"We want it in our backyard" was the message local officials stated clearly to the 17 representatives of Canadian firms that toured the oil field Tuesday with Montana Gov. Brian Schweitzer.

Both Sidney's Mayor Bret Smelser and Richland County Commissioner Don Steppler said they welcome investment in energy infrastructure such as a possible refinery or pipeline in the county.

"We're open for business. We would love to work with you," Smelser said, addressing the Canadian businessmen.

Bill Vander Weele | Sidney Herald Gov. Brian Schweitzer, right, visits with Ward Polzin, country manager for Enerplus Resources. Enerplus owns approximately 70 percent working interest in a producing Bakken oil field in Richland County.

With Canada's proven oil reserves second only to Saudi Arabia and its status as current top exporter of oil to the United States, Canadian firms are looking south for expansion of infrastructure. Long range prospects in western provinces are that Canada will succeed the Saudis as the world's top reserve of oil.

Schweitzer said, the production has to go somewhere and it might as well be Montana.

Many Canadian firms, several of which were represented on the tour, are well intrenched in Richland County's prolific oil field.

Schweitzer addressed the question of the Richland County Bakken Play's supply sustainability and dispelled the myth that environmental permits in Montana were more stringent than other states.

One of the key elements impacting high production rates to the north is the implementation of CO2 in Canadian oil fields. Canadian representatives involved in Richland County's oil field agreed implementing CO2 could double the production from the Bakken in the long run.

Some of the CO2 being shipped to the Canadian field is generated at the Dakota Gasification Plant, Beulah, N.D., the largest gasification plant in the United States.

"Fourteen miles west of Circle would be an ideal location for a coal to liquid plant," Schweitzer said.

He pointed out that location has the coal, it's close to Richland County's oil field, is near Fort Peck Lake and is reasonably close in proximity to the major rail line. Increasing the expected production from the county's field plus the oil Canada will be producing in the short and long term could create a sustainable environment for a refinery in Richland County.

One oil executives from Canada said, "We heard from USGS there were 400 million barrels of oil in the Bakken. If you could guarantee half of that from 40 years of production they would be pouring the concrete for a refinery here right now. You have to demonstrate long-term sustainability."

The wide misconception that permits for refineries and pipelines would take too long in Montana was dispelled when Schweitzer explained a fast-track through the Legislature could be created for such facilities. Currently the Department of Environmental Quality is experiencing backup due to funding cuts, thus explaining the long amounts of time associated with permits.

Also the $30 a barrel hit the regional producers were experiencing near the end of the first quarter was explained, clearing up the incorrect rumor which had circulated through the area after Schweitzer's investigation into the matter brought representatives from regional state governments, Canadian pipeline firms and refineries to the table.

"We were trying to find the guy who was getting away with the $30, but we never could find a person," Schweitzer said.

Canadian representatives explained the hit experienced is natural in the history of pipelines due to factors impacting supply and demand. The hit was attributed to bottlenecked pipelines and refineries.

They said the rumor that Richland County's sweet crude was being mixed with the Canadian's heavy oil to increase its value was not correct.

Currently, there are expansions under way for all major pipelines in the region, and refineries that were offline for various reasons are now back online which has reduced the price hit area producers were experiencing.

ellenr@sidneyherald.com