Transportation Restrictions Slow Montana Oil Sales

Aug 29, 2019

An association of oil and gas industry members from Montana met in Billings this week to talk about issues the industry is facing, like transporting crude oil.

During a break between talks, Montana Petroleum Association executive Director Alan Olson says policies in other states are affecting the price of crude oil.

“Oil in Montana is running a little bit less than West Texas price, but that’s primarily due to transportation issues, but we’re still seeing probably an average of $48 to $50 dollars a barrel,” says Olson.

He says Washington state’s restriction on crude oil trains from Northern Plains states has something to do with that.

In May, Washington Democratic Gov. Jay Inslee signed a bill intended to decrease the likelihood of oil spills due to derailment.

The legislation prevents facilities from unloading crude oil with vapor pressure more than nine pounds per square inch and affects the transport of Bakken oil, which is especially volatile.

Montana Attorney General Tim Fox and North Dakota Attorney General Wayne Stenehjem are asking the federal government to stop the legislation. They see it as a state exception that is unnecessarily limiting to the oil and gas industry.

Olson says the Montana Petroleum Association supports the attorneys general and says moving crude oil brings money into Montana.

“If we don’t have the ability to move the oil, we don’t get a price. If we don’t get a price, we don’t pay taxes. It’s just as simple as that,” he says.

During a 10 minute speech at lunch, Republican U.S. Senator Steve Daines voiced his intention to advocate for the oil industry.

“And lastly the reason this is important and the reason it's important that we have common sense leaders back in Washington D.C. is, as you know, it’s one thing to be able to produce oil and natural gas, it’s another thing to be able to transport it. And so the battles we’re facing right now are some of these crazy east coast and west coast governors,” says Daines.

Like Attorney General Tim Fox, Daines talked about bringing the protest against the Washington state legislation to federal courts.