BUSINESS

Obama's Keystone XL Claim About Canadian Oil Is False, Farmer Says

05/03/2015 02:21 EDT | Updated 05/03/2016 05:12 EDT
BAKER, Mont. - U.S. President Barack Obama's claims about the long-delayed Keystone XL pipeline have been raising eyebrows lately in this tiny oil-industry town in eastern Montana.

The locals smell falsehood — evidence of it lies in a cow pasture just outside their town.

The scent of untruth emanates from Obama's oft-repeated claim that the pipeline would simply ship Canadian oil, a statement he's made several times while talking down the project's economic benefit for Americans.

"This is Canadian oil — this isn't U.S. oil," Obama said last November.

That came as news to Jerrid Geving.

Geving owns the land where Keystone XL would take in oil that, according to the president, doesn't exist — up to 100,000 barrels a day of American crude, from North Dakota and Montana.

Geving's family has agreed to sell seven per cent of its land to TransCanada Corp. for an on-ramp to the pipeline — where storage tanks and a pump station would send U.S. crude into Keystone. It's on a multi-generational family property, off a dirt road up a hill from the town of 1,800.

If Obama ever approves the pipeline, the cows grazing there would be pushed to the 93 per cent of the property that would remain pasture.

Since he's already got a deal to be paid up to $1,800 an acre by TransCanada Corp., plus bonuses, he's a little perplexed to hear the president say there'd be no U.S. oil involved.

"I don't believe that's true," Geving said. "He needs to look into knowing everything."

Obama's every statement on the pipeline is being carefully scrutinized in anticipation of a final decision on whether to grant a border permit for the project.

Pending that decision, hundreds of kilometres of pipe are currently piled up in a yard about an hour east of Baker, in Gascoyne, N.D. Local politicians say they'd rather see that pipe in the ground.

The annual property taxes from the pipeline would boost Fallon County's revenues by 64 per cent and increase those in some neighbouring counties by as much as 117 per cent, according to a U.S. State Department study.

That would help with roads, sewage, and airport maintenance in the county of 2,800, said county commissioner Bill Randash. The infrastructure needs are there, he added — in one part of Baker, there are septic tanks so old that wastewater occasionally floats to the surface of people's lawns.

As for the president's claims about the pipeline, he said: "That's not really true.... It's not only Canadian oil."

Obama's own State Department has extensively documented the proposed on-ramp with U.S. oil. Its study says up to 100,000 barrels a day would be American oil, in a pipeline designed to carry 830,000 barrels.

That means up to 12 per cent of the pipeline's contents would be American, and that the pipeline would transport nearly 10 per cent of the 1.2 million barrels per day currently produced in the U.S. Bakken formation.

Those may be small percentages. The pipeline would only take one or two oil trains a day off the clogged midwestern rail lines. But they could make a difference to local businesses.

It's been a quiet few months with the collapse of oil prices, several said. Out-of-town workers have stopped flooding into the community, with new infrastructure projects on hold.

The near-empty restaurants and bars last week underscored that point. In a clothing store, owner Merri Beck said she's had to put off planned renovations.

She said sales are down more than one-fifth this year — which an influx of pipeline-workers would help correct.

"There would be more people in our town — not only in my store but also other businesses, such as the grocery store, the drug store, restaurants, laundry services, gas stations," Beck said.

"I hope it goes through."

Up the road, an excavating company has reduced its 20-member staff by five, and fears more layoffs are afoot. Keystone XL would prevent that.

"It might mean not having to let people go," said Mike Griffith, who expects that his family's Griffith Excavating Inc. would be one of a dozen local companies working on the project.

"You hear our president say this isn't good enough — the number of jobs it's going to create," Griffith said.

"I think (politicians) need to come to our town."

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