Approvals For TransCanada Tar Sand Pipeline Gets Sticky; Plus PMHSA Low-Stress Tug-Of-War And FERC Posting Edict

October 2010 Vol. 65 No. 10

Despite criticism of his company's proposed, nearly 2000-mile pipeline, Robert Jones, vice president, Keystone Pipelines, TransCanada Corporation, says he is very confident that the U.S. State Department will approve construction of the Keystone XL pipeline which would take tar sand from Hardisty, Alberta, through six U.S. states, picking up conventional oil along the way, and depositing the tar and oil at Gulf Coast refineries. The Environmental Protection Agency (EPA) and Rep. Henry Waxman (D-CA), influential chairman of the House Energy and Commerce Committee, have raised questions about the proposed pipeline.

In response in part to those concerns and others by landowners, TransCanada withdrew in August an application it had submitted to Pipeline Hazardous Materials and Safety Administration (PHMSA) asking to be able to operate XL at a higher operating pressure. The decision to pull that application came after a number of House and Senate members raised questions about TransCanada's plans to use thinner steel in the pipeline if the application to operate at 80 percent of maximum pressure instead of 72 percent was granted by PHMSA. Jones explains TransCanada pulled the application because the company was not doing a good enough job communicating that the permit would have resulted in a safer pipeline.

The withdrawal of the "special permit" application from PHMSA came a few weeks after the EPA in July said that a State Department draft environmental impact statement (EIS) was “inadequate.” Among the concerns is the potential for harm to the Ogallala Aquifer, which provides drinking water for almost 80 percent of Nebraskans. Waxman's objections related to greenhouse gas emissions. In a letter to Secretary of State Hillary Clinton, Waxman said, "Extracting tar sands bitumen and upgrading it to synthetic crude oil produces roughly three times greater greenhouse gas emissions than producing conventional oil on a per unit basis. Tar sands development also has devastating effects on boreal forests and wetlands, wildlife habitat, migratory bird species, water quality and air quality. Yet the draft EIS for the Keystone XL decision fails to consider the primary environmental concern associated with the project."