Like many other essential industries in Montana, the state’s energy sector continues the daily grind amid concerns over the COVID-19 illness. YPR News’s Kayla Desroches has been reporting on oil, gas and coal production and she shares her reporting with us now.
Nicky Ouellet: Gov. Steve Bullock’s stay at home and quarantine order for people coming into the state, that’s disrupted many businesses statewide but people still need electricity and other basic services. Kayla, how are utilities and energy developers working amid the coronavirus pandemic?
Kayla Desroches: So, that’s all been approved as essential work except with some extra protocol in place. For instance, Talen Energy is the operator for the Colstrip coal fired power plant and they’ve put some protocols in place including more limited site access, social distancing and increased cleaning and disinfection.
NO: Earlier this week, TC Energy, that’s the company building the Keystone XL Pipeline, announced that they’re going to move forward with construction this month. This company is based up in Calgary, Canada. How is this going to work, considering that the border between the United States and Canada is closed to most people, there is a two week quarantine order for anyone from coming into the state and there’s also this stay at home directive from the governor’s office? How will the pipeline still get built?
KD: Under the governor’s directive, people are allowed to cross the border for essential services but Sara Rabern whose a spokesperson at TC Energy said that right now, there is no equipment passing through the border, everything is happening on the American side. She says the primary contractor is Barnard Construction which is out of Bozeman and the workers are coming from the United States.
NO: The construction site is in Phillips county and the workers are being housed in Valley County. What are county officials saying that this construction project means for them financially and for keeping everyone in the county healthy?
KD: Valley County does have a health order in place. Todd Young is Valley County’s Public Information Officer, so he says that most workers arrived around two weeks ago but when they are arriving, if they are new, they go through 14 days of self isolating.
“They have to go and, yes, self-quarantine in their room when they’re not performing their essential service duties,” Young says.
KD: Also, there’s a contingency plan from Barnard Construction that lists a few different things they're doing to make sure everyone stays safe, and that includes logging in and out of sites, reporting where people have travelled, filling out a questionnaire and also it should be added that these counties are getting property taxes from construction. Young says this is gonna be a boon for the county and that’s what Phillips county is saying too. Phillips County commissioner Richard Dunbar says the pipeline would be bringing in a significant amount of property tax.
“It’ll help the county out right now. We’re a farm and ranch community and, of course, they’re struggling and we have a natural gas field and the price of natural gas is less than $2, so the revenue there is way down. We’re struggling down here at the county level for budgets,” Dunbar says.
KD: The county and the school district are splitting about $2.5 million.
NO: How soon might oil be flowing through the Keystone XL Pipeline?
KD: TC Energy says the pipeline should be in service in 2023.
NO: So Kayla, most sectors of the economy are really hurting during this pandemic. Is that also true for oil and gas prices?
KD: Prices in the United States are suffering overall because of the ongoing price war between Saudi Arabia and Russia and that includes Bakken oil. So just for example, Williston Sweet crude oil at its highest on Mar. 3 it was $37 a barrel and on Mar. 25 it was $14 a barrel, so that’s a big difference.
NO: It might feel like most things are on hold at the moment but, Kayla, what about planning for the future? Are government agencies still moving new energy projects forward?
KD: It appears so. Some environmental groups are worried the public is distracted when it comes to land management issues and that includes Montana Environmental Information Center Deputy Director Anne Hedges.
“These ideas or these proposals aren’t getting the scrutiny they deserve and they need to make sure that they’re making good decisions about our public lands,” Hedges says.
KD: Federally mandated systems are still in place and that includes things like quarterly oil and gas lease sales and Montana spokesperson for the Bureau of Land Management Al Nash says that’s still happening.
“Our oil and gas lease sales for quite some time now have been online. Our notices to the public go out electronically,” Nash says.
KD: On the other hand, the Environmental Protection Agency recently relaxed enforcement of certain accidental environmental violations. So that’s things like routine compliance monitoring and integrity testing sampling and reporting obligations.
NO: What’s happening on the regulatory side of energy at the state level here in Montana?
KD: I immediately think of the Montana Public Service Commission. So, meetings for the PSC were cancelled in March and on their website it says they’re revisiting at the beginning of this month to see if more cancellations are needed.