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Labor Day News Dump: FERC Hands Enbridge Permit for Tar Sands by Rail Facility

4:07 pm in Uncategorized by Steve Horn

Syncrude’s base mine

On the Friday before Labor Day — in the form of an age-old “Friday News Dump“ — the Federal Energy Regulatory Commission (FERC) handed a permit to Enbridge, the tar sands-carrying corporate pipeline giant, to open a tar sands-by-rail facility in Flanagan, Ill. by early-2016.

With the capacity to accept 140,000 barrels of tar sands product per day, the company’s rail facility serves as another step in the direction towards Enbridge’s quiet creation of a “Keystone XL Clone.” That is, like TransCanada’s Keystone Pipeline System sets out to do, sending Alberta’s tar sands all the way down to the Gulf of Mexico’s refinery row — and perhaps to the global export market.

Flanagan sits as the starting point of Enbridge’s Flanagan South pipeline, which will take tar sands diluted bitumen (“dilbit”) from Flanagan to Cushing, Okla. beginning in October, according to a recent company earnings call. From there, Enbridge’s Seaway Twin pipeline will bring dilbit to Port Arthur, Texas near the Gulf.

Enbridge made the prospect of a tar sands-by-rail terminal public for the first time during its quarter two investor call.

“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,” Guy Jarvis, president of liquids pipelines for Enbridge, said on the call.

“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.”

FERC has given Enbridge the permit it needs to make that happen.

Enbridge “Scheme” Receives MN Permit

The announcement comes just days after the U.S. Department of State handed Enbridge a controversial permit to move an additional 350,000 barrels of tar sands per day across the U.S.-Canada border without the legally conventional Presidential Permit, public hearings or an environmental review conducted by the State Department.

Enbridge also received a permit from the Minnesota Public Utilities Commission (MPUC) the day before FERC’s “Friday News Dump,” locking in the State Department’s legal ruling at the state-level. MPUC voted 4-1 to permit the pipeline after a meeting lasting nearly eight hours.

The Commission did so even though the staffer analyzing comments and legal submissions acknowledged he reviewed far more climate and environmental concerns than vice versa, according to MPUC staff briefing papers reviewed by DeSmogBlog.

“Clearly there exists much public opposition to the increased consumption of fossil fuels and diluted bitumen sources in particular,” wrote Michael Kaluzniak, planning director for energy facilities permitting for MPUC.

“Additionally, the Commission received numerous comments expressing genuine concern regarding the potential impact of the project on water quality and overall dissatisfaction with Enbridge’s public safety and spill response actions.”

TransCanada and Tar Sands by Rail

With the combination of its Alberta Clipper expansion “illegal scheme” (referred to as such by the National Wildlife Federation), Flanagan South and Seaway Twin pipelines, as well as the FERC-approved rail facility, Enbridge now has the capacity to bring roughly 960,000 barrels per day of tar sands product to the Gulf.

For sake of comparison, Keystone XL has the capacity to bring 830,000 barrels per day of tar sands to the Gulf. But TransCanada has also brokered its own deals and made its own chess moves.

As reported on DeSmogBlog, TransCanada may build its own tar sands-by-rail facility while it waits for Keystone XL’s northern leg to receive — or not receive — a State Department permit and accompanying Presidential Permit.

“It is something…that we can move on relatively quickly,” TransCanada CEO Russ Girling stated on his company’s quarter one earnings call. “We’ve done a pretty substantial amount of work at the terminal end and mostly at the receipt and delivery points and that’s really what our key role in here would be.”

Since that call, TransCanada has not discussed its tar sands by rail business plans.

“Keystone? Who needs it?”

In July, Global Partners and Kansas City Southern announced plans to develop a tar sands by rail facility in Port Arthur, Texas with 340,000 barrels of storage capacity.

If TransCanada opens up its own tar sands by rail facility, the combination of that and Enbridge’s latest tar sands by rail move could feed the Global Partners-Kansas City Southern beast.

With tar sands now “Texas Bound and Flyin” in a major way, and both Enbridge and TransCanada finding a way to get tar sands to the Gulf, the seemingly hyperbolic headline published on July 10 by the Houston Business Journal seems to ring true more now than ever: “Keystone? Who needs it?Read the rest of this entry →

State Dept. Overseers of Contentious Enbridge Tar Sands Pipeline Workaround Have Industry, Torture Ties

1:51 pm in Uncategorized by Steve Horn

Camp Delta, Guantanamo Bay, Cuba

The Sierra Club, National Wildlife Federation (NWF) and other green groups recently revealed that pipeline giant Enbridge got U.S. State Department permission in response to its request to construct a U.S.-Canada border-crossing tar sands pipeline without earning an obligatory Presidential Permit.

Enbridge originally applied to the Obama State Department to expand capacity of its Alberta Clipper (now Line 67) pipeline in November 2012, but decided to avoid a “Keystone XL, take two” — or a years-long permitting battle — by creating a complex alternative to move nearly the same amount of diluted bitumen (“dilbit”) across the border.

The move coincides with the upcoming opening for business of Enbridge’s “Keystone XL” clone: the combination of the Alberta Clipper expansion (and now its alternative) on-ramp originating in Alberta and heading eventually to Flanagan, Ill., the Flanagan South pipeline running from Flanagan, Ill. to Cushing, Okla. and the Cushing, Okla. to Port Arthur, Texas Seaway Twin pipeline.

Together, the three pieces will do what TransCanada‘s Keystone XL hopes to do: move dilbit from Alberta’s tar sands to Port Arthur’s refinery row and, in part, the global export market.

Environmental groups have reacted with indignation to the State Department announcement published in the Federal Register on August 18. The public commenting period remains open until September 17.

Jim Murphy, senior counsel for NWF, referred to it as an “illegal scheme,” while a representative from 350.org says Enbridge has learned from the lessons of its corporate compatriot, TransCanada.

“When we blocked Keystone XL, the fossil fuel industry learned that they have a much stronger hand to play in back rooms than on the streets,” said Jason Kowalski, policy director for 350.org. “They will break the law and wreck our climate if that’s what it takes for them to make a buck.”

But as the old adage goes, it takes two to tango.

That is, influential State Department employees helped Enbridge find a way to smuggle an additional 350,000 barrels of tar sands per day across the border without public hearings or an environmental review.

Thus far, those following the issue have described the Enbridge maneuver as some sort of bureaucratic snafu.

“If anyone who’s high up in the State Department actually knew about this, they’d be up in arms,” 350.org’s Kowalski said in a recent interview with EnergyWire in reaction to State’s decision.

The reality, though, is more sordid. That is, higher-ups made this call, not just “bad apples.”

One of them has a key tie to the oil and gas industry, while the other helped lay the groundwork for the controversial “extraordinary rendition” torture program as a Bush Administration State Department attaché.

Patrick Dunn’s Industry Ties

On July 24, State Department staffer Patrick Dunn signed off on a letter rubber-stamping Enbridge’s pipeline chess move. In giving Enbridge authorization on official State Department letterhead, Dunn claimed it was not a form of authorization.

“Enbridge’s intended changes…do not require authorization from the U.S.Department of State,” Dunn wrote in the letter. “[W]e will consider [your] letter and its attachments to amend and to be part of your Presidential Permit for the capcity (sic) expansion in Line 67.”

Dunn’s letter does not give his job title, perhaps leading NWF to write him off as simply a “mid-level State Department official” in an August 25 blog post. His current position and State Department background, however, tells a different story.

February 2014 letter obtained by DeSmogBlog lists Dunn’s role as deputy office director for the Bureaus of European Affairs, the Western Hemisphere and African Affairs.

More specifically, Dunn heads up the three regions’ bureaus of energy resources, described as a “chief of staff” in an August 11 article published on Dominican Today. That article highlighted Dunn’s efforts — alongside Vice President Joe Biden — to cut deals with the Dominican Republic’s government, turning the country into an importer of gas obtained via hydraulic fracturing (“fracking”) in the U.S.

Before working his way up to the powerful Bureau of Energy Resources, Dunn helped lead numerous U.S. Embassies abroad, including in Honduras and Angola as top economic adviser, and Cape Verde as deputy embassy director.

What came before any of that, though, may go a long way in explaining how he came to oversee such an important cross-border pipeline project in the first place.

According to the Petroleum Equipment Suppliers Association (PESA), Dunn graduated in 1997 from the Association’s Foreign Service Officer Energy Industry Training Program, which is funded in part by the State Department and has a Board of Directors stuffed with oil and gas industry executives.

“PESA’s Foreign Service Officer Energy Industry Training Program was created in 1993 to increase the practical knowledge of energy attaches and economic officers with responsibility for oil and gas issues stationed in American embassies in countries where energy is a major issue,” reads a Program description.

A glance at PESA’s website demonstrates that industry executives regularly serve as presenters at the Foreign Service Officer Energy Industry Training Program.

Deborah Klepp’s Ties to Rendition, Corrupt Contracting

Though Dunn wrote the July 24 letter to Enbridge, he is not the only senior level State Department staffer overseeing the Enbridge Alberta Clipper file.

Read the rest of this entry →

Court: Key Environmental Law Doesn’t Apply to Part of Enbridge Keystone XL “Clone”

6:06 pm in Uncategorized by Steve Horn

A judge's gavel

A judge just ruled federal law doesn’t apply to this pipeline firm.

U.S. District Court for the District of Columbia has ruled that Enbridge’s 600-mile-long Flanagan South Pipeline, a Keystone XL “clone,” is legally cleared to proceed opening for business in October.

Approved by the U.S. Army Corps of Engineers via a controversial regulatory mechanism called Nationwide Permit 12 (NWP 12), Judge Kentanji Brown Jackson, an Obama-appointed judge, ruled NWP 12 was not a federal government “action.” Thus, Brown posited that Enbridge did not need to use the National Environmental Policy Act (NEPA) regulatory process and NWP12 was up to snuff.

The case pitted the Sierra Club and the National Wildlife Federation (NWF) against the Army Corps of Engineers and Enbridge and has lasted for just over a year, with the initial complaint filed on August 13, 2013 (Case #: 1:13-cv-01239-KBJ).

Sierra Club and NWF submitted the recent precedent-setting Delaware Riverkeeper v. Federal Energy Regulatory Commission (FERC) case as supplemental authority for Sierra Club v. U.S. Army Corps of Engineers on the day that decision was handed down.

But Jackson brushed it aside, saying it doesn’t apply to Flanagan South, despite the fact that the Delaware Riverkeeper v. FERC decision said that a continuous pipeline project cannot be segmented into multiple parts to avoid a comprehensive NEPA review.

Although Enbridge will operate this project as a single pipeline, Flanagan South was broken up into thousands of “single and complete” projects by the Army Corps of Engineers. This helped Enbridge skirt the requirement of a more comprehensive and public-facing NEPA review, which involves public hearings and a public comment period.

“Here, not only was there no NEPA analysis of this massive project, there was never any public notice or opportunity for involvement before it was constructed across four states,” Sierra Club attorney for the case, Doug Hayes, told DeSmogBlog. “The entire thing was permitted behind closed doors.”

For all intents and purposes, then, Flanagan South is a fait accompli and tar sands diluted bitumen (“dilbit”) will begin pumping through it as summer turns to fall.

Private Company, Hands-Off Approach

At 48-pages, Jackson’s ruling centers around a key central argument: Enbridge is a private company and Congress has never given executive agencies the green light to regulate domestic oil pipelines.

“Congress has not authorized the federal government to oversee the construction of private domestic oil pipelines; consequently, Enbridge has undertaken to build the planned [Flanagan South] Pipeline largely on its own, primarily by securing easements from the landowners who own the property over which the pipeline will operate,” wrote Jackson.

Judge Jackson said that a laissez-faire governmental approach to authorizing pipelines is appropriate, according to her reading of the law on the books.

“[T]he gist of the Court’s conclusion is that Plaintiffs are wrong to insist that any federal agency had an obligation under NEPA or any other statute to conduct an environmental review of the impact of the entire [Flanagan South] Pipeline before Enbridge broke ground on the project,” she opined.

“Connected Action” Doctrine

Another key legal precedent discussed in Jackson’s ruling was Delaware Riverkeeper v. FERC, covered by DeSmogBlog in June.

She weighed the merits of the “connected action” doctrine as applied to a lack ofNEPA review for Flanagan South, writing it does not apply to the pipeline because the Army Corps of Engineers has no obligation to do a NEPA review in this case.

“In [Delaware Riverkeeper v. FERC] the connected actions rule applied because the courts were required to assess whether the agencies had improperly limited the scope of the review of actions within their own jurisdiction—a determination that is fundamentally different from the question Plaintiffs present here, i.e., whether [NEPA] must be expanded to include an environmental review of actions completely outside the agencies’ purview,” Jackson wrote.

Army Corps Abusing NWP 12?

Hayes told DeSmogBlog back in November that the Army Corps of Engineers’ intricate involvement in permitting massive tar sands pipeline projects is at the root of the problem.

“The Corps is abusing the nationwide permit program. Nationwide permits were intended to permit categories of projects with truly minimal impacts, not tar sands oil pipelines crossing several states,” said Hayes. “What the Corps is doing is artificially dividing up these massive pipelines, treating them as thousands of individual projects to avoid NEPA compliance.”

Congress Passed NEPA in 1969

The greatest irony of Jackson’s decision is that Congress passed NEPA — known by legal scholars as the “environmental Magna Carta“ — in 1969, and it was signed into law by President Richard Nixon in 1970.

Read the rest of this entry →

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 →