The debate over the Keystone XL pipeline, which would carry crude oil from Alberta's tar sands to oil refineries on the Gulf Coast, weighs the importance of "conflict-free" oil, as Montana Gov. Brian Schweitzer termed it in a recent memo to the U.S. State Department, against the implications of tapping the second largest pool of carbon on earth, which, according to NASA climate scientist Jim Hansen, would spell "game over" for the climate.
Supporters of TransCanada's proposed 1,700-mile pipeline, which would cut across 284 miles of eastern Montana, also tout Keystone XL's potential economic benefits. But that, too, is the subject of debate.
In Montana, the Governor's Office of Economic Development estimates that the Keystone XL pipeline would create about 800 construction jobs for two years and a "smaller number" of permanent jobs. It believes the pipeline would bring about $60 million a year in property taxes. And it says the pipeline's "on-ramp" near Baker, where Montana oil producers would pipe in, could boost the well-head price of oil as much as 10 percent, resulting in roughly $200 million more in annual earnings for Montana oil producers.
Those rosy projections wilt under the microscopes of some economists. Pete Morton, director of economic research at the Wilderness Society, for one, questions how much Montanans will actually benefit from Keystone XL. He says pipeline workers will likely come from out of state, and the relatively few and mostly temporary jobs that do go to Montanans won't be enough to kick-start the state economy.
"More importantly," Morton says, "those jobs will come at a great public cost: carving up Montana's landscape, increasing truck traffic, furthering our addiction to oil, contributing to the economic costs associated with global climate change and increasing the chances for air and water pollution in Montana. There are much better ways to create jobs that aren't associated with such high public and environmental costs."
Morton also calls the projected 10 percent hike in the wellhead price of oil "dubious." Even if it does result in $200 million more in revenue for oil producers, says University of Montana economist Tom Power, that money likely wouldn't benefit Montanans either. "It depends on who actually owns the mineral rights," Power says. "In many places, most of those profits flow to out-of-state companies, with at best some royalty remaining behind."
Schweitzer maintains that the pipeline is in the national interest, representing a solution "that will eventually eliminate the export of $1 billion each day to petro-dictators."