianforte in front of a pipe yard several miles north of Saco.
For over a decade, construction of the pipeline has been stop-and-go due to parties at odds over issues ranging from environmental safety, economic interests and tribal sovereignty. The planned 1,179 miles of steel pipe would carry an estimated 830,000 barrels of mostly Canadian oil from the tar sands of Alberta to Steele City, Nebraska, linking it to the Gulf Coast.
Despite being mired in legal challenges, the Canadian developer TC Energy received the needed permit from former President Donald Trump in 2019 to bring the pipeline into the states. On his first day in office, however, President Joe Biden followed through on a campaign promise and canceled the permit. Its construction has stopped about 1.25 miles south of the Canadian border. Democrats and Republicans alike in Montana’s congressional delegation have since pleaded with the president to reconsider.
Nearly 300 miles of that pipeline would run through six Montana counties before reaching South Dakota. Although it avoids crossing into tribal reservations within the state, the Billings Gazette previously reported that its route intersects a reservoir that supplies the Sioux and Assiniboine of Fort Peck with their drinking water.
Although most of the 5,000 to 6,000 jobs expected to be created by building the entire pipeline would be temporary, supporters of the pipeline have consistently cited the loss in tax revenue that will accompany abandoning the project.
About 24 miles of the pipeline is set to run through Phillips County, where it enters the United States. County Commissioner Richard Dunbar, who also serves as the president of the Montana Association of Oil, Gas, and Coal Counties, said a pipeline already runs through the county parallel to the Keystone XL pipeline route. The Northern Border Pipeline generates a little over $1 million in property taxes annually for the county, and is its largest taxpayer, Dunbar said. The pipeline carries natural gas from Canada and into the Midwest, and has been in the ground since the 1980s.
“Keystone XL should have been built five years ago. It’s gone through every kind of needed environmental study time and time again. To put all of that work into it, and to have one person shut it down because of politics is just devastating,” Dunbar said.
Dunbar said the estimated tax revenue of the Keystone XL pipeline could be double that of the Northern Border Pipeline, and those dollars would help supplement lost income over a drop in natural gas prices in recent years.
The annual estimated tax revenue for Montana counties generated by the pipeline has fluctuated since its proposal in 2008, starting first at around $80 million. The most recent estimate is at $58 million, according to the Montana Department of Revenue.
The sale of easements for the project by the Montana Land Board in 2012 also garnered $741,000.
Marty Jorgensen, the president of Barnard Pipeline, Inc., said the stacks of pipe outside of Saco could be in the ground by the middle of this year, should Biden immediately grant it permission and the project clears all legal challenges. TC Energy contracted the Bozeman-based company to build one of three sections of the pipeline in Montana. If the pipeline were completely abandoned, he said the pipes that have sat outside of Malta for years would be sold in what he called a “fire sale.”
Jorgensen said stopping the Keystone XL pipeline would not halt oil from Canada. If not through the pipeline, it would still flow via trains, trucks and ships to the Gulf of Mexico.
In Glasgow, Gianforte listened to a room full of Montana residents who all shared disappointment in the president’s denial of the permit. They met at Cottonwood Inn & Suites, the management of which invested over $1 million in 2016 and added 24 rooms in anticipation of the traffic that the Keystone XL pipeline would create. Electric co-ops in Phillips and Valley counties that would provide the power needed to pump the oil have also had their investments into power poles, propane tanks and other materials potentially squandered.
Lisa Koski, the executive director of the Glasgow Chamber of Commerce, said the funds brought in by the project, from both the temporary workers and the tax revenue, would bolster the town of 3,400 people still recovering from the effects of the outbreak of COVID-19. TC Energy has made its own investments into the project by paving the rural county roads needed for construction crews, Koski said, along with nearly $30,000 for the Chamber of Commerce during the past year.
“And that’s just for the chamber. That doesn’t include the fire department, the wrestling club, the city of Glasgow for COVID relief. They’ve really injected a lot of dollars into the community … They’ve been huge sponsors for us for the last two years,” she said.
Gianforte said the Biden administration has not responded to any of his messages to permit the pipeline’s construction. He would not comment on what other options remained, should the president commit to his decision.
“We need to use every tool in the box. That’s how important this is to Montana,” he said.