New Great Falls projects may pull workers from the Bakken

According to a recent AP article, new projects are coming into the Great Falls area, intending to provide service to the oil sands of southern Canada.

The Great Falls area has the benefit of being close to the Canadian border -- as we were reminded a few years ago when a Calgary couple had to come to a Montana town of fewer than 60,000 inhabitants in order to have their quadruplets delivered -- another triumph of the Canadian health service over the inferior American one. Additionally, Great Falls is large enough to provide a labor force, unlike other towns on Montana's northern tier.

That's potential good news to Montana residents who have relocated to the Bakken oil extraction projects in North Dakota.

They're now inquiring about possibilities to work closer to home, said Sarah Converse, director of Sweetgrass Development, an economic organization for north-central Montana...

Commuting to the Bakken for work from places like Great Falls and Billings is no cup of tea for workers. The development of service industries closer to home will be a boon -- but of course such service jobs are dependent on continued growth in the oil fields themselves.

Re-routing the Keystone XL pipeline -- implications for Montana and the Bakken

The last we heard, the Canadians were going to deal with the Obama administration's refusal to approve the Keystone XL pipeline by building one west to the Pacific instead, allowing for easier delivery to hungry Chinese and east Asian markets -- a move that would have left Montana and the Bakken fields out in the cold.

It seems that Transcanada is going to try again, by proposing a new route through Nebraska. The Obama administration had used Nebraska's failure to sign off on their portion of the route as the ostensible reason for nixing the project entirely.

As a U.S. News article points out, however, it really wouldn't matter what magical route could be found through Nebraska:

The regulation redundancies only scratch the surface of many environmentalists' concerns over the pipeline. Their beef with the project is further upstream and involves the extraction and processing of the oil sands themselves, an issue no amount of creative pipeline re-routing can address.

Exactly. While the Nebraska route and environmentally sensitive areas may be the immediate reasons given for torpedoing the project, the real problem is that the oil pipeline would carry.... well... oil.

Even if the Canadian oil sands produced oil without a process that emits greenhouse gases, environmentalists would still oppose it, because oil pipelines carry... well... oil.

I've heard some Obama partisans criticize the Obama administration for not laying all of the blame for the Keystone XL pipeline debacle squarely at the feet of the state of Nebraska, which would allow President Obama to escape responsibility.

Such arguments miss a fundamental feature of the landscape: the President is a true believer in shutting down traditional energy development. Were he to use the Nebraska problem to full rhetorical advantage, he would be boxed into approving the pipeline should a Nebraska route eventually be approved. Should he be re-elected (an eventuality that MH predicted long ago) he will use whatever reason is convenient to torch the project.

Transcanada obviously is hoping for the best, but one suspects that their best plan will be to start planning their pipeline route through the Canadian Rockies. Montana and the Bakken will just have to keep hauling much of our oil by the more environmentally destructive means of truck and train...

Billings company moves into the Canadian oil sands market

It has been three years since Ed Kemmick wrote his fantastic series of pieces for the Billings Gazette on the explosion of activity in the Alberta oil sands.

At the time, he noted that there was a downturn in what had been an expected jump in activity in Billings to service that particular oil boom. Now, however, signs point to a resurgence of business here.

In a recent Gazette article, Tom Howard reports that "a Texas company involved in a high-stakes plan to provide equipment used in developing the Canadian oil sands is counting on its Billings manufacturing plant to get the work done on time and under budget." The project's international dimension adds to its exotic panache, going beyond the obvious benefits of its 200 Billings employees (with a predicted 50 more to follow shortly.)

Indicative of the kinds of long-term vision and risk involved in such a venture, in 2008 Bay Ltd. purchased a former Holland loader manufacturing facility in Billings, converting it to make large and complex "modules" that are used in extracting oil from the Canadian sands. We realize that they "didn't build that," but for the moment, lets humor the company by pretending that it did have something to do with it.

But Bay Ltd.’s Billings venture doesn’t come without risk. The company is awaiting approval from the Montana Department of Transportation to transport the big loads along Montana highways to the Canadian border. The modules are 24 feet wide, up to 25 feet tall, up to 120 feet long and weigh up to 156 metric tons.

Luhan said Bay Ltd. is working with 10 power companies to arrange moving power lines to accommodate the large loads as they head north. More than 470 power lines have to be moved. Once the loads cross the international border, it will be easy transport because the Canadian government has developed a “high and wide” corridor to accommodate large loads, Bay Ltd. officials said.

And there are further flies in the ointment: the shop is non-unionized, which has local unions upset rather than happy for the blokes who have found good jobs in this economy. We suppose we can expect the unions to use their political clout to try to make approval for the above logistical issues more difficult. But such hardball would probably run the risk of backfiring in the court of public opinion, which likes it when jobs are created.

Perhaps the most important quotation in the piece was this, however:

Rick Leuthold, director of business development for Sanderson Stewart, a Billings-based engineering company, said the manufacturing processes used by Bay Ltd. could translate into new industries that serve communities involved in energy development.

This is the operative concept -- successful businesses attract and inspire more of the same. Photos in the article show Montana GOP legislators touring the facility -- one hopes that they come away with ideas for how Montana can create a healthy business climate that encourages more manufacturing concerns like this one.