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Sean Hackbarth Jim Doolittle at the Doolittle/Wagner Ranch.Jim Doolittle at the Doolittle/Wagner Ranch.
Buffalo, SD

Miles traveled: 560

9:00 am (Sep. 16)

I’m standing in a pasture. The grass around me is greener than it usually is because Buffalo has already gotten three-times the amount of rain they usually get.

Earlier, we stopped at the #3 Saloon to meet Jim Doolittle and his wife Karen Wagner, owners of the Doolittle/Wagner Ranch.

Their 13,000-acre ranch is considered to be “average size” by South Dakota standards, according to Jim. I’m used to Wisconsin dairy farms that have only a few hundred acres and 60 dairy cows. Karen tells me the ranch has been in their family for about 100 years.

We met Jim and Karen, because the Keystone XL pipeline will run for three miles across their ranch on its way to Nebraska. These landowners understand that energy infrastructure can coexist with responsible land management.

After getting some background about the ranch, we hopped into trucks, drove a few miles out of town, and passed through an open gate into the pasture I’m standing in.

To my left is a fenced in area. It looks like a pen for cattle but instead of animals, it will hold pipe and construction material for the pipeline. Beyond the pen is a grass-covered ridge going down to a river below. Some cattle are grazing there.

Panorama of the Doolittle/Wagner Ranch near Buffalo, South Dakota.Panorama of the Doolittle/Wagner Ranch near Buffalo, South Dakota.The Doolittle/Wagner Ranch near Buffalo, South Dakota.


Jim tells us that the Keystone XL pipeline will be a “big significant increase from a tax standpoint.” It’s expected that Buffalo and Harding County will get $3.9 million in property tax revenue in the first full year of the Keystone XL’s operation, a 145% increase. But because of the delay, the local community is missing out on using the tax revenue for a new athletic facilities and other school improvements.

It will also have a “big permanent impact as well,” Jim adds. To power the pump houses that will push the oil along, new electricity facilities will have to be built. Jim explains that permanent jobs will be created to maintain those facilities.

Wooden marker where the Keystone XL pipeline will travel through the Doolittle/Wagner Ranch.

Wooden marker where the Keystone XL pipeline will travel through the Doolittle/Wagner Ranch.


To the pipeline’s critics, Jim noted, “Pipelines aren’t a new concept.” Americans have lived for decades with thousands of miles of pipelines below their feet.

Then Jim walks us a few hundred feet away from the future pipe lot to a small wooden marker, about two-feet tall. Its cracked surface was once painted bright pink. Now, it’s weathered brown and grey. [See the top photo.] A few years ago, TransCanada drove that marker into the ground showing where the center of the pipeline will pass.

I look to the north to the U.S.-Canada border where I was on Monday. The Keystone XL pipeline will travel past a small windmill on a hill in the distance, go under the river, up a bank, across the pasture, then under a road on it’s way south. I stand in front of that wooden stick and realize, the pipeline will pass below my feet. 

For Jim and Karen, the lost opportunities from the Keystone XL pipeline’s delay are the missing local tax revenue, permanent jobs that would be created, and reduced energy security.

Follow the Keystone XL Lost Opportunities Tour with the #KXLtour hashtag, on Twitter (@energy21), on Facebook, and at the Energy Institute’s website.

Sean Hackbarth Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota. Gascoyne, ND

7:00 am (Sep. 16)

Miles traveled: 520

Instead of going straight into South Dakota, this morning we took a detour into North Dakota. We wanted to see what 220 miles of pipe looked like in one place.

In a field near Gascoyne, ND sits a field of steel pipe. It’s about one-quarter of all the pipe needed to build the northern leg of the Keystone XL pipeline.

Once the pipeline is approved, this pipe will be divided among 26 pipe yards, about 30 miles apart along the pipeline’s route.

I wrote about this place a year ago, and now I saw it. It was both impressive and disappointing.

Impressive, because it's miles and miles of pipe stacked on top of each other.

Disappointing becasue these stacks of North American steel have been sitting in this spot for 3.5 years.

Talk about a lost opportunity.

These photos don't do justice to how much pipe is here. It goes on for acres.

Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.

 

Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.

Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.

Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.Steel pipe for the Keystone XL pipeline piled near Gascoyne, North Dakota.

Follow the Keystone XL Lost Opportunities Tour with the #KXLtour hashtag, on Twitter (@energy21), on Facebook, and at the Energy Institute’s website.

Sean Hackbarth Glendive, Montana Post OfficeGlendive, Montana Post Office. Photographer: Sean Hackbarth.
Glendive

Miles Traveled: 327

3:00 p.m. (Sep. 15)

Like Glasgow, Glendive is a Montana town where the Burlington Northern Santa Fe railroad runs directly through the center of town. It also happens to love dinosaurs. Dinosaurs large and small pop up all over downtown.

Dinosaur sign in Glendive, MontanaDinosaur sign in Glendive, Montana


Glasgow and the surrounding Dawson County are waiting for a significant bump in their local tax revenue from the Keystone XL pipeline.

The county will see $5.1 million in property taxes in the first full year of the pipeline’s operation according to State Department estimates, but it could be even more. Dawson County Commissioner Jim Skillestad told Mediatrackers, “The lowest figure I’ve seen is from $9 million per year up to $16 million per year in direct payments to Dawson County for 25 years.” He went on to say that with the money, the county could repair county roads, help pay for a new sewage treatment plant, and reduce taxpayers’ taxes.

But none of that will happen if the Obama administration continues to delay approval of the Keystone XL pipeline.

Local businesses are also losing out on opportunities because of the pipeline's delay. However, Hedahls Auto Plus has bucked the trend and is an example of how a local business has thrived because of energy development. The company has been able to expand its number of stores in the oil-rich Bakken region of Montana and North Dakota. One store of their older stores is in Glendive. Other local businesses would have a chance to prosper if the Keystone XL pipeline is approved and thousands of new jobs are created in Montana.

Hedahls Auto Plus in Glendive, MontanaHedahls Auto Plus in Glendive, Montana

While the lost economic opportunities from the pipeline stare us dead in the face, we can’t forget the lost energy security benefits because of the pipeline’s delay. Hedahls Auto Plus CEO Dick Hedahls didn’t. He said in a statement:

The Keystone XL pipeline will be a nice boost for the economy in our region with new jobs and additional business for local businesses. But the big benefit will give the USA a North American source of energy. Americans need to get our energy from people who don’t hate us.

Local improvements, economic growth, and improved energy security have all been put on hold with the delay of the pipeline.

Next stop: Baker, MT.

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Baker

Miles Traveled: 431

7:00 p.m. (Sep. 15)

As we drove on I-94 leaving Glendive, jagged rock formations bid us goodbye. About an hour later as the sun was making its way to the horizon, oil pumps greeted us. We arrived in the Bakken.

Sean Hackbarth standing in front of oil pumps near Baker, Montana.Sean Hackbarth standing in front of oil pumps near Baker, Montana.Sean Hackbarth standing in front of oil pumps near Baker, Montana.


The Bakken shale formation run under eastern Montana and western North Dakota and has been one of America’s energy success stories. Bakken oil has helped reduce American petroleum imports to its lowest level in 28 years.

At Baker, the Keystone XL pipeline becomes a North American energy story. Because at the planned Marketlink in Baker, the Keystone XL pipeline will pick up Bakken crude for transport south.

Infrastructure has already been built so pipeline construction can get underway once it’s approved. TransCanada built a water tower and spent $800,000 for water and sewer lines for camps for construction workers near Baker. Those infrastructure improvements could be used for future residential development long after the Keystone XL pipeline has been finished.

However for Baker, the Keystone XL pipeline is much more than new construction jobs in the area.

Mona Madler, executive director of the Southeast Montana Area Revitalization Team (SMART) told me that the “Marketlink will be a huge asset.” Not only will it increase the tax base, but it will turn Baker into a regional energy hub that could include a refinery, a power plant fueled by natural gas, and by building plants to capture carbon dioxide for enhanced oil recovery.

Baker residents have lived and thrived with oil for decades. I asked Madler what she’d say to Keystone XL pipeline opponents. “They don’t know the whole story,” she answered. Canadian oilsands have been imported into the United States for decades. Some of it might have become the gasoline in opponents’ gas tanks.

Madler mentioned another lost opportunity because of the Keystone XL pipeline delays. Because the pipeline isn’t available, 100,000 barrels of Bakken oil that would go into the pipeline has to be moved by rail. This has decreased capacity has meant that farmers can’t use rail to move their grain to market. As a result, farmers are “dumping grain on the ground,” Madler said. Food is rotting in the fields because the Keystone XL pipeline continues to be delayed.

Baker may be doing well economically because of Bakken oil. However, it’s still losing opportunities for more economic growth and development because of the delay of the Keystone XL pipeline.

In one day we traveled from the U.S.-Canada boarder and are about to leave Montana. That’s a lot of driving.

Next stop: South Dakota.

Follow the Keystone XL Lost Opportunities Tour with the #KXLtour hashtag, on Twitter (@energy21), on Facebook, and at the Energy Institute’s website.

Sean Hackbarth Keystone XL Lost Opportunities Tour Truck Morgan, MT

Miles traveled: 0

8:00 a.m.

I’m only a few yards from the U.S.-Canadian border. The sky is blue, the air is crisp, and it’s cold.  The temperature reads 32 degrees. A few minutes after getting out of the truck my hands have started getting stiff holding my camera.

It’s quiet and peaceful. Only two cars passed us: one was a U.S. Border Patrol officer opening the U.S.-Canada border. The other was someone following soon after driving into Canada.

U.S. -Canada border crossing at Morgan, MontanaU.S. -Canada border crossing at Morgan, Montana

It’s here where we begin the Keystone XL Lost Opportunities tour that will finish in Steele City, NE.

Montana is called Big Sky Country for good reason. Everywhere you look you can see for tens of miles with pale blue sky on the horizon. This is the type of place where people come to get away from it all, to escape the pace of modern life. More often your closest neighbors are cattle wandering the fields.

You wouldn’t think that a place this quiet is the site of anything controversial, but for nearly six years, controversy has raged because of what will be built nearby.

Near here, the Keystone XL pipeline will pass. Because the pipeline will cross the U.S.-Canada border, the project needs a permit from the State Department. We’ve been waiting almost six years.

Once built, the Keystone XL pipeline will transport 730,000 barrel a day of Canadian oil into the United States. Further down the line it will take on 100,000 additional barrels daily of Bakken oil from Montana and North Dakota. All this oil will go to refineries on the Gulf Coast.

According to the State Department’s economic analysis, the Keystone XL pipeline will create 11,600 direct and indirect jobs for Montana, South Dakota, and Nebraska, add $648 million to their state economies, and $391 million in earnings.

Because of federal permitting delays, local shops, restaurants, hotels, and other businesses along the route are missing out on the economic benefits from those jobs and earnings. In addition, local communities are losing opportunities to invest new tax revenue.

But for now, I’m absorbing the contrast between the tranquility of Big Sky Country [tks] and the debate over Keystone XL pipeline in Washington.

Next stop, Glasgow, MT.

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Glasgow, MT


Miles Traveled: 177.

12:30 p.m.

Glasgow is a town of about 500 centered on a busy Burlington Northern Santa Fe line. Residents tell me about long trains snarling up lunchtime traffic.

Valley County, where Glasgow is located, is expected to get $7.35 million in property tax revenue during the first full year of Keystone XL’s operation. That will be a 50% increase.

Until the Keystone XL, pipeline projects weren’t very controversial and communities could reasonably plan on them being built. Glasgow made plans for investing the new property tax revenue from the pipeline, but they didn’t expect the project to be delayed for nearly six-year.

Glasgow, Montana town signGlasgow, Montana town sign

Betty Stone, owner of the Cottonwood Hotel and head of the Two Rivers Economic Group, explained at a lunch at Sam’s Supper Club (I recommend the turkey melt) that residents voted to approve bonds for a new elementary school and athletic field improvements. Those bonds would be paid with tax revenue from the Keystone XL pipeline. Now, with the Obama administration putting the pipeline in limbo, local residents have to find other ways to pay for the bonding.

Beyond the school improvements, Glasgow has other plans for the property tax revenue that will come from the pipeline:

A new community swimming pool Improved roads after three years of heavy snow and rain Improvements to the library New computers for CAD (computer-aided drafting) education at the high school

All these plans are on hold. These are Glasgow’s lost opportunities from the Obama administration’s delay.

What’s more, local businesses have grown frustrated with the delay. Lisa Olk, head of the Glasgow Chamber of Commerce and Agriculture said Glasgow businesses were now hesitant to invest. Many are no longer sure if it will ever be approved. If it happens they’ll welcome it, but it’s no longer in their long-term investment plans.

Bonnie Davidson of the Glasgow Courier said that local residents were scratching their head as to what the controversy is with the pipeline. She told me she hopes that if the Obama administration denies the permit someone should come to Glasgow and tell them why.

Life goes on in Glasgow as the Keystone XL pipeline’s delay continues.

Next stop: Glendive, MT.

Follow the Keystone XL Lost Opportunities Tour with the #KXLtour hashtag, on Twitter (@energy21), on Facebook, and at the Energy Institute’s website.

Sheryll Poe  Jimmy Jeong/Bloomberg.A mining truck carries oil sands in Fort McMurray, Alberta, Canada. Photographer: Jimmy Jeong/Bloomberg.

 

The shale energy boom in the United States is creating jobs and economic growth, and shows no signs of stopping, according to a story in today’s Wall Street Journal (subscription publication).

Skeptics of the U.S. energy boom say it can't last much longer because it requires drilling an ever-increasing number of wells.

But the boom already has lasted longer than anyone would have imagined just a decade ago and has more room to run. That's because oil and natural-gas wells have become more productive—an unrecognized but potent trend that should keep the fuels flowing.

Thanks in part to new technology and innovation, production just keeps increasing:

The U.S. oil-and-gas industry no longer spends its time trying to find new shale formations to tap. Instead, it focuses on finding ways to get more out of the formations it has found. And it is succeeding.

As a result, the U.S. has become the world's largest energy producer, natural-gas prices have remained low and U.S. oil output has helped prevent rising crude prices around the world.

The number of rigs drilling in the U.S. is basically flat, but production is rising. The federal Energy Information Administration calls this "drilling productivity" and says it is showing no sign of slowing…

Innovation makes the difference. The federal government recently predicted that oil production would rise through 2019 and then flatten off. But a second scenario in the report assumed that extraction technology would continue to improve, leading crude output to rise through 2040, if not longer.

This is a story my colleague Sean Hackbarth knows all too well. And hopefully, he has time to read it. You see, Sean is joining the U.S. Chamber’s Institute for 21st Century Energy on its Keystone XL Pipeline Lost Opportunity Tour this week. The tour started today at the starting point of the pipeline route in the United States—the U.S. – Canada border crossing in Morgan, Montana. Sean and officials from the Energy Institute will make four stops in Montana today, including visits with economic development leaders and a small business eagerly awaiting construction of the pipeline.  

You can follow the tour here, or on Twitter (hashtag #KXLtour) and on Facebook (www.facebook.com/energyinstitute). Sean will also be posting here on uschamber.com/blog while he’s on the road, so keep an eye out for those posts. (UPDATE: Here's his first video post

In the meantime, check out Sean's previous posts on Keystone XL and the energy boom here, here and here

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