Montanans give swift response to Biden plan canceling Keystone XL

Word that President-elect Joe Biden might cancel the Keystone XL pipeline permit this week evoked quick a response from Montanans who have fought for years over the Canadian tar sands project.

Biden’s cancellation of the permit first appeared on a transaction briefing note for Wednesday, Inauguration Day, initially reported by CBC News. The possibility set off a whirl of responses, including in Montana where Native Americans and environmentalists have resisted the pipeline since it was first proposed 14 years ago.

“It is a surprise because Native Americans are always forgotten about, but Biden did sign our promise to protect,” said Angeline Cheek, a Hunkpapa Lakota and Oglala Sioux, who with other members of the Fort Peck Assiniboine Sioux Reservation have watchdogged Keystone’s construction. “I’m glad that we get to be at ease for four years.”

The Keystone XL pipeline route skirts the western edge of the Fort Peck Reservation, but that hasn’t put the pipeline beyond the reach of concerned Assiniboine and Sioux tribal members, who have treaty rights extending beyond the 110-mile long, 40-mile-wide reservation established in 1888. The pipeline skirts the reservation but intersects with the reservation’s drinking water source.

Montana has the longest pipeline segment of any state along Keystone XL’s 1,200-mile route from Alberta to Gulf Coast refineries. The pipeline is intended to transport up to 830,000 barrels of crude daily.

U.S. Sen. Steve Daines, on news of the Biden transaction briefing, released a portion of a letter he’d already penned with other rural-state lawmakers who expected Biden to cancel the Keystone permit.

“Mr. President-elect, during the campaign you challenged America to ‘Build Back Better’ by investing in new infrastructure and energy technologies, creating high-paying blue-collar jobs, and preparing for the energy mix of the future,’” the letter reads. “With these and other commitments, Keystone XL meets that important test. We have to come together to find a way forward, to keep people working, while also creating a new standard for American energy infrastructure.”

Montana politicians, Republican and Democrat, have never opposed Keystone’s construction. Democratic governors Brian Schweitzer and Steve Bullock supported the project as economically significant for Montana.

At one point, the Montana Department of Revenue estimated Keystone would generate $80.3 million in property taxes, with most going to school districts and the six counties along the Montana stretch. The Montana Land Board, comprised of Democrats in 2012, sold 50-year easements to the project for $741,000.

Democratic U.S. Sen. Jon Tester voted with Republicans and a few Democrats in 2014 attempting to secure approval for the project.

Democrats have always backstopped their Keystone support on the pipeline being built to the highest safety standards and with respect for private property rights.

“Senator Tester is encouraging the incoming Administration to meet with supporters and opponents of this project before making a decision on the permit,” said Roy Loewenstein, a Tester spokesman. “He continues to support the responsible development of the pipeline as long as it is constructed with American steel, built to the highest safety standards, respects private property rights and includes significant consultation with impacted Tribes.”

The Northern Plains Resource Council, which is currently challenging the pipeline’s construction in court, issued the following statement from Dena Hoff, a member who lives in Glendive–not far from where Keystone would cross the Yellowstone River: “We applaud reports that President-elect Biden will keep his promise to stop Keystone XL, putting the health of our climate above corporate balance sheets,” said Hoff. “Alongside farmers, ranchers, indigenous communities, and countless others, we have stood strong for over a decade. We have worked to protect not just our air, land, water, and climate, but also the democratic processes, tribal rights, and property rights that have been trampled throughout this fight.”

Since Keystone was first proposed in 2008, oil pipeline ruptures have twice contaminated Montana’s Yellowstone River. The 2011 Silvertip pipeline rupture upstream from Billings spilled an estimated 63,000 gallons of oil into the river, killing wildlife and fouling river banks for 70 miles. No significant amount of oil was recovered. The environmental disaster cost ExxonMobil Pipeline Co. more than $135 million.

In 2019, Exxon agreed on a settlement to pay $1.05 million in penalties for the spill.

In January 2015, the Bridger Pipeline ruptured beneath the Yellowstone upstream from Glendive, dumping an estimated 50,400 gallons of Bakken crude into the river. Very little of the oil was recovered. Glendive’s drinking water was temporarily unsafe because of chemicals from the spill.

Those pipeline breaks turned Montana’s attention to the more than three dozen river crossings where pipelines are a concern. Many of the pipelines were re-bored 35 feet beneath the river after the Bridger pipeline disaster. Bridger was a subsidiary of Wyoming-based True Oil.

Keystone owner TC Energy didn’t return calls Monday. In a morning announcement, the company said its pipeline would be electrified with renewable energy and that the pipeline would be built with union labor.

The economics of oil have changed dramatically since Keystone XL was rolled out. In 2010, average closing prices for oil were more than $90 a barrel for four straight years. But an overproduction glut socked the market in October 2014, sending the West Texas Intermediate Price down to the $40 range. WTI oil futures have crept into the low $50 range, but have cracked $60 a barrel only once in the last six years.

That $60 per barrel price is important for Canadian crude. In July, researcher Rystad Energy estimated that only 42% of Canada’s oil could be produced at a benchmark price of $60 set by Brent Crude. At $40 a barrel only 16% could be produced economically, according to a report cited in The Economist.

In March, while oil prices were in a freefall sparked by an OPEC-Russia price war, it was the Alberta government, not private investors, who invested $1.5 billion in Keystone, while agreeing to guarantee $6 billion in pipeline loans. The pipeline was too important to Alberta’s economy to fail, said Premier Jason Kenney when announcing the government investment.

Kenney said in an announcement Sunday that if Biden rejected Keystone, Alberta would take all steps necessary to revive the pipeline.

“We renew our call on the incoming administration to show respect for Canada as the United States’ most important trading partner and strategic ally by keeping that commitment to engage, and to allow Canada to make the case for strengthening cooperation on energy, the environment, and the economy through this project,” Kenney said. “Should the incoming U.S. Administration abrogate the Keystone XL permit, Alberta will work with TC Energy to use all legal avenues available to protect its interest in the project.”

Encouraged that Biden’s first environmental statement would be a rejection of Keystone XL, Cheek and other American Indians, are expecting to be heard on other issues, as well. The Keystone fight at root was about treaty rights and also protecting sacred ground. There is a water compact between the federal government, the state and the tribes granting the Assiniboine and Sioux 1 million acre feet of diversions annually. The Keystone endangers the quality of that water, tribal members say.

“These are sacred sites. Can you imagine if I went to Arlington National Cemetery and dug up all the graves? As an Indigenous person, I would be shot and killed,” Cheek said. “But when it comes to a foreign company, which we seem to be so welcoming of, they can come here and plow right over sacred sites.”

The hope is that Native American concerns will receive fair hearing, Cheek said. Biden has nominated U.S. Rep. Deb Haaland, a Pueblo Indian from New Mexico, to be Interior secretary.

Bill Whitehead, chairman of the Assiniboine & Sioux Rural Water Supply System, said one of the things that made Biden’s cancelling of Keystone possible was the lack of attention President Donald Trump paid the project in the final months of the Trump presidency. The president was preoccupied with his election loss, Whitehead said, which gave Biden an opportunity.