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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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Sean Hackbarth Power line over gravel.

EPA’s proposed carbon regulations would mean the most radical restructuring of America’s power grid ever. A major effect of the regulations will be to dramatically restrict the usage of affordable, reliable coal, which is now the most significant part of the power grid’s fuel mix. (And soon enough, natural gas, also a carbon-producing fossil fuel, will be targeted.)

Coal fuels 40% of America’s electricity production. Removing a major energy source like that is like removing a major organ in a person’s body. No doctor, if she can help it, would rush into surgery without making sure that the procedure is needed and what the side effects could be.

In the same vein, we need second, third, and fourth opinions that evaluate the efficacy and consequences of the Clean Power Plan. Plenty of review and analysis needs to be done before taking such drastic actions (which by the way will have a miniscule impact on global carbon levels). Planning to reconstruct the power grid—which won’t be as reliable--to compensate for the loss of coal is an enormous project. While the reliability and affordability of electricity have been the cornerstones of the industry since the time of Thomas Edison, the EPA now proposes to re-make the grid without an emphasis on either.

EPA claims that it wants to work with states and that its public outreach has been “unprecedented.” However, its track record is more puffery than anything.

Prior to the Clean Power Plan being released, EPA Administrator Gina McCarthy promised that the rulemaking process would be “an absolute collaboration between the federal and state government…a partnership if there ever was one.” At the event hosted by the Bipartisan Policy Center, she also stated, “My goal is not to supplant what the states are doing, but to support it." "The only thing I really hope when this proposal goes out is that people look at it and say 'EPA listened,'” McCarthy added.

While those were good intentions, EPA hasn’t yet lived up to them.  

On collaborating with states, yesterday, my colleague Dan Byers shared a letter from 15 governors who stated that the Clean Power Plan isn’t practical and that EPA has moved ahead “without considering or understanding—among other crucial matters—our state energy markets and infrastructure needs.” In his post are additional links to letters from state officials “pleading with EPA to extend its rushed and arbitrary deadline for public comment, so sufficient time is provided to review and assess the agency’s complex and far-reaching rule.”

As for EPA’s “unprecedented” outreach, it included a series of public hearings, none of which were held in the ten states most reliant on coal for electricity.

But an EPA official was so proud that she patted her agency on the back, calling the hearings a “great success.”

There’s talk, and then there’s action. EPA says it wants to listen. Well, here is its chance. EPA can live up to its stated intentions and extend the comment period by 60 days.

Right now, the public has until October 16 to submit their comments on EPA’s plan. That’s not enough time for stakeholders to analyze these exceptionally complicated carbon regulations and give EPA a thoughtful response.

In a letter to EPA, 53 Senators asked for an extension to the comment period:

While we appreciate EPA granting an initial 120 day comment period, the complexity and magnitude of the proposed rule necessitates an extension. This extension is critical to ensure that state regulatory agencies and other stakeholders have adequate time to fully analyze and comment on the proposal. It is also important to note that the challenge is not only one of commenting on the complexity and sweeping scope of the rule, but also providing an opportunity to digest more than 600 supporting documents released by EPA in support of this proposal.

 The proposed rule regulates or affects the generation, transmission, and use of electricity in every corner of this country.  States and stakeholders must have time to fully analyze and assess the sweeping impacts that the proposal will have on our nation’s energy system, including dispatch of generation and end-use energy efficiency. In light of the broad energy impacts of the proposed rule, state environmental agencies must coordinate their comments across multiple state agencies and stakeholders, including public utility commissions, regional transmission organizations, and transmission and reliability experts, just to name a few.   The proposed rule requires a thorough evaluation of intra- and inter-state, regional, and in some cases international energy generation and transmission so that states and utilities can provide the most detailed assessments on how to meet the targets while maintaining reliability in the grid.   This level of coordination to comment on an EPA rule is unprecedented, extraordinary, and extremely time consuming.

With the Senate in gridlock, so many Senators in agreement is significant.

To sum it all up, much more time and study is needed on EPA’s proposed carbon regulations. Given the scale of what the agency is proposing, 120 days is not enough time to sufficiently analyze a complex, Rube Goldberg plan to transform how America produces electricity. 

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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Sean Hackbarth Keystone XL Lost Opportunities Tour

Six years ago next week, the first federal permit application for the Keystone XL pipeline was submitted. What should have been a calm, mundane discussion about a piece of energy infrastructure has fueled controversy and one embarrassing delay after another.

After reading an NBC News story earlier this year on rural towns in Montana anxiously waiting for pipeline construction to start, I wanted to see for myself what the pipeline will mean to people along the route.

It’s one thing to list the benefits of what pipeline will mean economically:

42,100 new jobs. $2 billion in earnings. $3.4 billion added to U.S. GDP.

It’s another to put flesh and bone on those numbers and find out for myself what opportunities have been lost by the pipeline’s delay, and how local communities have been affected.

So in the words of Horace Greeley it’s time to “Go west!”

Next week, some friends at the U.S. Chamber’s Institute for 21st Energy and I will go on the “Lost Opportunity Tour.” We will travel the 875 mile route of the proposed Keystone XL pipeline from the Montana/Canada border to Steele City, Nebraska. While passing through Montana, South Dakota, and Nebraska, we’ll talk to small business owners, farmers, ranchers, and local officials. They will tell us how the delay of the Keystone XL pipeline has been a lost opportunity for their communities.

“For six long years, the Obama administration has failed to make a decision on the Keystone XL pipeline,” said Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy. “Our tour will demonstrate that there are consequences for this inaction. Not only has America been forced to buy millions of barrels of oil from unfriendly sources, but Americans along the pipeline route and across the nation have been denied thousands of jobs, millions in revenue, and countless opportunities.”

What are some of those lost opportunities?

What kind of road and other local improvements could have been done already had counties been receiving additional property tax revenue from the pipeline? How busy would restaurants, hotels, and stores along the route be from serving the thousands of construction workers building the pipeline? How much income and added financial security would farmers and ranchers have by allowing the safest, most advanced pipeline in North America to run under their property?

We’ll answer these questions and let the people who will be most affected by the Keystone XL pipeline explain why it should be built.

Matt Koch, an Energy Institute vice president, who will be traveling with me said:

While for some, the Keystone XL pipeline has been a symbolic policy fight, it is important to remember that there are real people who have been waiting for six years for the opportunities that will come with the pipeline.  Our Tour will introduce those voices to the nation and help build even more support for the Keystone XL pipeline, which the vast majority of Americans want to see built.

This Tour will help you (and the Administration) better understand how the pipeline will improve these communities and why it’s in America’s national interest for it to be approved.

Join me—virtually on the Tour. Follow on social media with the #KXLtour hashtag, on Twitter (@energy21), on the Energy Institute’s Facebook page, and on the Energy Institute’s website next week. And check back to this blog where you’ll find my daily posts from the road. You can also follow me on Twitter (@seanhackbarth) and Instagram where I’ll be posting additional thoughts and observations.

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