One year ago, former Montana Gov. Brian Schweitzer told the Washington Post how he wrangled TransCanada into building an on-ramp onto its proposed Keystone XL pipeline.
The on-ramp, owned by TransCanada subsidiary MarketLink LLC, of Houston, Texas, would inject American oil from the Bakken oil fields in North Dakota and Montana into the pipeline at Baker, Montana.
The way Schweitzer, a cowboy, tells the story, he simply had to treat the multinational company like a problem horse that wouldn't let his constituents ride.
He told the paper, "I’m a rancher. And when you got a horse, a 4- or 5-year-old coming along pretty good, and you come to a point where it locks up, and it weighs 1,200 or 1,300 pounds, and I weigh only 210. Then you just saddle it up, put a bridle on, tie a front leg to a saddle horn, and they’re standing there on three legs. Then you walk up and give them a push, and they just about fall down. When that happens, they listen.’ ”
And just like that, problem solved. Schweitzer "broke" TransCanada and in 2011 it secured contracts to ship 65,000 barrels of oil per day from North Dakota and Montana to refineries in Texas once the pipeline starts shipping fuel, granted, of course, if it gets approved and built. The on-ramp has a planned 100,000 barrel per-day capacity.
However, TransCanada had plans to ship American oil in the northern Keystone line from the get go and a presentation by the North Dakota Pipeline Authority in 2010 outlines several projects in the Bakken, suggesting producers and TransCanada had long courted each other.
The Bakken MarketLink is one of those projects. The pipeline runs 132 miles through four counties in North Dakota to a rail loading point in Fryburg. Although it doesn't connect at Baker due to the Keystone's delay, it could if the pipeline is built.
TransCanada Spokesman Shawn Howard said Schweitzer was certainly an advocate for the Baker on-ramp but making sure it had enough customers to satisfy investors played a big role as well.
Howard said injecting American oil into the Keystone XL had always been part of its strategy and once Baker was selected, the route could be nailed down.
With well drilling growth in the Bakken "like crazy," TransCanada "has the confidence to invest."
Letting Schweitzer play the hero and making it appear as if the company had to be strong armed into taking American oil may have helped boost initial support in the early yearrs.
Getting producers to support the Keystone was easy, they just need affordable transportation to get their oil to market. By mixing American oil with Canadian bitumen, now citizens feel invested in the pipeline. It's "their" pipeline too and Schweitzer, their hero.
Sadly, no one cares about global warming or that the oil will be sold on the global market, so forget about the promises that the Keystone is supposed to help America get off foreign oil.
A defeat of the Keystone XL doesn't mean that a Baker facility is DOA, either.
Local officials are optimistic TransCanada could explore a stand-alone facility gathering multiple oil lines for distribution although Spokesman Shawn Howard said the company's plans currently revolve around getting its Presidential Permit approved and the pipeline constructed.
Fallon County Commissioner Bill Brandash believes TransCanada officials when they say they're in it for the long haul. He said, "TransCanada will go through the regulatory process after the pipeline is approved and if it isn't we're hopeful they'll build an on-ramp anyway. There's a lot of oil up here. Have to move it somehow, even if it's not the Keystone."
Bring up economic reports ( here and here.) showing how fast shale well production plays out and the concern over the coming industry "bust" and Brandash quips, "The Bakken isn't going to peter out."
Except, according to those very reports, the Bakken could very well peter out. Investors in the Utica Shale figured this out, pulling out of a pipeline project as ROI estimates were disappointing.
Perhaps, Bakken Marketlink investors had the same insight when they decided not to build all the way to Baker.
On-ramps for American oil, built on American soil, may have helped rally support for the Keystone XL but that was one horse Schweitzer didn't need to ride, let alone tie up and push over. Besides, I thought TransCanada was the bully.
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