Tag Archives: Keystone XL

Keystone XL Pipeline Passes Emissions Test

The proposed Keystone XL pipeline to bring heavy oil from Canada to the south of Nebraska has cleared an important hurdle, after an environmental impact statement concluded it would have only a marginal effect on greenhouse gas emissions.

The state department study argued that production in the oil sands of Alberta would increase even if the pipeline were not built because companies could make more use of rail transport to reach US refineries.

It also suggested that building Keystone XL would create more than 42,100 jobs across the US for one to two years, although once in operation it would support just 35 permanent jobs.

The conclusions make it more likely that President Barack Obama’s administration will approve the controversial project, which has become a battleground for the oil industry and environmental campaigners.

Formally, the state department has responsibility for deciding on the pipeline, because it crosses the border from Canada.

The pipeline would carry diluted bitumen from the oil sands – also known as the tar sands – which create higher levels of greenhouse gas emissions than many other forms of oil production.

Alison Redford, premier of Alberta, praised the study as “extensive, exacting and comprehensive”.

TransCanada, the company behind the project, addressed earlier concerns about leaks from the pipeline by re-routing it away from the environmentally sensitive Sand Hills area of Nebraska.

The new route is 875 miles long, and could carry up to 830,000 barrels of diluted bitumen per day to Steele City, Nebraska, where it will connect with a southern section already under construction. The aim is to connect to refineries on the Gulf of Mexico coast that are configured to use heavy oil including Canadian production.

The pipeline could also take some production from the fast-growing Bakken shale of North Dakota, the heart of the new US oil boom.

The state department study suggests that the oil sands of Alberta will be developed whether or not Keystone XL is built.

It argues: “Approval or denial of any one crude oil transport project, including the proposed project [Keystone XL], remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the US.”

Blocking Keystone XL would cut output from the oil sands by only 0.4-0.6 per cent by 2030, the study said. Even if all new pipeline capacity were restricted, oil sands production would drop just 2-4 per cent.

The study argues that other transport routes, particularly rail, would be capable of “providing the capacity needed to transport all incremental Western Canadian and Bakken crude oil production to markets if there were no additional pipeline projects approved”.

The state department will now take comments about the study, before a final decision from the administration on whether the pipeline is in the US national interest.

SOURCE: http://www.ft.com/cms/s/0/9763476c-82b3-11e2-8404-00144feabdc0.html

Shippers keen on TransCanada’s natural gas line conversion to carry crude eastward

EDMONTON – TransCanada Corp.’s plans to convert one of its main natural gas lines to carry crude oil from Alberta to Quebec and likely on to the Maritimes is set to move into high gear.

The firm said Tuesday it is considering an open season for shippers within a few months, and will schedule consultations with communities along the 4,800-kilometre route as soon as it is appropriate to do so.

And if all goes well, TransCanada will file for regulatory approval by the end of 2013, with construction to begin in 2015 and the line in operation by 2017. It could have a capacity of about one million barrels per day, sending light oil from Alberta and Saskatchewan as well as synthetic crude from oilsands upgraders to Eastern refineries that currently import expensive oil from Africa and the Middle East.

“There is a great deal of interest, we are advancing discussions with shippers and are pleased the way they are going,” said Alex Pourbaix, the firm’s president for energy and oil pipelines, during a conference call Tuesday to discuss fourth-quarter earnings.

Based on expressions of interest, TransCanada expects to have an open season for shippers within a few months, allowing firms to make formal commitments. He said when intentions are clear and a route proposed, TransCanada will immediately begin consultations with communities along the route.

The existing pipe that ends in Montreal has the necessary size for the conversion process, but east of that TransCanada expects it will install new pipe along its existing rights-of-way.

“We know there is 400,000 barrels per day of demand in the domestic market of Quebec (from refineries in Montreal and Quebec City) and a further 400,000 barrels per day in the Maritimes, largely at Irving’s refinery in Saint John,” said Pourbaix.

But while domestic demand is the initial target, there are also export possibilities to the U.S. eastern seaboard.

“(The U.S.) is importing 1.5 million barrels a day and that suggests a market for domestic production to attach to that market,” said chief executive Russ Girling.

The idea of cutting through Maine to shorten the route to the Maritimes is a non-starter for TransCanada, with Pourbaix stressing that the new streamlined National Energy Board approval process offers certainty to project builders.

For TransCanada, the stalled Keystone XL line from Hardisty south to Oklahoma is perhaps a good example of the kind of costly delays they hope to avoid.

But Pourbaix said Tuesday final approval seems to be only a few months away. He said the firm has been led to believe an amended environmental impact statement should be approved in a matter of weeks.

“At that point, we are of the view that the U.S. State Department will have every piece of information it could require to make a decision,” he said, adding that when the required statutory notice periods are included, the department should be able to make a decision in two to three months.

TransCanada also explained details of its recently announced $3 billion, 500-kilometre Grand Rapids pipeline project, a 50 per cent joint venture with Phoenix Energy Holdings to bring diluted bitumen from Fort McMurray to the Edmonton region and transport diluent northward.

The dual line will be built in stages, with the smaller pipe in operation by 2015 and carrying diluted bitumen. When the larger 900,000 bpd pipeline is completed by mid-2017, the smaller line will revert to carrying 330,000 bpd of diluent north.

For the fourth quarter, TransCanada said profit fell 19 per cent as shipments on natural gas pipelines declined. Net income dropped to $306 million, or 43 cents a share, from $376 million, or 53 cents, a year earlier.

TransCanada is moving less natural gas because a glut in North American supplies has reduced prices, resulting in more of the fuel being kept in storage. Deliveries on its Canadian Mainline system fell 19 per cent to average 4.2 billion cubic feet a day during the quarter.

“While the majority of our assets continued to generate stable and predictable earnings and cash flow, plant outages at Bruce Power and Sundance A along with a lower contribution from certain natural gas pipelines did adversely affect our financial results,” said Girling.

SOURCE: http://www.edmontonjournal.com/technology/Shippers+keen+TransCanada+natural+line+conversion+carry+crude+eastward/7955127/story.html#ixzz2Kng7Fr00

Nebraska governor approves Keystone XL route

Nebraska Gov. Dave Heineman has approved TransCanada Corp.’s revised route for the Keystone XL pipeline, clearing the way for a final decision from U.S. regulators on the project that would bring Canadian oil to the Texas coast.

The new route avoids Nebraska’s Sand Hills, an environmentally sensitive region overlaying the Ogallala aquifer, the state’s main source of groundwater. The pipeline will still cross the aquifer, though in a less sensitive area, according to a letter Heineman, a Republican, sent Tuesday to President Barack Obama and Secretary of State Hillary Clinton informing them of his decision.

“Keystone would have minimal environmental impacts in Nebraska,” Heineman said in the letter. “The concerns of Nebraskans have had a major influence on the pipeline route, the mitigation commitments and this evaluation.”

Heineman requested that Nebraska’s environmental review and route approval be added to the study underway by the State Department, which has authority over the project because it crosses an international border. TransCanada executives have said U.S. approval for the pipeline could come by the end of March. Victoria Nuland, a spokesman for the State Department, said the review won’t be ready by then.

“Keystone XL is the most studied cross-border pipeline ever proposed, and it remains in America’s national interests to approve a pipeline that will have a minimal impact on the environment,” Russ Girling, chief executive officer for the Calgary-based pipeline company, said Tuesday in an emailed statement.

Supporters of the 1,661-mile project have said it will provide thousands of jobs and help the United States avoid dependence on energy sources from politically unstable places. Critics have turned the pipeline proposal into an environmental debate over Canada’s oil sands and the heavy crude’s contributions to air and water pollution. Blocking pipeline transport of the oil to markets in the U.S. and overseas might jeopardize development of the resource.

TransCanada’s original permit request to build the $7.6 billion pipeline, planned to stretch from Alberta’s oil sands to Gulf Coast refineries, was delayed and ultimately rejected last year by the State Department after Heineman and other Nebraska officials criticized the route.

The project should now get “the final green light,” Sen. Mike Johanns, a Nebraska Republican who opposed TransCanada’s original route, said in a statement. “I hope President Obama will swiftly approve the project so we can take a significant step forward in meeting our energy needs.”

After the initial proposal was rejected last year, TransCanada broke the project into two pieces, one running from Alberta to Steele City, Neb., and the other from Oklahoma to Texas refineries. Construction has begun on the southern portion of the pipeline, and environmental activists have been arrested in several areas of Texas after staging protests or chaining themselves to construction equipment.

SOURCE: http://www.mysanantonio.com/business/article/Nebraska-governor-approves-Keystone-XL-route-4215201.php#ixzz2Itv8K5O1

TransCanada to invest $1-billion in Mexican natural gas pipeline

TransCanada Corp. plans to invest about $1-billion (U.S.) in a new natural gas pipeline in Mexico.

The Calgary-based pipeline giant announced Thursday that it has been awarded a contract to build, own and operate the pipeline by Mexico’s federal power company, the Comision Federal de Electricidad or CFE.

The 530-kilometre-long El Encino-to-Topolobampo pipeline will have a contracted capacity of 670 million cubic feet per day and is supported by a 25-year natural gas transportation services contract.

“Mexico’s government is engaged in a comprehensive plan to expand the nation’s electrical grid and generating capacity and much of that generation will be natural gas fired,” TransCanada president and CEO Russ Girling said in making the announcement.

“This award is another example of TransCanada’s commitment to help develop Mexico’s energy infrastructure in a sustainable and cost-efficient manner.”

The Topolobampo pipeline begins in El Encino, in Chihuahua state, and terminates in Topolobampo, in Sinaloa state, interconnecting with other pipelines that are expected to be built as a result of separate bid processes by the CFE.

Mr. Girling said TransCanada is bidding on a number of CFE proposals. The company has already built and is operating the Guadalajara and Tamazunchale pipelines and will soon break ground on a Tamazunchale pipeline extension.

TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometres and tap into virtually all major gas supply basins in North America. It is also developing one of North America’s largest oil delivery systems.

The company began work this summer on a $2.3-billion crude pipeline connecting an oil storage hub at Cushing Okla., to Texas refineries. It’s expected to start up in mid to late 2013.

The Gulf Coast pipeline was initially part of TransCanada’s $7.6-billion Keystone XL proposal, which would have sent Alberta crude to the Gulf via six U.S. states but has been held up by political and environmental wrangling in the United States.

SOURCE: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/transcanada-to-invest-1-billion-in-mexican-natural-gas-pipeline/article4809829/

Keystone XL pipeline concerns are being addressed

A state agency has issued its preliminary review of the Keystone XL pipeline that appears to indicate most concerns are being addressed.

The draft evaluation report, released Tuesday afternoon by the Nebraska Department of Environmental Quality, concluded that the new route of the controversial crude-oil pipeline successfully avoids the Sand Hills region of Nebraska, a step agreed to during a special session of the Legislature last year.

The report also stated that pipeline developer TransCanada Inc. had, by making some minor changes to the pipeline route in August, addressed concerns raised by the agency about crossing areas of sandy soils or areas near municipal drinking-water supplies of two small communities, Clarks and Western.

The agency also said TransCanada has agreed to compile an emergency response plan for leaks that might occur in the 36-inch, high-pressure pipeline, and buy $200 million in third-party liability insurance policy to cover any clean-up costs.

The company has provided the state with a chemical makeup of several forms of crude oil that will be shipped through the pipeline, which will carry 30 million gallons of oil a day. The exact composition of the oil, the agency said, will be made immediately available in the event of a leak.

Environmental groups, including Bold Nebraska and the Sierra Club, have raised concerns about the lack of information about the chemical makeup of diluted bitumen that will be carried by the pipeline.

While Tuesday’s draft report doesn’t raise “concerns” like those this summer about sandy soils and drinking-water wells in the path of the pipeline, he said it does “point out the impacts on different kinds of terrain” that will be crossed by the pipeline.

A public hearing on the draft report will be held at 6 p.m. on Dec. 4 at the Boone County Fairgrounds in Albion, Neb. Linder encouraged the public to comment on the report, either at the meeting or by mail or email.

A final report will be issued after the hearing. Gov. Dave Heineman will have the final say on whether the state approves the pipeline’s route across Nebraska.

That decision will be forwarded to the U.S. Department of State, which will make the final judgment on whether the entire Keystone XL project will be allowed. The project will transport oil from Canada’s tar sands region to the U.S. Gulf Coast, and pick up some oil from North Dakota and Montana along the way.

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TransCanada proposes new Keystone XL route in Nebraska

WASHINGTON, Sept 5 (Via Reuters) – The company planning to build the Keystone XL tar sands pipeline from Canada to Texas said on Wednesday it has submitted a new route for the project that will avoid sensitive ecological areas in Nebraska.

TransCanada Corp said the pipeline will avoid the Sandhills, a region of prairie and sand dunes that is rich in plants and wildlife, with thousands of ponds and lakes.

President Barack Obama delayed a decision on the pipeline earlier this year, citing concerns about the northern portion of the route near a major aquifer and the Sandhills in Nebraska.

TransCanada has been working with Nebraska officials to come up with a new route and it hopes to have U.S. State Department approval for the northern section early next year.

“Based on feedback from the Nebraska Department of Environmental Quality and the public, we have refined our proposed routing,” Russ Girling, TransCanada’s president and chief executive officer, said in the release.

The alternative route submitted in an environmental report to Nebraska on Wednesday was developed “based on extensive feedback from Nebraskans, and reflects our shared desire to minimize the disturbance of land and sensitive resources in the state,” said Girling.

A Nebraska public affairs official said he expected the state to publish maps of the new route on its website later on Wednesday.

An environmentalist said she would withhold comment on the new route until she had seen a map of the project.

A public affairs official with the Nebraska Department of Environmental Quality said he expected the state to publish maps of the new route on its website later on Wednesday.

Construction on the 700,000 barrels per day southern part of the line, renamed the Gulf Coast project, has already begun after Obama gave his support for that section.

The Gulf Coast project will drain a glut of crude in the U.S. midsection fed mostly by the oil boom in North Dakota.

The northern section of the line needs approval from the State Department because it crosses the national border.

SOURCE: http://in.reuters.com/article/2012/09/05/pipeline-keystone-route-idINL2E8K56YB20120905

NTSB blame multiple corrosion cracks & ‘weak’ regulations – Kalamazoo Oil Spill

The National Transportation Safety Board blamed multiple corrosion cracks and “pervasive organizational failures” at the Calgary-based Enbridge pipeline company for a more-than-20,000-barrel oil spill two years ago near Michigan’s Kalamazoo River.

The cost of the spill has reached $800 million and is rising, the NTSB said, making the pipeline rupture the most expensive on-shore oil spill in U.S. history. The pipeline’s contents — heavy crude oil from Canada’s oil sands — have made the spill a closely watched case with implications for other pipelines carrying such crude.

The NTSB also blamed “weak federal regulations” by the Pipeline and Hazardous Materials Safety Administration for the accident, which spilled at least 843,444 gallons of oil into a tributary of the Kalamazoo in Marshall, Mich. The oil spread into a 40-mile stretch of the Kalamazoo and a nearby wetlands area.

“This accident is a wake-up call to the industry, the regulator, and the public,” NTSB Chairman Deborah A.P. Hersman said in a statement.  She added that “for the regulator to delegate too much authority to the regulated to assess their own system risks and correct them is tantamount to the fox guarding the hen house.”

The spill began about 5:58 p.m. on July 25, 2010, when a 30-inch diameter pipeline ruptured. Twice, Enbridge workers tried to restart the pipeline after alarms about abnormal pressure in the line and 81 percent of the oil spilled over 17 hours after those alarms, the NTSB said.

“We believe that the experienced personnel involved in the decisions made at the time of the release were trying to do the right thing,” Enbridge’s chief executive, Patrick D. Daniel, said.“As with most such incidents, a series of unfortunate events and circumstances resulted in an outcome no one wanted.”

The case is being scrutinized by industry and environmental groups because it could threaten plans to build new pipelines to carry crude from Canada’s oil sands, or tar sands, into the United States. TransCanada’s controversial Keystone XL pipeline is one of the plans awaiting approval.

The NTSB, part of the Transportation Department, said the Enbridge pipeline break “was the result of multiple small corrosion-fatigue cracks that over time grew in size and linked together, creating a gaping breach in the pipe measuring over 80 inches long.”

SOURCE: http://www.washingtonpost.com/business/economy/ntsb-blames-enbridge-weak-regulations-in-kalamazoo-oil-spill/2012/07/10/gJQAWzqgbW_story.html

Corrosion Committee to Explore Effects of Crude to be Transported by Keystone XL

NACE International Logo
Committee will analyze whether diluted bitumen has an increased potential for release compared to other crude oils.

NACE International – The Corrosion Society along with three of its ‘Fellow’ membership will participate on a newly appointed National Academy of Sciences (NAS) committee formed to analyze whether diluted bitumen (dilbit) transported by transmission pipeline has an increased potential for release compared with pipeline transmission of other crude oils. The NACE Fellows are Dr. Brenda J. Little of the Naval Research Laboratory, Dr. Srdjan Nesic of Ohio University and Dr. Joe H. Payer of the University of Akron.

A chief concern about the transport of Canadian crude through the proposed Keystone XL pipeline is a claim that dilbit poses more release risks than other types of crude. In particular, the committee will examine whether there is evidence that dilbit has corrosive or erosive characteristics that elevate its potential for release from transmission pipelines when compared with other crude oils. Should the committee conclude there is no evidence of an increased potential for release, it will report this finding to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) by spring 2013. Alternatively, if the committee finds evidence indicating an increased potential, it will examine the adequacy of PHMSA’s pipeline safety regulations in mitigating any increased risk and report back to PHMSA by the fall of 2013.

“With all of the controversy surrounding Keystone XL, it is very important that a well-qualified team analyzes the risks, if any, of diluted bitumen,” said NACE Executive Director Bob Chalker. “NAS has put together the right group for the job. NACE supports this effort and I will be interested, along with many others, in seeing the final results.”

SOURCE: http://www.virtual-strategy.com/2012/06/21/committee-explore-effects-crude-be-transported-keystone-xl-includes-three-nace-fellows

Debate Intensifies Over Oil Produced From Canada’s Oil Sands

As the U.S. continues to increasingly rely on Canada as its most important foreign oil source, environmentalists and scientists are concerned about the repercussions of the partnership.

The U.S. has worked to fundamentally alter domestic oil and natural gas drilling over the past decade, as lawmakers work to achieve the long sought after goal of energy independence. While drilling activity has jumped both on and offshore in the U.S., the nation has increased its Canadian imports target as well.

However, Canada’s oil sands produce a kind of oil that engineers assert has a greater negative impact on the environment. Refining such oil requires new technology that releases a substantial amount of greenhouse gases, environmentalists say, and they are growing more concerned by the symbiotic relationship between the two North American neighbors and allies.

CNN reports that imports of oil from Canada’s oil sands are poised to jump more than 300 percent over the next 10 years. The failure of backers to ensure the construction of a pipeline that would transport such oil directly from Canada to refineries in the U.S. underscored how environmentalists have opposed the jump in what they deem “dirty oil,” but proponents are pushing forward with plans to build even more ambitious pipelines over the next few years.

By 2020, the U.S. is expected to import almost 10 percent of its total oil consumption from Canada’s oil sands, with more than 1.5 million barrels reaching the U.S. each day according to data from the Sierra Club. Such a precipitous uptick would require a major restructuring of the nation’s domestic refining facilities, and could spur a major wave ofengineering research and development as scientists work to improve such a process, experts say.

Canada’s oil sands produce bitumen, unlike wells in the Middle East and elsewhere in the world where crude oil is extracted. Bitumen, according to scientists, is significantly heavier than crude and, as a result, requires a more demanding refining process. What’s more, it is so viscous that oil companies must first dilute the fossil fuel with natural gas liquids before it can be transported through pipelines.

The debate over the transportation of bitumen has become the focal point of controversy as imports surge, according to the news provider. Environmentalists contend it is exceedingly dangerous to send bitumen through pipelines, as it could spur corrosion. However, scientists have thus far been unable to conclusively prove a causal relationship.

Moreover, some industry watchers have questioned whether the nation’s existing pipeline architecture is capable of transporting bitumen. UPI reports that pipeline operators said such an assertion is unsubstantiated, but the Sierra Club has argued the U.S. is not prepared for the coming deluge of bitumen imports.

“We’ve got all this unconventional crude and we’re completely unprepared for it,” said Michael Marx, a campaign director at the environmental organization.

Marx also said that bitumen is more difficult to clean up than conventional crude, as it is heavier than water and sinks. “We just don’t have the technical sophistication to vacuum oil off the bottom of a river,” Marx said.

Officials in Canada have strongly argued against the “dirty oil” label over the past few years. While they concede it requires a more thorough refining process, they noted that the U.S. routinely imports non-crude heavy oils from other nations. Still, environmentalists have increased their efforts to slow the surge in oil imports.

Oil engineers at the U.S. Department of Transportation, which is tasked with regulating oil pipelines, are currently working to more effectively study the subject. The oil industry and environmentalists are awaiting the results.

SOURCE: http://why.knovel.com/all-engineering-news/1532-debate-intensifies-over-oil-produced-from-canadas-oil-sands.html

Canada gives preliminary OK for new pipeline

The Canadian government said it conditionally approved plans by a division of TransCanada to expand natural gas pipeline capacity in the country’s west.

The National Energy Board announced it approved of three natural gas loops in northeastern British Columbia and northwestern Alberta. The 69-mile loops make up the so-called Northwest Mainline Expansion Project submitted by NOVA Gas Transmission Ltd., TransCanada’s Alberta division.

The $325 million project will link natural gas supplies in the region to markets in Canada and the United States, the NEB said.

“The NEB’s approval of this project is contingent on conditions that (NOVA) must meet,” the agency said in a statement. “The conditions relate to pipeline integrity, the protection of the environment, protection and monitoring of caribou habitat, and matters of public and Aboriginal consultation.”

The company estimates production from shale and conventional natural gas plays in the region could reach around 3.5 million cubic feet per day by 2025.
SOURCE: http://www.upi.com/Business_News/Energy-Resources/2012/02/29/Canada-gives-preliminary-OK-for-new-pipeline/UPI-26551330519419/