US State Department delays Keystone approval until 2013, new route likely if approved

Energy Environment Politics

 Updated 1915 Nov. 10, with link to TransCanada statement, 1940 with more reaction.

The United States Department of State has delayed approval of the controversial Keystone XL pipeline until 2013.

A news release posted on the State Department’s website confirmed earlier media speculation about a delay in the pipeline project approval until after the current US presidential election cycle.

Based on the Department’s experience with pipeline project reviews and the time typically required for environmental reviews of similar scope by other agencies, it is reasonable to expect that this process including a public comment period on a supplement to the final EIS [Environmental Impact Statement]…  could be completed as early as the first quarter of 2013. After obtaining the additional information, the Department would determine, in consultation with the eight other agencies…  whether the proposed pipeline was in the national interest, considering all of the relevant issues together. Among the relevant issues that would be considered are environmental concerns (including climate change), energy security, economic impacts, and foreign policy.

The State Department release also indicates that,if the Keystone XL pipeline is approved, it will likely be rerouted around environmentally sensitive areas, further delaying construction and likely raising costs for TransCanada, the company that wants to build the pipeline. The release says that the State Department has been “conducting a transparent, thorough and rigorous review of TransCanada’s application.”

As a result of this process, particularly given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska…

During this time, the Department also received input from state, local, and tribal officials. We received comments on a wide range of issues including the proposed project’s impact on jobs, pipeline safety, health concerns, the societal impact of the project, the oil extraction in Canada, and the proposed route through the Sand Hills area of Nebraska, which was one of the most common issues raised….

The concern about the proposed route’s impact on the Sand Hills of Nebraska has increased significantly over time, and has resulted in the Nebraska legislature convening a special session to consider the issue.

The CEO of TransCanada, Russ Girling, reacting to news that the US State Dept. has delayed approval of the Keystone XL pipeline said Thursday, Nov. 10, 2011, “This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

 
Girling also said, “”We remain confident Keystone XL will ultimately be approved.

The premier of Alberta, Alison Redford called the decision “disappointing,” saying in a news release:

“It is disappointing that after more than three years of exhaustive
analysis and consultation on this critical project, we find out that a
decision will be delayed until early 2013. Our position has always been
clear that we respect and understand that approval of the pipeline is a
U.S. domestic matter, but the fact remains that Keystone XL is a key
piece of infrastructure for our province. I sincerely hope that the
State Department made this decision based on science and evidence and
not rhetoric and hyperbole from very well-organized interest groups.


Alberta is steadfastly committed to this project and my government will
continue to advocate that we are the safest, most secure and responsible
source of oil for the United States. I will seek immediate answers
from U.S. officials to determine why this decision was made and how the
process will unfold going forward.


The industry group the American Petroleum Institute was less diplomatic than Redford, in its own words, the API “blasted” the decision and directly blaming what it called “radicals.”

This decision is deeply disappointing and troubling. 
Whether it will help the president retain his job is unclear, but it
will cost thousands of shovel-ready opportunities for American workers,”
said API President and CEO Jack Gerard.


“There is no real issue about
the environment that requires further investigation, as the president’s
own State Department has recently concluded after extensive project
reviews that go back more than three years.  This is about politics and
keeping a radical constituency opposed to any and all oil and gas
development in the president’s camp in November 2012.

There has been speculation that cancellation or delay of the Keystone XL project would increase pressure to build the Enbridge Northern Gateway pipeline.

Related:

Keystone XL delayed until 2013, media reports say

Energy  Politics

Numerous media reports, quoting sources, are saying that approval of  the Keystone XL pipeline from Alberta to Texas has been delayed until 2013,  after the current American election cycle.

The New York Times
says U.S. to Delay Decision on Pipeline Until After Election
 

The Obama administration is preparing to delay a decision on the contested Keystone XL pipeline while it studies an alternate route, effectively pushing any action past the 2012 election, officials and lobbyists who have been briefed on the matter said on Thursday. An announcement is expected as early as Thursday afternoon.

The proposed project by a Canadian pipeline company had put President Obama in a political vise, squeezed between demands for secure energy sources and the jobs the project will bring, and the loud opposition of environmental advocates who have threatened to withhold electoral support next year if he approves it.

CBC reports Keystone project reportedly shelved until 2013

The U.S. State Department will order another environmental assessment for the Keystone XL pipeline route, allowing U.S. President Barack Obama to shelve the controversial issue until after the 2012 elections, media reports said Thursday.

Earlier Reuters and Bloomberg reported that US State Department had ordered new studies on the route of the Keystone pipeline.

Reuters says

The United States will study a new route for the Keystone XL Canada-to-Texas oil pipeline, U.S. officials said on Thursday, delaying any final approval beyond the 2012 election and sparing President Barack Obama a politically risky decision for now.

The delay was a victory for environmentalists who say oil sands crude development emits large amounts of greenhouse gases. It would deal a blow to companies developing Alberta’s oil sands and to TransCanada Corp, which planned to build and operate the conduit.

Analysts have said a long delay could kill the $7 billion project because it would cause shippers and refiners to look for alternative routes to get Canadian oil sands crude

The questions for northwestern British Columbia is, whether long delays in the Keystone XL pipeline will ramp up pressure to build the Northern Gateway pipeline from Alberta to Kitimat. One big difference here is that Stephen Harper has already won re-election and has a safe and pro-pipeline majority government.

TransCanada restarting Keystone oil pipeline: Reuters

Reuters 

TransCanada Corp (TRP.TO) was restoring operations on Sunday along the Keystone crude oil pipeline, one week after it was shut by a leak at a Kansas pumping station, a company spokesman said.

“We are in the process of restarting Keystone but I can’t give you a firm time line (on shipments) – likely imminent,” said TransCanada spokesman James Millar in statement.

The 591,000 barrel-per-day pipeline brings oil from Hardisty, Alberta to the Cushing, Oklahoma, oil hub.

TransCanada News Release



CALGARY, Alberta – May 13, 2011 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced it has re-started its Keystone Pipeline system. The line has been closed since May 7 following an above-ground incident at a pump station in Sargent County, North Dakota. 

More than 30 workers and their equipment have been on site at the Ludden Pump Station. Three hundred and ninety three barrels of oil have been recovered out of an estimated 500 barrels. Three hundred cubic yards of contaminated soil will be removed to an approved location and replaced with clean soil and gravel. The majority of the clean-up should be finished by the weekend.

 “TransCanada has taken this incident very seriously. We have fully communicated details regarding the incident and our corrective actions to our U.S. regulator PHMSA in ensuring the steps we have taken will enable us to safely re-start the pipeline,” said Russ Girling, TransCanada president and chief executive officer. “We reacted quickly, shutting down the line within a few minutes of detecting a drop in pressure, demonstrating our safety systems work effectively.”

US allows restart of Keystone pipeline: Reports

There are media reports that the United States Pipeline and Hazardous Material Safety Administration is permitting the restart of the Keystone pipeline after earlier saying it could not be restarted following a spill on May 29.

 

The Wall Street Journal reports

The U.S. Department of Transportation on Saturday approved TransCanada Corp.’s plan to restart its Keystone pipeline…. TransCanada on Saturday provided results of its testing along the Keystone and can restart it as soon as the morning of July 5, the PHMSA said in a letter to the company.

“Based on a review of the information submitted, the restart plan is approved,” PHMSA Central Region Director David Barrett said in the letter.

Reuters reports that pipeline could start as early as Sunday:

 

TransCanada Corp (TRP.TO) can restart its Keystone oil pipeline on Sunday, after the company satisfied a series of safety conditions following leaks that idled the key export line twice in less than a month, the U.S. pipeline safety regulator said on Saturday. 

 The U.S. Pipeline and Hazardous Materials Safety Administration said it approved resumption of crude flows from Canada on the pipeline after the agency evaluated the company’s restart plan and was satisfied safety requirements were met.

As of this posting there is no confirming information on the PHMSA or TransCanada websites.

US orders Keystone pipeline shut down after leaks: Globe and Mail

The Globe and Mail 

U.S. regulators have barred TransCanada Corp. from restarting its Keystone pipeline until the company can provide more proof that the system is safe, after several leaks in just a year of operation….. 

 Following at least three Keystone leaks in May, the U.S. Pipeline and Hazardous Materials Safety Administration took sudden action Friday. It issued a corrective action order that mandates 14 steps TransCanada must take before resuming operations, including demands for information, mechanical and metallurgical testing and a report on all issues and incidents on the line…. 

 For Canada’s oil and gas industry, the Keystone outage is just the latest in a series of pipeline-related headaches. A major Michigan spill on an Enbridge Inc. pipeline last summer resulted in rolling outages that lasted until this spring, as the company worked to fix problems on the line

Document
US Pipeline and Hazardous Materials Administration order to shut down the Keystone pipeline (PDF)

No real need for pipeline between oilsands and West Coast: bureaucrat: Vancouver Sun

Vancouver Sun


A multi-billion dollar pipeline project that would link the oilsands region to the coast of British Columbia offers new export capacity that the Canadian industry does not really need, senior bureaucrats have told the federal government… 

 The details of the federal assessment were released in over 300 pages of internal documents from Natural Resources Canada, obtained by Postmedia News, which also noted rising public opposition to Enbridge’s proposed project over concerns about oil spills that could plague pristine natural habitat on land and water — especially in light of recent accidents such as BP’s Gulf Coast well blow-out and an Enbridge crude oil pipeline rupture and leak into the Kalamazoo River in Michigan.

Editor’s note The Sun says Environmental Defence of Toronto filed the original Access To Information request.

Alaska pipeline development doesn’t bode well for NWT project: Alberta Oil

Alberta Oil Magazine 

Darren Campbell column

As everyone returns to the office after the Victoria Day long weekend, supporters of the star-crossed Mackenzie Gas Project (MGP) are left to wonder what the future holds for the $16.2 billion proposed pipeline scheme now that BP plc and ConocoPhillips have announced they are dropping out of the race to build an Alaska natural gas pipeline.

What does a couple of Big Oil companies giving up on their plans to build a pipeline have to do with the fortunes of a project proposing to ship natural gas from the Northwest Territories’ Mackenzie Valley to southern markets?

TransCanada defends pipeline project in Washington

PostMedia News

Calgary-based TransCanada Corp. courted its U.S. congressional allies — and confronted its foes — on Monday amid an effort by Republicans to pass legislation forcing the Obama administration to approve the controversial Keystone XL pipeline before the end of 2011.
In testimony before the House subcommittee on energy and power, TransCanada executive Alex Pourbaix dismissed as “completely false” allegations by environmental groups that diluted bitumen from Alberta’s oilsands is more dangerous and corrosive to transport than conventional heavy oil.

Time for Alaska, Big Oil to lay gas line cards on the table : Anchorage Daily News

Anchorage Daily News

Column by Paul Jenkins

Time for Alaska, Big Oil to lay gas line cards on the table

It is time for TransCanada, Exxon and the state to lay their cards on the table; time to tell Alaskans whether their natural gas pipeline project is deader than Donald Trump’s presidential campaign.

To almost nobody’s surprise, BP and Conoco Phillips yanked the plug on their Denali gas line project, an effort to build a $35 billion, large-diameter natural gas pipeline from Alaska’s North Slope to points south. Who could blame them? The companies said that after more than three years and $165 million they could not drum up enough binding “ship-or-pay” agreements to secure financing.

‘Native land claims scare the hell out of investors’: energy expert : The Hook

The Hook (Tyhee blog)

‘Native land claims scare the hell out of investors’: energy expert

Fierce First Nations opposition could very well topple Enbridge’s west coast pipeline proposal, a Washington-based energy expert argues.

“Native land claims scare the hell out of investors,” Robert Johnson told an Alberta energy conference, according to an Edmonton Journal report. “My level of confidence [in the project] has gone down quite a bit, unfortunately.”

Johnson belongs to senior management at Eurasia Group, which claims to be the “world’s leading global political risk research and consulting firm.”