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Investor Call: Enbridge’s Keystone XL Clone Opens in October, Rail Facility to Follow

6:06 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

In a recent quarter two call for investorsEnbridge Inc executives said the company’s “Keystone XL” clone — the combination of the Flanagan South and Seaway Twin pipelines — will open for business by October.

As previously reported by DeSmogBlog, Enbridge has committed a “silent coup” of sorts, ushering in its own Alberta to Port Arthur, Texas pipeline system “clone” of TransCanada‘s Keystone XL tar sands pipeline. Unlike Keystone XL‘s northern leg, however, Enbridge has done so with little debate.

With the combination of the Alberta Clipper (now called Line 67, currently up for expansion), Flanagan South and Seaway Twin pipelines, Enbridge will soon do what TransCanada has done via its Keystone Pipeline System.

That is, bring Alberta’s tar sands to Gulf of Mexico refineries and send it off to the global export market.

According to Guy Jarvis, president of liquids pipelines for Enbridge, even though the Cushing, Oklahoma to Port Arthur, Texas Seaway Twin is technically operational, it will not become functional until Flanagan South opens in October.

“The base plan had been, and still is, to do the line fill of the Seaway Twin from Flanagan South. So we don’t expect to see too much off the Seaway Twin until Flanagan South does go into service,” Jarvis said on the investor call.

“It does have the capability to be line filled at Cushing if the barrels are available and the market signals would suggest that you would want to do that. But at this point in time, we think it will be the base plan that it is filled on from Flanagan South.”

Beyond piping diluted bitumen (“dilbit”) to market, Enbridge also has plans to market dilbit via rail in a big way.

All Aboard Enbridge’s Tar Sands-By-Rail

Jarvis unpacked his company’s plans to help move tar sands by rail during the call, as well.

“In terms of the rail facility, one of the things we’re looking at is – and the rail facility is really in relation to the situation in western Canada where there is growing crude oil volumes and not enough pipeline capacity to get it out of Alberta for a two or three year period,” he said.

“So, one of the things we’re looking at doing is constructing a rail unloading facility that would allow western Canadian crudes to go by rail to Flanagan, be offloaded, and then flow down the Flanagan South pipeline further into Seaway and to the Gulf.”

The Wall Street Journal explained that Enbridge’s rail loading facility can handle 140,000 barrels of heavy oil per day and will be open for business in early 2016.

“Competitive Advantage”

According to lobbying disclosure forms reviewed by DeSmogBlog, Enbridge spent $230,000 on lobbying the federal government in the first half of 2014. For a company that earned over $410 million (US dollars) in 2013, the amount equals a mere drop in the bucket.

But, the company acknowledged in its earnings call that its quiet and cheap — yet effective — efforts have paid huge dividends.

“So, we think that, while we’re already very competitive into the markets that we serve directly with pipelines, that competitive advantage into those markets is likely only to get stronger,” said Jarvis.

Enbridge’s “competitive advantage,” however, comes with a cost for everyone else: lighting the “fuse” to a “carbon bomb” for one of the filthiest, climate destroying fossil fuels on the planet in Alberta.

Silent Coup: How Enbridge is Quietly Cloning the Keystone XL Tar Sands Pipeline

10:48 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

A Canadian flag dripping with oil

Despite activist opposition, “pipeline giant Enbridge has quietly cloned its own Keystone XL in the U.S and Canada.”

While the debate over the TransCanada Keystone XL tar sands pipeline has raged on for over half a decade, pipeline giant Enbridge has quietly cloned its own Keystone XL in the U.S and Canada.

It comes in the form of the combination of Enbridge’s Alberta Clipper (Line 67), Flanagan South and Seaway Twin pipelines.

The pipeline system does what Keystone XL and the Keystone Pipeline System at large is designed to do: ship hundreds of thousands of barrels per day of Alberta’s tar sands diluted bitumen (“dilbit”) to both Gulf Coast refineries in Port Arthur, Texas, and the global export market.

Alberta Clipper and Line 67 expansion

Alberta Clipper was approved by President Barack Obama and the U.S. State Department (legally required because it is a border-crossing pipeline like KeystoneXL) in August 2009 during congressional recess. Clipper runs from Alberta to Superior, Wis.

Initially slated to carry 450,000 barrels per day of dilbit to market, Enbridge now seeks an expansion permit from the State Department to carry up to 570,000 barrels per day, with a designed capacity of 800,000 barrels per day. It has dubbed the expansion Line 67.

As reported on previously by DeSmogBlog, Line 67 is the key connecter pipeline to Line 6A, which feeds into the BP Whiting refinery located near Chicago, Ill., in Whiting, Ind. BP Whiting — the largest in-land refinery in the U.S. — was recently retooled to refine larger amounts of tar sands under the Whiting Refinery Modernization Project. 

Line 67 also connects to Line 61 via a fork in the road of sorts in Wisconsin. From there, it heads to Flanagan, Ill., the namesake of the start of Enbridge’s Flanagan South pipeline.

Like Keystone XL, Enbridge’s Line 67 expansion project has faced unexpected delays in its State Department and Obama Administration review process.

Flanagan South also shares a key legal commonality with TransCanada’s Keystone pipeline system.

That is, like Phase II and Phase III of that system — best known to the general public as Keystone XL’s southern leg and to TransCanada as the Gulf Coast Pipeline Project — it was permitted by the U.S. Army Corps of Engineers using the controversial Nationwide Permit 12 (NWP 12) process.

As documented here on DeSmogBlog, the southern leg of Keystone XL and Flanagan South both played a central role in separate but related precedent-setting federal-level court cases.

In reviewing the legality of approval via NWP 12 through the lens of “harms,” the courts ruled in both cases that the harms of losing corporate profits for both Enbridge and TransCanada trump the potential harms of ecological damage the pipelines could cause in the future. Climate change went undiscussed in both rulings.

According to a May 2014 company newsletter, Enbridge is “on schedule to put [Flanagan South] in operation later this year.”

“After eight months of construction, we are now in the home stretch for the nearly 600-mile pipeline project,” touts the newsletter. “At the peak of construction, between October 2013 and January 2014, there were on average 3,650 construction workers over the entire route — about 1,600 of those workers from communities located along the pipeline route.”

Seaway Pipeline

In a June 16 article titled, “Blame Canada,” Reuters pointed to two new “pipes set to hit U.S. Gulf with heavy crude,” which — as it pertains to Canada — is industry vernacular for tar sands.

Flanagan South was one of the pipelines pointed to in the Reuters piece.

The other is Enbridge’s Seaway Twin pipeline, co-owned on a 50/50 joint venture basis with Enterprise Products Partners. Seaway Twin, like Keystone XL’s southern leg, runs from Cushing, Okla., to Port Arthur, Texas.

Enbridge scheduled Line 67 to go on-line in mid-2014 and reach full-capacity by mid-2015.

But, because of backlash against the proposal from environmentalists and citizens who live along the pipeline expansion’s route, the company does not expect to receive a State Department expansion permit until mid-2015.

Flanagan South Pipeline

Read the rest of this entry →

For First Time, TransCanada Says Tar Sands Flowing to Gulf in Keystone XL South

11:56 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

TransCanada admitted for the first time that tar sands oil is now flowing through Keystone XL‘s southern leg, now rebranded the Gulf Coast Pipeline Project. The company confirmed the pipeline activity in its 2014 quarter one earnings call.

Asked by Argus Media reporter Iris Kuo how much of the current 300,000-400,000 barrels per day of oil flowing from the Cushing, Oklahoma to Port Arthur, Texas pipeline is tar sands (“heavy crude,” in industry lingo), TransCanada CEO Russ Girling confirmed what many had already suspected.

“I don’t have that exact mix, but it does have the ability to take the domestic lights as well as any heavies that find a way down to the Cushing market, so it is a combination of the heavies and the lights,” said Girling. “I just don’t know what the percentage is.”

The Keystone Pipeline System — of which Keystone XL’s northern leg is phase four of four phases — is and always has been slated to carry Alberta’s tar sands to targeted markets. So the announcement is far from a shocker.

More perplexing is why it took so long for the company to tell the public that tar sands oil now flows through the half of the pipeline approved via a March 2012 Executive Order by President Barack Obama.

“Oil is Oil”

When DeSmogBlog reported TransCanada had begun injecting oil into the pipeline’s southern leg in December, the company would not reveal what type of oil it was.

“As you’ve likely seen me quoted before, oil is oil and this pipeline is designed to handle both light and heavy blends of oil, in accordance with all U.S. regulatory standards,” TransCanada spokesman Shawn Howard told DeSmogblog at the time.

I am not able to provide you the specific blend or breakdown as we are not permitted (by our customers) from disclosing that information to the media. There are very strict confidentiality clauses in the commercial contracts we enter into with our customers, and that precludes us from providing that.

Now, though, it appears the company has let the proverbial cat out of the bag.

“Texas Bound and Flyin’”

In the first quarter of 2014, Keystone XL’s southern half has opened up the floodgates for what was once a glut of oil in Cushing to reach Gulf Coast refineries at record levels.

To borrow the title of Jerry Reed’s 1980 country song classic, it’s “Texas Bound and Flyin.’” An April 17 Energy Information Agency communiqué lays out the dirty details.

“The main driver of the recent crude oil inventory builds on the [Gulf Coast] is start-up of TransCanada’s [Gulf Coast Pipeline] which runs from the Cushing, Oklahoma storage hub to the Houston area,” explained the EIA. “In late January, TransCanada completed the first delivery of crude oil via [Gulf Coast Pipeline] to [Gulf Coast] refineries.”

In short, the glut of oil has teleported from Cushing to Texas in the aftermath ofKeystone XL’s southern leg opening for business in January, as explained in another EIA March 27 update.

“Crude oil inventories at Cushing, Oklahoma, the primary crude oil storage location in the United States, decreased 13 million barrels (32%) over the past two months,” the EIA wrote. “On March 21, Cushing inventories were less than 29 million barrels, more than 20 million barrels lower than a year ago.”

Northern Leg and Rail

Keystone XL’s northern leg, or what many know simply as Keystone XL, also came up on the earnings call.

Girling voiced frustration with how long the process has taken and with President Obama’s April 18 announcement to delay a decision on the northern leg until after the 2014 mid-term elections.

“In our view this delay is inexplicable. The first leg of our Keystone system took just over 600 days to review and approve,” said Girling. “Now after more than 2,000 days, five exhaustive environmental reviews and over 17,000 cases of scientific data, the review process continues to be delayed.”

The prospect of moving tar sands oil by rail to Cushing was also discussed on the call.

Read the rest of this entry →

Explosive Virginia Train Carried Fracked Bakken Oil, Headed to Potential Export Facility

10:34 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Platts confirmed CSX Corporation’s train that exploded in Lynchburg, Virginia was carrying sweet crude obtained via hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin. CSXCEO Michael Ward has also confirmed this to Bloomberg.

“Trade sources said the train was carrying Bakken crude from North Dakota and was headed to Plains All American’s terminal in Yorktown,”Platts explained. “The Yorktown facility can unload 130,000 b/d of crude and is located on the site of Plains oil product terminal.”

In January, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration issued a Safety Alert concluding Bakken crude is more flammable than heavier oils. Hence the term “bomb trains.”

At least 50,000 gallons of the oil headed to Yorktown is now missing, according to ABC 13 in Lynchburg. Some of it has spilled into the James River, as previously reported on DeSmogBlog.

map available on CSX’s website displaying the routes for its crude-by-rail trains offers a clear indication of where the train was headed.

Formerly a refinery owned by Standard Oil and then BP/Amoco, Plains All American has turned the Yorktown refinery into a mega holding facility.

Yorktown may become a key future site for crude oil exports if the ban on exports of oil produced domestically in the U.S. is lifted.

Yorktown: Future Oil Export Mecca?

In February, Plains CEO Greg Armstrong said on the company’s quarter four earnings call that Yorktown is ideally situated geographically to become an oil export mecca if the ban is lifted.

When asked by an analyst from Bank of America about the ongoing debate over lifting the crude oil export ban, Armstrong discussed how Plains could stand to profit from exports.

“Ultimately we’re positioned, we think well for either answer if they allow blanket exports we have assets in the right places that can help build that market niche,” said Anderson.

Harry Pefanis, President and COO for Plains, sang a similar tune to Anderson.

“I guess if I also just add to that if there was export…we’ve got couple of locations that we could load ocean-going vessels. Yorktown is a location where we can rail-in and load out an ocean-going vessel,” Pefanis explained.

The industry lobbying effort to lift the U.S.-produced oil export ban has picked up major steam in 2014, with the geopolitical crisis in Ukraine and Russia serving as the hook.

Keystone XL Connection

It’s only a matter of time until the familiar oil industry overture begins. That is, pointing to the Lynchburg disaster as the reason why the northern leg of TransCanada’s Keystone XL tar sands pipeline must be built.

Read the rest of this entry →

TransCanada Charitable Fund: Keystone XL South “Good Neighbor” Charm Offensive

1:40 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

No KXL sign in front of cops

TransCanada is trying to bribe its way to success, but is anyone buying?

TransCanada has taken a page out of former U.S. President Franklin Delano Roosevelt’s playbook and deployed a public relations “charm offensive” in Texas, home of the southern leg of its Keystone XL tar sands pipeline now known as the Gulf Coast Pipeline Project.

In the 1930s and 1940s, Roosevelt utilized a “good neighbor policy“ — conceptualized today as “soft power” by U.S. foreign policy practitioners — to curry favor in Latin America and win over its public. Recently, TransCanada announced it would do something similar in Texas with its newly formed TransCanada Charitable Fund.

TransCanada has pledged $125,000 to 18 Texas counties over the next four years, funds it channeled through the East Texas Communities Foundation. In February, the company announced the first non-profit recipients of its initial $50,000 grant cycle.

“The fund is designed to help improve East Texas communities and the lives of their residents through grants to qualifying non-profit organizations in the counties where TransCanada pipeline operations and projects exist,” explained a press release. “All funded projects and programs fall within three charitable categories: community, safety, and the environment.”

TransCanada utilizes the “good neighbor” language in deploying its own public relations pitch.

“At TransCanada, being a good neighbor and contributing to communities is an integral part of our success,” TransCanada’s Corey Goulet said in a press release. “The establishment of the fund is another example of our commitment to long-term community investment and our dedication to the people of East Texas.”

Fund Launched After Safety Issues Revealed

Less than a week after Public Citizen published its November 2013 report addressing safety issues discovered during the construction phase of KeystoneXL’s southern leg, TransCanada announced the launch of its charitable fund.

Public Citizen‘s report, “Construction Problems Raise Questions About the Integrity of the Pipeline,” found 250 miles of the pipelines’ 485-mile route had faulty welding, dents and several parts patched up, among other anomalies.

Julia Trigg Crawford, a Lamar County resident (one of the counties eligible for TransCanada’s grants) best known as the landowner who filed a major eminent domain lawsuit against TransCanada for Keystone XL South, told DeSmogBlog she believes the timing of the fund’s launch is suspect.

“Texans are smart enough to see what’s going on here,” Crawford said.

“Before the heat got turned up with the Public Citizen report, TransCanada’s community involvement consisted of half-page newspaper ads across Northeast Texas saying, ‘We want to be more than just a pipeline company. We want to be a trusted neighbor.’”

Environment and Safety Grants

Despite the concerns about the ecological impacts and safety issues related to Keystone XL’s southern half (or perhaps because of them), environment and safety are two of the categories TransCanada will give grants to out of the fund.

Safety grant “projects will enable emergency personnel to respond quickly and effectively to local needs and focus on emergency preparedness, accident prevention, and education and training,” says TransCanada on its grant application form, while environment grant “programs will conserve important habitat, protect species at risk, and educate individuals about the importance of the environment.”

Non-profits are eligible for grants of up to $5,000.

Not Charming, Rather Offensive

Read the rest of this entry →

State Dept’s Keystone XL Contractor, ERM Group, Also OK’d Controversial Pebble Mine in Alaska

2:22 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

ERM has always been able to turn a blind eye to serious environmental impacts.

DeSmogBlog investigation has revealed Environmental Resources Management Inc. (ERM Group) — the contractor performing the U.S. State Department’s environmental review for the northern half of TransCanada’s Keystone XL tar sands pipeline — gave the greenlight to Alaska’s controversial Pebble Mine proposal in June 2013.

The proposed Pebble Mine, located in Bristol Bay in southwest Alaska, contains mineable gold and copper. It’s also a major hub for fishing and the seafood industry, leading the Center for American Progress to call the battle over Pebble Mine a “resource war.”

“Bristol Bay…is home to the world’s largest commercial sockeye salmon fishery,” explains a November 2013 EarthWorks blog post. ”The devastation caused by a massive open pit mine would linger in perpetuity affecting not just Bristol Bay, but the commercial fishing industry everywhere in the Pacific Northwest.”

Like the Pebble Mine review, ERM’s review for the northern half of the U.S.-Canada border-crossing Keystone XL pipeline concluded the pipeline would have negligible environmental impacts.

EPA Tackles Pebble Mine, Keystone XL

Another thread tying Keystone XL and Pebble Mine together: in both cases, ERM Group’s environmental assessment flew in the face of the U.S. Environmental Protection Agency’s (EPA) assessment. In April 2013, the EPA critiqued ERM Group’s Keystone XL environmental review, while the EPA published a damning environmental review of Pebble Mine on January 15.

“The report concludes that large-scale mining in the Bristol Bay watershed poses risks to salmon, wildlife, and Native American cultures,” explains an EPA fact sheet published summarizing the study. “Bristol Bay supports the largest sockeye salmon fishery in the world, producing nearly 50 percent of the world’s wild sockeye with runs averaging 37.5 million fish each year.”

ERM scolded the EPA for not taking a balanced approach on Pebble Mine, not looking into the “positive effects” it would create if it opens for business.

“[EPA did not take] into account the positive effects of cash income from employment on a community’s overall subsistence-gathering capabilities, as well as, harvest-sharing capabilities,” wrote ERM. “Overall, the Assessment lacks discussion of potential positive effects associated with industrial development.”

U.S. Sen. Mark Begich (D-AK) didn’t toe the ERM party line, though.

“Wrong mine, wrong place, too big,” Begich said in a January 19 interview with the Anchorage Daily News. “Too many potential long-term impacts to a fishery that is pretty critical to that area but also to Alaska, to world markets. I think it will harm the environment, harm the salmon, harm the jobs that are connected to the fisheries industry out there.”

“A Polluted Process”

As documented previously here on DeSmogBlog, ERM has also green-lighted other projects with ecologically unsavory track records. These have ranged from an explosive pipeline project in the Caspian Sea to a contentious LNG project in Peru to a toxic tar sands refinery in Delaware.

All of these projects were met with backlash from environmentalists, but eventually received the customary ERM rubber stamp.

Some members of the U.S. House of Representatives have called ERM’s Keystone XL northern half environmental review into question, though.

Led by U.S. Rep. Raul Grijalva (D-AZ), 24 House Democrats sent a letter to President Obama on December 12 saying he shouldn’t green light the northern half of the pipeline until the State Department’s Office of Inspector General finishes its probe into how ERM Group was chosen and why. It’s what Friends of the Earth has called a “a polluted process.”

“The Department of State apparently overlooked these conflicts when it accepted Environmental Resources Management’s (ERM) bid to perform the analysis,” reads the letter. “Because of the seriousness of the conflicts…we believe no EIS from the company – draft or final – should be accepted by the administration before these issues are resolved.”

One thing is clear as Secretary of State John Kerry and President Barack Obama head into decision-making time on Keystone XL’s northern half: ERM has always been able to turn a blind eye to serious environmental impacts. Now it’s up to Obama and Kerry to avoid falling into the same trap. Read the rest of this entry →

Keystone XL Fork in the Road: TransCanada’s Houston Lateral Pipeline

1:49 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Houston Refinery at night

The southern leg of the Keystone XL pipeline is scheduled to bring oil & tarsands to Houston’s refineries starting in January.

Only Barack Obama knows the fate of the northern half of TransCanada’s Keystone XL tar sands pipeline.  But in the meantime, TransCanada is preparing the southern half of the line to open forcommercial operations on January 22.

And there’s a fork in that half of the pipeline that’s largely flown under the radar: TransCanada’s Houston Lateral Pipeline, which serves as a literal fork in the road of the southern half of Keystone XL’s route to Gulf Coast refineries.

Rebranded the “Gulf Coast Pipeline” by TransCanada, the 485-mile southern halfof Keystone XL brings a blend of Alberta’s tar sands crude, along with oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin, to refineries in Port Arthur, Texas. This area has been coined a “sacrifice zone” by investigative journalist Ted Genoways, describing the impacts on local communities as the tar sands crude is refined mainly for export markets.

But not all tar sands and fracked oil roads lead to Port Arthur. That’s where the Houston Lateral comes into play. A pipeline oriented westward from Liberty County, TX rather than eastward to Port Arthur, Houston Lateral ushers crude oil to Houston’s refinery row.

“The 48-mile (77-kilometre) Houston Lateral Project is an additional project under development to transport oil to refineries in the Houston, TX marketplace,” TransCanada’s website explains. “Upon completion, the Gulf Coast Project and the Houston Lateral Project will become an integrated component of the Keystone Pipeline System.”

Boon for Houston’s Refinery Row

Houston’s LyondellBasell refinery is retooling itself for the looming feast of tar sands crude and fracked oil bounty that awaits from the Houston Lateral’s completion.

“The company is spending $50 million to nearly triple its capacity to run heavy Canadian crude at the Houston refinery, to 175,000 bpd from 60,000 bpd,”explained a March article in Reuters.

LyondellBasell admits TransCanada’s Houston Lateral project is a lifeline ensuring its Houston refinery remains a profitable asset.

“Over time, heavy Canadian oil is going to be extremely important to this refinery,” the company’s spokesman David Harpole said in a February interview with Bloomberg. “It’s not all getting down there today but as time goes on, that will become more and more powerful to an asset like we have.”

But LyondellBasell’s not the only company with skin in the game. Valero — whose refining capacity is currently overflowing with fracked Eagle Ford shale oil — is also considering expanding its capacity to refine more tar sands crude.

Not “What If,” But “Right Now”

A financially lucrative asset to refining companies like LyondellBasell and Valero, Houston’s refineries are an issue of life or death for those living within the vicinity.

“In a December 2010 report, the Sierra Club linked tar sands refinery emissions to prenatal brain damage, asthma and emphysema,” a March Huffington Post article explained. “A recent Houston-area study found a 56 percent increased risk of acute lymphocytic leukemia among children living within two miles of the Houston Ship Channel, compared with children living more than 10 miles from the channel.”

Like Port Arthur, Houston — the headquarters for some of the biggest oil and gas companies in the world — is a major “sacrifice zone” for front-line communities, with many people suffering health impacts from the city’s four petrochemical refineries.

“Much of the debate around the Keystone XL pipeline has focused on the dangers of extracting and transporting the tar sands,” DeSmogBlog contributor Caroline Selle wrote in a May 2013 article. “Left out, however, are those in the United States who are guaranteed to feel the impacts of increased tar sands usage. Spill or no spill, anyone living near a tar sands refinery will bear the burden of the refining process.”

With Keystone XL’s southern half currently being injected with oil and with TransCanada counting down the weeks until it opens for commercial operations, those living in front-line refinery neighborhoods face a daunting “survival of the fittest” task ahead.

“With toxic chemical exposure nearly certain, it is unclear what the next step will be for residents [living in refinery neighborhoods],” Selle wrote in her May article. “[T]his is a life or death struggle more immediate than the ‘what-if’ of a pipeline spill. And it’s not a ‘what-if, [but rather] the fight is ‘right now.’”

Read the rest of this entry →

Pipeline Safety Agency Approves Startup of Keystone XL South

6:53 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

No Tar Sands banner

Despite serious safety concerns and months of protests, Keystone XL South is approved for tarsands.

DeSmogBlog has learned that TransCanada cleared the final hurdle for the southern half of its Keystone XL tar sands pipeline, receiving a green light last week from the Pipeline and Hazardous Materials Safety Administration (PHMSA) following a review of several safety concerns.

TransCanada announced this week that it has begun injecting oil into the southern half of its Keystone XL pipeline in preparation for commercial operations.

Leading up to PHMSA giving Keystone XL south the go-ahead to start up, Public Citizen raised several questions about the safety of the pipeline.

Will TransCanada respond to greivances raised about dents, faulty welding, pipeline material designated “junk” and other issues raised in the consumer advocacy group’s November investigation? And what about September 10 and September 26 warning letters obtained by Public Citizen raising similar concerns from PHMSA to TransCanada?

Both TransCanada and PHMSA have provided DeSmogBlog answers to these questions.

Rebranded the “Gulf Coast Pipeline Project” by TransCanada, the 485-mile Cushing, Oklahoma to Port Arthur, Texas Keystone XL southern half — approved via a March 2012 Executive Order from President Barack Obama — is set to open for business by mid- to late-January.

PHMSA’s Initial Concerns

In September, PHMSA drafted two letters to TransCanada expressing concerns over the integrity of the pipeline during its construction phase.

“During the months of June and July 2013, a representative [from PHMSA]…inspected the construction of the Keystone Gulf Coast Project,” reads a September 10 warning letter from R.M. Seeley, Director of PHMSA’s Southwest Region Office to TransCanada’s Vice President Pipeline Safety and Compliance, Vern Meier. “As a result of the inspection, it appears you have probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations.”

PHMSA’s September 10 warning letter said TransCanada had done a suboptimal job installing Keystone XL’s southern half, also writing that the coating utilized for Keystone XL’s southern half could easily degrade over time in the September 10 letter.

Two weeks later, PHMSA sent another warning letter to TransCanada on September 26, calling out TransCanada on its poor welding procedures. PHMSA could fine TransCanada up to $2 million, along with additional enforcement actions, if the company had failed to comply with PHMSA’s dictates outlined in both warning letters.

PHMSA Delays FOIA Response

After playing the “bad cop” role in its two September letters to TransCanada, PHMSA’s Southwest Office has backed off a bit.

In response to a FOIA request submitted by Public Citizen upon learning of the two September letters, PHMSA responded that, due to commercial reasons and the possibility of an ongoing investigation, Public Citizen will likely not be eligible for many of the records requested.

PHMSA Gives KXL South Green Light

TransCanada spokesman Shawn Howard told DeSmogBlog he believes all is safe and sound with Keystone XL’s southern half.

Read the rest of this entry →

Obama’s Keystone XL Trade-Off: Executive Order Expediting Everything Else

6:19 pm in Uncategorized by Steve Horn

While President Obama made a big deal out of delaying the northern half of the Keystone pipeline’s construction, he compensated by signing an executive order to expedite similar infrastructure projects everywhere else.

Cross-Posted from Mint Press News

Large segments of the environmental movement declared a win on Jan. 18, 2012, the dawn of an election year in which partisan fervor reigned supreme.

On that day President Barack Obama kicked the can down the road for permitting TransCanada’s Keystone XL pipeline’s northern half until after the then-forthcoming November 2012 presidential election.

“Northern half” is the key caveat: just two months later, on March 22, 2012 – even deeper into the weeds of an election year – President Obama issued Executive Order 13604. Among other key things, the order has an accompanying memorandum calling for an expedited review of the southern half of Keystone XL stretching from Cushing, Okla. to Port Arthur, Texas.

The day before, March 21, Obama flew on Air Force One to a pipe yard in Cushing – the “pipeline crossroads of the world” – for a special stump speech and photo-op announcing the executive order and memorandum.

Dubbed the Gulf Coast Pipeline Project by TransCanada – 95 percent complete and “open for business” in the first quarter of 2014 – the 485-mile tube will ship 700,000 barrels of tar sands crude per day from Cushing to Port Arthur, where it will then reach Gulf Coast refineries and be exported to the global market. It will eventually have the capacity to ship 830,000 barrels per day.

The subject of a large amount of grassroots resistance from groups such as Great Plains Tar Sands Resistance and the Tar Sands Blockade, the Gulf Coast Pipeline Project – when push comes to shove – is only the tip of the iceberg.

That’s because Obama’s order also called for expedited permitting and review of all domestic infrastructure projects – including but not limited to pipelines – as a reaction to the Keystone XL resistance.

A months-long Mint Press News investigation reveals the executive order wasn’t merely a symbolic gesture.

Rather, many key pipeline and oil and gas industry marketing projects are currently up for expedited review, making up for — and by far eclipsing — the capacity of Keystone XL’s northern half. The original TransCanada Keystone pipeline – as is – already directly connects to Cushing from Alberta, making XL (short for “extension line”) essentially obsolete.

Keystone XL’s northern half proposal is key for marketing oil obtained from the controversial hydraulic fracturing (“fracking”) process in North Dakota’s Bakken Shale basin.

Dubbed the Bakken Marketlink Pipeline, the segment has lost its importance with the explosive freight rail boom for moving Bakken fracked oil to market and other pipeline proposals. One of those pipelines, in fact, has received fast-track approval under the March 2012 Obama Executive Order.

Feeling the pressure from protest against the Keystone XL from groups such as the Tar Sands Action, Indigenous Environmental Network and others, Obama pulled a fast one: “wait and see” for XL’s northern half – which many claimed as a victory – and expedited approval of everything else via executive order.

Breaking down the Keystone XL executive order

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