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Governor Says Ruling Will Benefit Oil Industry

Louisa Barber
Sidney Herald
August 29, 2010

A Public Service Commission ruling will benefit Richland County oil producers as it guarantees they’ll have a better chance to get their products onto the upcoming TransCanada Corp. Keystone XL pipeline, Gov. Brian Schweitzer said Wednesday.

The Montana PSC ruled earlier this month that it could mediate connection disputes. That is to say if oil companies don’t believe they have a fair shot at hooking into the pipeline, they could appeal to the PSC.

“Oil producers told me they want to get on that pipeline,” Schweitzer said, because it’s cheaper to ship by pipeline than by rail or trucking. “I told them, I’m going to see to them that they get the chance to put their oil on the pipeline.” Schweitzer, who’s been outspoken in his support for the KeyStone pipeline, told the Herald he had organized meetings between officials from TransCanada Corp., oil producers, himself and North Dakota Gov. John Hoeven in Billings to work out an agreement that would allow Montana and its eastern neighbor to ship oil on the pipeline. Interest was heavily generated by oil producers, Schweitzer said, convincing TransCanada officials to consider letting oil producers from both states to get on the 1,980-mile pipeline. “We have to allow for onramp,” he said.

Meanwhile, the company has said it has no problems with PSC’s ruling and looks forward to moving Montana and North Dakota oil markets.

Schweitzer told the Herald allowing Montana oil producers to hook into the Keystone XL pipeline keeps Montana oil competitive and continues production momentum for the state, which, besides North Dakota, is the only state in the country increasing oil production.

The governor said there could be a possible contract between Montana oil companies and TransCanada to get the oil shipped on the line. If there are any problems, regulatory authority will ensure Montana oil does ship and “all the oil gets on the pipeline.”

“I’m just not taking any chances,” he said. “We will trust, but we will verify” by regulatory authority.