Power Surge 

How a government spying scandal and Alberta’s energy boom hit home in Montana

These days, energy doesn’t just heat our homes and run our cars. In Iraq, it’s an impetus for war. In California, it spurs environmental reforms from a governor who cruises around in a hydrogen-fueled Hummer. Closer to home, in the Northern Rockies, it brings a booming industry to our doorsteps, carrying promises in one hand and threats tucked in the other.

Montanans may pay close attention to their power bills and prices at the gas pump, but many have missed a major development that’s rapidly shaping the future of our region and nation alike: the Alberta-Montana energy connection. And recently, the story of this connection has taken on epic proportions, complete with a plot that could propel a novel, including secret government agents and indignant citizens under surveillance. There’s a siren known as the oil sands luring thousands of eager companies and workers to northern Alberta, where profits gush and environmental catastrophes deepen daily. And there’s a fight with sweeping consequences over a proposed power transmission line that would be the first to connect the energy grids of Alberta and Montana, paving the way for other privately owned transmission networks that would snake their way from Canada, and through the northern Rockies, to tap into the bigger markets of Las Vegas and California beyond.

Plenty of energy development plans are cooking in Montana, where Gov. Brian Schweitzer is urging expansion at all levels. “I want to continue to develop energy projects. I want transmission lines, I want pipelines, I want coal gasification, I want wind power, I want solar power,” he told the Spokane Spokesman Review in September.

But in Alberta, which is years ahead of Montana in the energy arena, the energy industry and debate surrounding it have already boiled over. New coal-fired power plants, oil sands developments, natural gas extraction projects and nuclear facilities are all in the works, stimulated by Canada’s power-hungry neighbor to the south. The United States is eagerly consuming every bit of energy it can get from Canada, and Alberta is proving just as eager to meet our demands.

Canada is already the single largest foreign supplier of energy to the United States, a role that’s bound to expand given the fact that Canada also ranks second worldwide—right behind Saudi Arabia—in proven crude oil reserves, holding 15 percent of the world’s total oil supply. And Montana’s a major factor too, what with the 120 billion tons of coal reserves (nearly 30 percent of the nation’s supply) found here, along with a large but untapped capacity for wind power. The story of the Montana-Alberta energy connection is almost mind-boggling in its proportions and complexities, and one that’s shifting and expanding daily. Much like a Choose-Your-Own-Adventure novel, choices made on these energy issues today will give rise to drastically different futures for the Northern Rockies and the people who live there tomorrow.


If it weren’t for the spies hired by the Canadian government who illegally monitored meetings and phone conversations between Montanans and Albertans opposed to proposed power transmission lines north of here, you might be tempted to put this story down.

But sure enough, members of the Alberta Energy Utility Board (EUB), a powerful regulator of energy development, did hire four private investigators who eavesdropped on conversations of landowners and their lawyers as they discussed their opposition to proposed transmission lines in the region, duly reporting back with their observations and participants’ personal information.

The project in question is a 500-kilovolt power line proposed by Altalink, Canada’s largest electricity transmission company, which would stretch between Calgary and Edmonton. Proponents say transmission capacity is needed to supply Calgary’s power in coming years, but critics believe the line—which would be built with taxpayer money but owned entirely by Altalink—would be used primarily to export power from Alberta to the United States. Opponents have teamed up with other landowners who are speaking out against another transmission line—proposed by Montana Alberta Tie Limited (MATL)—that would span from Lethbridge, Alberta, to Great Falls, providing the first international link between the two grids and a possible tie-in to the Altalink line.

The connection between MATL’s proposed line and the Altalink development, along with strategies against both projects, were the topics under discussion when an EUB investigator posing as a concerned landowner joined a conference call between Albertans and Montanans. Two Montanans were on the phone line along with several Canadians, and later discovered their conversations were monitored.

One of them, Katrina Martin, who lives on a farm near Dutton and MATL’s proposed route, says she couldn’t believe the Canadians had spied on them until friends produced documents obtained under Canada’s Freedom of Information and Protection of Privacy Act (FOIP) that proved it. Then she was outraged.

“The fact that a quasi-judicial agency would hire agents to do intelligence gathering on citizens engaged in an open, public process is scary and appalling,” Martin says. “Obviously that board has decided who the enemy is, and that the people who have audacity to question these issues should be infiltrated and spied upon.”

JR Roof, a Missoula resident who’s helping Albertans organize and connect with Montanans concerned about regional energy development, was also on the line. He says the EUB’s actions make it clear that it’s not the fair, neutral regulator it should be.

“This incident shows a heavy bias toward private industry within the government of Alberta, and shows a complete disregard for citizens’ rights and democracy,” he says.

Landowners say they suspected for weeks that someone was spying on them during numerous hearings in spring 2007, but couldn’t figure out who it was.

Joe Anglin, president of the 800-member Lavesta Area Group that’s lobbied against Altalink’s proposal, says they thought it was Altalink infiltrators at first, a charge the company denied. The EUB denied hiring undercover agents too, but Anglin says landowners knew something was afoot, especially during spring planting season when most of the male group members were out working their fields.

“We knew they were infiltrating our group from the beginning because we knew everyone in our group…in the middle of a bunch of grandmothers sat some 300-pound ex-RCMP (Royal Canadian Mounted Police) looking guy eating all the cookies!” Anglin says.

It wasn’t until Anglin and others obtained FOIP documents reflecting the private investigators’ contract with EUB and their reports to agency officials that EUB acknowledged its actions. Even then, and to this day, the EUB insists it took those steps to help ensure security at tense meetings, one of which included an incident where an elderly woman swung—and missed—at an EUB commissioner. Two separate investigations by the Canadian government concluded the EUB’s actions were illegal and “repulsive,” and in September, the scandal resulted in the appointment of a new EUB chairman, William Tilleman, and the disbanding of the agency’s security unit. But outrage has persisted—farmers say EUB commissioners themselves should be held accountable—and on Sept. 30 Chairman Tilleman announced it was voiding all the proceedings on the 500-kilovolt power line. The review process that began in 2004 will start fresh once Altalink reapplies to construct the project.

“This EUB decision is the equivalent of granting a mistrial,” Tilleman said in a statement. “Albertans must be confident that this Board acts fairly, responsibly and in the public interest. Mistakes have been made on this file, and I believe the only way to re-establish public confidence is to go back to square one on this process.”

But even this step hasn’t soothed concerns of EUB’s bias toward industry, and fallout from the spy scandal may yet reach beyond the Altalink line. The lawyer representing Citizens for Responsible Power Transmission, a group of landowners opposing the MATL line, questions whether his clients can trust they’ll be fairly heard at the MATL hearings scheduled to begin in Lethbridge on Oct. 16. Scott Stenbeck argues that the same problems acknowledged when the EUB threw out the Altalink hearings apply to the MATL hearings. After all, they involve the same spies, the same landowners, and the same EUB commissioners. Stenbeck asked the EUB to address these concerns, warning the spy scandal has severely tainted the MATL process and the EUB’s credibility.

“This type of conduct was only discovered because some of my clients in the hearings caught the investigators red-handed,” Stenbeck says. “The question remains how pervasive this is and how long it has gone on. It has an effect of fear and intimidation upon my clients.”

Margaret Lewis, whose home and llama ranch outside Lethbridge, Alberta, sits within 100 feet of MATL’s proposed power line, had her personal information transmitted back to the EUB after its undercover investigators sat in on a call with Lewis, other landowners and their lawyer. The revelation about the EUB’s activities “deeply offended” her and has given her a dim outlook on the upcoming MATL hearings.

“It will be very difficult for us going into this hearing to forget what happened and to believe we’re having a fair hearing,” Lewis says.


The EUB spy scandal clearly illustrates the high stakes of energy development and the low blows it can incite, but that’s only half of the story. Power transmission is an urgent issue only because of its connection to energy generation, whose expansion is seen by leaders in both Alberta and Montana as a shining opportunity for economic development.

To quantify exactly what it means that Canada is the United State’s largest foreign supplier of energy, consider the amount of energy Yankees imported from Canucks in 2006: 2.3 million barrels per day of oil and petroleum products (11 percent of U.S. supply); 3.6 trillion cubic feet of natural gas (16 percent of U.S. supply); and 41.2 billion kilowatt-hours of electricity (1 percent of U.S. supply).

The vast majority of Canada’s energy resources sit straight north of Montana, in Alberta, including 80 percent of Canada’s natural gas and the bulk of the country’s crude supply, sunk deep in the tar sands—also called oil sands—of northern Alberta. Only the recent, soaring price of oil has rendered the oil sands recoverable. Long considered too difficult and costly to access and process due to the fact that these 175 billion barrels lie deep beneath thriving boreal forests in the form of a thick sludge, the tar sands have become the world’s greatest “new” source of oil. But they’re also one of the dirtiest.

Spread beneath a forested area the size of Florida, the tar sands contain a thick substance called bitumen, a mix of oil, sand, water and clay. To get at this heavy oil, the boreal forests of northern Alberta are being swiftly cut and razed. Then the digging machines come in, scooping up two tons of tar sands for every barrel of oil that will ultimately be produced. The process requires two to three barrels of clean water for each barrel of bitumen produced, which then must be further refined. And since most of the oil sands lie deep beneath the ground and must be extracted by pumping steam into the earth, the process also consumes large quantities of natural gas. Each day, enough natural gas to heat three million homes—600 million cubic feet—is burned to extract the oil from the sands. Tailing ponds hold the waste, creating poisonous pools at the borders of mined moonscapes.

According to the Pembina Institute in Alberta, oil sands production more than doubled to 1.1 million barrels per day in the decade spanning 1995-2004. The Alberta government anticipates oil sands production will grow to three million barrels per day by 2020 and five million barrels per day by 2030.

Depending on whom you ask, Alberta’s oil sands development is either “a triumph of technological innovation,” according to government brochures, or “the biggest environmental disaster in the world,” in the minds of environmental activists like JR Roof.

Roof, a Missoula resident who is co-founder of the Ruckus Society—an environmental and human rights group dedicated to training activists—as well as a former senior director for Greenpeace, sees the oil sands development as a major battleground in the fight against global warming.

“Not only are they going after fossil fuels, but they’re going after the dirtiest of the dirty,” says Roof. “The [fossil fuels] industry is trying to get all it can out of the ground as soon as possible because it knows its days are numbered.”

Although the issue has global implications, the Northern Rockies region—especially Montana, Alberta and Wyoming—stands to be most effected. As such, it’s the people of that region who are getting the most involved. Over the past year, Roof and others, including Missoulian Mike Roselle, an Earth First! founder, have been working with a network of Albertans and Montanans opposed to new transmission and generation projects they say will sacrifice our environment and quality of life so private companies can exploit our resources for millions in profits. Deregulation of the energy industry in both Alberta and Montana has made the effort much more difficult, says Roof, and debacles like the Altalink spy scandal illustrate the issue.

Last June, Roof, Roselle and a host of other environmental organizers held a weeklong training camp near Edmonton to educate Alberta citizens wanting to become involved in energy development issues.

The event was held on a ranch owned by Brian Staszenski, who lives two miles east of ground that’s home to a dozen coal-fired power plants and the site of some six more proposed plants. People have long looked at transmission lines and power plants as separate concerns, he says, but are increasingly noting the connection between the two. And it’s not just environmentalists working on these issues, but mainly rural landowners and farmers who fear potential health effects as well as impacts on their day-to-day farming operations.

Roof says another action camp is being planned for next year, this time on the Montana side of the border in an effort to bring together Montanans and Albertans concerned about energy development in both jurisdictions.

“What we’re asking for is not radical—just that the public have significant input into public energy issues,” he says. “Deregulation, which has cut the consideration of public good out of these decisions is what’s radical. What’s more radical?—us opposing this madness of fossil fuel development, or the fact they want to destroy our landscape?”


While development of Alberta’s oil sands centers in the northern part of the province, far from Montana, the issue trickles down to Montana in two significant ways: a series of bitumen refineries that Gov. Schweitzer has proposed to take advantage of oil sands development, and a proposed transmission line that would hook together the energy grids of Montana and Alberta.

In 2006, Schweitzer floated the idea of creating seven new refineries along Montana’s Hi-line to process the increased flow of Canadian crude coming out of the tar sands. Numbers set forth in an economic development presentation say seven new refineries could process 500,000 barrels a day in Montana, providing 275 jobs at each facility. Already, oil production in the state is breaking records—it’s more than doubled since 2000—but Schweitzer’s proposal would significantly increase Montana’s output.

Evan Barrett, Schweitzer’s economic development director, says while the proposal “hasn’t moved forward” since it was suggested last year, numerous communities along Montana’s Hi-line recognize the idea as an opportunity to increase quality jobs and provide a “huge economic boost to areas of the state that need it.” Asked about environmental impacts of mining the oil sands, he says, “From a global warming perspective, what’s coming out of the oil sands is going to be turned into petroleum products somewhere, so why not here?”

Schweitzer’s bitumen refinery proposal may still be as amorphous as sludge scooped out of the oil sands, but another proposal that would connect the energy grids of Alberta and Montana has far more substance.

The sprawling cropland between Great Falls and Lethbridge, Alberta— dotted with farmers’ outposts and scattered ranch buildings—will also host a 218-mile power line capable of moving 300 megawatts (MW) of power between Lethbridge and Great Falls, if plans from Canadian-owned Montana Alberta Tie Limited (MATL) continue moving forward. MATL’s line would make the first direct connection between the Montana and Alberta energy grids, and would also become Montana’s first merchant transmission network, privately owned and not subject to the regulations of the Montana Public Service Commission (PSC).

“It’s a pretty unique beast in the energy world…it’s not brand new, but it’s part of the deregulation philosophy that swept through the country in the mid-90s,” says Ken Toole, PSC commissioner.

Bob Williams, regulatory vice president for MATL, says the new transmission line would spur development of wind farms in both Montana and Alberta. Although it has yet to gain approval from the Montana Department of Environmental Quality, officials in the governor’s office regularly cite their support.

“We have been very supportive of the MATL project because it triggers so much opportunity in the wind power arena,” says Barrett.

Opportunity is a good word to describe Montana’s prospects for developing wind power, but what may come of that opportunity is far from assured. In a state that already produces more energy than it needs and doesn’t possess a power transmission network integrated into other, bigger markets, uncertainty about how and where to sell wind power presents a major stumbling block. Alberta, whose energy resources far outstrip its demand, suffers from a similar conundrum.

MATL consistently claims its project will boost wind development in the state by giving wind farmers a place to sell their power. Capacity on the proposed line, which could carry 300 MW northbound and 300 MW southbound, has been awarded to three wind development companies: NaturEner, a global wind energy developer, reserved rights to all of the northbound capacity, and two other firms—Invenergy Montana and Wind Hunter LLC—were awarded the southbound capacity. None of these companies have existing wind projects that would generate electricity to ship on MATL’s line, but they are working to develop facilities for the future. NaturEner’s spokeswoman declined to answer questions for this story, but representatives for the other two companies say they look forward to MATL’s development. However, they don’t plan to use its capacity immediately.

Stephen Wiley, Wind Hunter’s senior vice president, and Mark Jacobson, Invenergy’s director of development, say their companies have wind farms in the works for Montana, and they hope to plug that power into a bigger stretch of line than MATL’s project would provide. That would require their farms or MATL to connect to other transmission networks that may be constructed. Jacobson recognizes some Montanans are hesitant to support these transmission projects out of concern that power produced here will simply be shipped out of state, but he disagrees with their reasoning. He says wind farms become far more economical when they are large developments that take advantage of economies of scale. To do so, developers must look at markets outside the state.

“We certainly want to sell as much of that power in the state as we can, but eventually if Montana is serious about trying to capture the full economic development opportunity of renewable energy in their back yard, they shouldn’t look at selling power out of state in a negative way. It’s really no different than selling wheat or oil outside of the state,” Jacobson says.

Landowners opposed to MATL say the question of exporting locally produced wind power is one thing, but many are unconvinced that MATL will even be used to ship wind power, given the fact the wind farms don’t currently exist and that, when and if they do come online, the power produced will be intermittent. Albertans like Lewis, the Lethbridge llama rancher, and Montanans such as Dutton’s Martin, both say it’s far more likely coal-fired power will travel on MATL’s line, despite company claims and the fact it obtained a “clean and green” tax break. According to MATL, if companies with reservations on the power line don’t utilize their space, it would be leased on a short-term basis to other companies. Six short-term shippers have already signed contracts to move electricity on the MATL line, including Morgan Stanley Capital Group Inc., Cargill Power Markets and UBS Commodities Canada, all of which are massive global energy companies that trade in coal and natural gas. So if the wind farms signed on to utilize MATL don’t materialize, the “clean and green” MATL line could quickly become dirty.

Regardless of what power may ultimately pulse through its lines, the MATL project is midway through its approval process, having already won permits from the Federal Energy Regulatory Commission, Canada’s National Energy Board and the Western Electricity Coordinating Council. The three remaining approvals required are those from Montana’s Department of Environmental Quality, which has already released a draft environmental impact statement, the federal Department of Energy and the Alberta EUB.

Critics of MATL—primarily affected landowners stretching from Lethbridge to Great Falls—point to two distinct concerns with the proposal: the effects of the line on farmers’ operations and the line’s contribution to development and export of energy from Alberta and Montana.

At the broadest level, resentment stems from MATL’s purely private ownership, motivated by profit, not public good. Many farmers say they’d be more willing to lose some of their land to a long-distance power line if it carried power to nearby communities. They say they’d also be more disposed to accommodate the line if its developers worked to minimize its impact. But what farmers like Martin see instead is a route that cuts a diagonal line right through farmers’ land because it’s the shortest—most cost-effective—path. Once the $120 million line is constructed, maintenance costs should remain low, while annual revenues, according to MATL, would reach $28.4 million by mid-2009 and increase by 2.5 percent annually thereafter.

“This company should not be able to make gobs of profit on the backs of Montana farmers,” says Martin.

Williams responds that MATL has made a number of concessions in both the route and the kind of power poles used to minimize impact on farmers, and is continuing to address landowners’ concerns.

Lethbridge’s Lewis says it’s people like her who would be forced to deal with the daily impacts of the international power line, including feared health hazards from the line’s electromagnetic fields, disruption of GPS tools used in farming, and the inability to use modern farming equipment in fields obstructed by power poles.

And considering the extensive plans for energy development that leaders such as Schweitzer and counterparts in Alberta have laid out, landowners say it’s important to remember that MATL would likely be the first of many transmission lines to cart energy from Alberta and Montana into other, more lucrative markets.

Take for example NorthernLights, a massive undertaking recently launched by energy giant TransCanada that seeks to build three major high-voltage direct current transmission lines to carry power from Alberta, Montana and Wyoming to Nevada, California and Arizona. In October 2006, Schweitzer and TransCanada’s vice president announced its $2 billion Montana project, which would originate in Townsend and extend through Idaho to Las Vegas and on down to Phoenix and Los Angeles. A second transmission line in Alberta would start in the oil sands boom town of Fort McMurray and run down the West Coast to Los Angeles. The Wyoming component of the plan would trace another path to the major cities of the Southwest.

Compared to NorthernLights, MATL’s project is puny, but still significant because it would represent the first link between the Alberta-Montana grids and holds great potential for future expansion. Martin and other landowners have heard the glowing talk of economic development from Schweitzer, MATL and others promoting energy development, but she can’t help but see how this kind of development will carry momentous consequences for Montanans’ quality of life.

“You’re talking about affecting real people on the ground forever,” Martin says. “We can’t just allow this part of the country to be filled up with power poles just so Las Vegas can keep the lights on.”


There’s enormous potential tied up in the energy resources of Alberta and Montana, bundled tightly together with proportional risk. Expansion of facilities for power generation and transmission promises economic development in struggling parts of the state, along with valuable energy sources close to home. On the other hand, the rapid development of these resources—especially in a hostile atmosphere like that created by the EUB—will have irreversible impacts on the environment and quality of life in both Montana and Alberta. It will be Montanans, not the Californians, left to choke down the dregs of energy development once our power is shipped off and the building boom is over. The Rocky Mountain region—with Montana sandwiched between energy Goliaths like Alberta and Wyoming—is well on its way to assuming a crucial role in this nation’s energy future. There’s no escaping our part; but the plot, and the ending, have yet to be written.
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