TransCanada touts benefits of proposed Keystone crude line

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 29 -- The sponsor of the proposed Keystone crude oil pipeline from Canada emphasized its safety and reliability prior to the US Department of State’s final public hearing on the project before the comment period ends on July 2. The proposed 1,661-mile, 36-in. system would extend from Hardesty, Alta., to refineries on the US Gulf Coast.

“When people are constantly bombarded with pictures of the tragedy on the Gulf Coast, it’s hard for them not to associate what’s happening there with other projects,” said Robert Jones, the TransCanada Pipelines Ltd. vice-president in charge of the project, which also ultimately would transport crude produced from North Dakota’s Bakken shales.

“Most people are concerned about a major spill that would contaminate their water sources. They don’t always understand the 100-year history of crude oil pipelines as the arteries and veins of the US energy economy,” he told reporters during a June 29 teleconference.

TransCanada scheduled the briefing after US Reps. Jay Inslee (D-Wash.), Peter Welch (D-Vt.), Dennis Kucinich (D-Ohio) and 46 other House Democrats circulated a “dear colleague” letter on June 23 urging support for their petition to US Sec. of State Hillary R. Clinton to not issue a cross-border permit until greenhouse gas emissions from oil sands production in Canada are fully studied.

“I have serious reservations about the proposed Keystone XL pipeline,” said Welch as he released the letter. “If the spill in the Gulf of Mexico has taught us anything, it is that we must perform far more rigorous oversight and scrutiny of environmentally risk energy projects. Further, it is a wakeup call for this nation to get serious about transitioning away from 19th century fossil fuels to clean and renewable energy sources.”

From other states
Jones noted that not one of the House members who signed the letter comes from a state through which the pipeline would run. “We could have held a press conference too and released the two dozen letters we’ve received from other members of Congress, several states’ governors and local officials, Alberta’s premier, and the Canadian Chamber of Commerce’s president,” he said. “Instead, we simply submitted them for the record.”

He said an independent study by the Perryman Group found that construction of the Keystone system’s Gulf Coast expansion would provide more than $20 billion for the US economy, $585 million in state and local taxes along its US route, and another $5.2 billion in property taxes during the pipeline’s operating lifetime. The study also found that the project will improve US energy security with supplies from a reliable foreign source as Mexico’s production declines and Venezuela sells more of its crude oil elsewhere, Jones said.

“Among Keystone’s greatest benefits is energy security,” he maintained. “Refineries in the Houston area and elsewhere along the Gulf Coast have supported the Keystone pipeline because US consumers have a growing need for petroleum products. When it comes to energy security, if we don’t look at Canada as a stable source, the United States will rely more heavily on other imports.”

Jones said questions have been raised about TransCanada’s plans to use thinner steel for the system, but added that automobiles and other motor vehicles have grown safer as they’ve used increasingly lighter materials. The specifications already have been approved for natural gas pipelines in the US and Canada, he said. TransCanada has applied to the US Pipeline and Hazardous Materials Safety Administration for a special permit to operate the Keystone system at 80% of its tested pressure, he indicated.

Jones also said the State Department’s draft environmental impact statement covering the proposed project said that such impacts would be minor because it would replace crude from less reliable sources. “The DEIS also said that the low probability of a large catastrophic oil spill event and the routing of the pipeline through less populated areas reduces risks significantly,” said Jones. “The pipeline can be shut down in minutes. We have a world-class control center. Pumps at any station can be started or stopped quickly. TransCanada is prepared to prevent, stop or clean up any leak.”

Relatively minor
Such leaks would be very minor, especially in comparison to the ongoing spill in the gulf from BP PLC’s Macondo well, according to Heidi Tillquist, an environmental engineer with AECOM in Fort Collins, Colo., who also participated in the teleconference. “Most pipeline leaks involve less than 3 bbl. 80% involve less than 50 bbl,” she told reporters. “Crude oil has a high affinity for soil. After the initial dispersal, it does not migrate. Constituents in crude oil may mobilize and combine with water, but their movement is limited by the soil’s properties. Chemicals are a different story.”

Most concerns over the Keystone project’s potential adverse environmental impacts have centered on possible leaks into the Ogallala Aquifer, a major groundwater source extending from West Texas to South Dakota, she indicated.

“It’s my opinion that it does not pose a significant threat, largely because the aquifer’s sands and gravels would keep contamination highly local and limited,” Tillquist said. “Further, public groundwater intakes are protected by high consequence designations which pipeline routes avoid. There are a limited amount of wells involved due to the rural nature of the route.

Jones said that demands for life-cycle environmental impact assessments ignore the extensive evaluations which already take place both upstream and downstream from the proposed pipeline. “Studies look at carbon emissions,” he said. “In Canada, to develop oil sands, permits already examine the life cycle. It would be unprecedented for the US government to look at matters the Canadian government already has the authority to address.”

He said that the State Department looked not only at issues arising directly from the proposed pipeline’s route, but also related concerns such as Mexico’s declining production and Venezuela’s growing sales to countries besides the US.

“Canada has legislation and is addressing its GHG issues, but more important, Canada will continue to develop its resources for sale to the US or other countries,” Jones said. “There are two proposed projects to build pipelines to Canada’s west coast. Whether they’re successful will depend on whether the US continues to be a major market for oil sands production.”

Contact Nick Snow at nicks@pennwell.com.

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