DOS issues final EIS for proposed Keystone XL pipeline

The US Department of State issued a final environmental impact statement of the proposed Keystone XL crude oil pipeline. The finding that the project would have limited environmental impacts drew cheers from oil and gas and other business groups, and boos from environmental organizations.

DOS still needs to determine whether the proposed project—which would consist of an 861.5-mile segment from Morgan, Mont., to Steele City, Neb., and a 483.8-mile segment from Cushing, Okla., to refineries in Houston, and Port Arthur, Tex.—is in the national interest.

This review will be a broader evaluation beyond environmental impacts which will consider economic, energy security, foreign policy, and other relevant issues, DOS said in an Aug. 26 statement. It said that it expects to consult with at least eight other federal agencies, and will hold public meetings in the six states the new pipeline would cross and in Washington as well as accept comments online.

“We are on track…to make a determination by the end of the year,” the statement added. “Above all else, the department is committed to maintaining the integrity of a transparent, impartial, and rigorous process.”

The final EIS noted in its executive summary that TransCanada, the project’s sponsor, applied to the US Pipeline and Hazardous Materials Safety Administration in 2009 for a permit to operate the pipeline at a slightly higher than normally allowed pressure, then withdrew the application in August 2010.

PHMSA had begun working with DOS to develop special conditions specific to the project, and the two groups ultimately established 57 of these conditions, however. Keystone has agreed to design, construct, operate, maintain, and monitor the proposed system in accordance with these more stringent conditions in addition to existing PHMSA regulatory requirements, the final EIS said.

Degree of safety

“In consultation with PHMSA, DOS determined that incorporation of the special conditions would result in a project that would have a degree of safety greater than any typically constructed domestic oil pipeline system under current regulations, and a degree of safety along the entire length…that would be similar to that required in high consequence areas as defined in the regulations,” it continued.

Nine of the special conditions establish standards and requirements for manufacturing pipe and materials, pipe inspections at the mill and in the field, performance tests, and quality control procedures. Another 14 address the two proposed pipeline segments’ design and construction, including testing of components, according to the final EIS.

It said that conditions 24 through 49 present requirements for a supervisor control and data acquisition (SCADA) system which would be used to remotely monitor and control the pipeline. This system also would satisfy requirements for internal corrosion inspection, cathodic protection, identification of the pipeline’s location with above-ground markers, internal pipeline inspections using smart pigs, visual monitoring of the pipeline corridor, and repair procedures.

The nine remaining conditions establish requirements for maintaining detailed records, establishing a right-of-way management plan, reporting to PHMSA, and providing the US Department of Transportation agency with certification from a senior Keystone executive that the operator has complied with the special conditions, the final EIS said.

It said that while a leak detection system would be in place, spills remain possible. Using PHMSA and National Response Center crude oil and hazardous liquids spill data, the final EIS said that DOS calculated that there could be 1.18-1.38 spills greater than 2,100 gal/year (50 bbl) for the entire project. “The estimated frequency of spills of any size ranged from 1.78 to 2.51 spills/year,” it added.

Potential aquifer impacts

DOS assessed the proposed project’s potential impacts on the Ogallala and other aquifers, and found that no sole-source aquifers or aquifers serving as principal area drinking waters sources would be crossed by the new pipeline segments, it said. “Diluted bitumen and synthetic crude oil, the two types of crude that would be transported by the proposed project, would initially float on water if spilled,” the final EIS said. “Over time, the lighter aromatic fractions of the crude would evaporate, and water-soluble components could enter the groundwater.”

It said that studies of oil spills from underground storage tanks indicate that potential surface and groundwater impacts typically are limited to several hundred feet or less from a spill site. It said that while conditions in a 1979 spill from a pipeline in Minnesota were not fully analogous, extensive studies of its impacts suggest that consequences from a similar-size spill in the Northern High Plains Aquifer’s Sand Hills Region would involve a limited area around the spill site.

“In no spill incident scenario would the entire High Plains Aquifer system be adversely affected,” the final EIS said. It suggested that Keystone commission an independent review of its risk assessment involving other aquifers along the route, including shallow or near-surface aquifers, and determine whether additional measures are needed.

It also found that refiners which are likely to receive crude from the proposed pipeline are already configured to process it, and probably would continue to handle heavy crude whether or not Keystone XL is built. Construction of the system is not expected to affect oil sands production in Canada, it added.

The American Petroleum Institute welcomed the final EIS’s release and urged DOS to complete its national interest determination and issue permits for the pipeline without delay. “The nation’s quintessential shovel-ready project is a step closer to reality,” API Refining Manager Cindy Schild said on Aug. 26. “That’s good news for tens of thousands of Americans who stand to find new jobs when this pipeline project is finally approved.”

‘A huge win’

“This is a huge win for American consumers,” said Michael Whatley, executive vice-president of the Consumer Energy Alliance. “The pipeline will not only help lower fuel prices but it will create 20,000 much needed high-wage jobs in America’s heartland, generate more than $20 billion in economic growth, and significantly reduce our dependence on oil from unstable regimes.”

National Petrochemical & Refiners Association Pres. Charles T. Drevna also noted that DOS released the final EIS after a long and thoughtful review. He urged it to take the next step “and allow this critically important pipeline to be built, providing needed jobs, tax revenue, and reliable energy for the American people.”

“The question before us is not whether Canada will develop its oil sands resources. We know that they will,” said Matt Koch, vice-president of the US Chamber of Commerce’s Institute for 21st Century Energy. “The question is whether the US imports more oil from Canada, a reliable ally, or from other nations overseas who may not share our values.” He called on industries and businesses to be actively engaged as DOS prepares its national interest assessment.

Environmental organizations were dismayed. “The US State Department’s final report on the Keystone XL today is an insult to anyone who expects government to work for the interests of the American people,” Sierra Club Executive Director Michael Brune said. “Americans don't want a 2,000 mile-long toxic crude oil pipeline running through our heartland for the benefit of a foreign oil corporation and they don’t want another oil spill.”

Celebrities had joined civil disobedience protests outside the White House for several days preceding the EIS’s release, and were expected to press US President Barack Obama to reject any favorable recommendation for the project.

Contact Nick Snow at nicks@pennwell.com.

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