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Archive for Monday, October 18, 2010

Canada-U.S. pipeline on hold amid oil’s recent woes

October 18, 2010

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— The steel is staged, and crews are waiting to lay the last and most expensive leg of TransCanada Corp.’s multibillion-dollar pipeline network that would carry Canadian oil to refineries along the Gulf Coast.

The sand hills near Mills in north central Nebraska, through which the Keystone XL pipeline is planned to be built, is shown earlier this month. TransCanada Corp.’s second pipeline, the $7 billion Keystone XL, is planned to carry crude oil from tar sands near Hardisty, Alberta, to the Gulf Coast. The project is now delayed indefinitely, with little official explanation.

The sand hills near Mills in north central Nebraska, through which the Keystone XL pipeline is planned to be built, is shown earlier this month. TransCanada Corp.’s second pipeline, the $7 billion Keystone XL, is planned to carry crude oil from tar sands near Hardisty, Alberta, to the Gulf Coast. The project is now delayed indefinitely, with little official explanation.

Yet final U.S. government approval for the massive project, once assumed to be on a fast track, is now delayed indefinitely, with little official explanation. The company had hoped to begin laying pipe by the end of the year, but those prospects have dimmed.

Some experts conclude the negative publicity surrounding oil-related disasters, particularly the offshore BP leak that polluted the Gulf Coast for months, has made the Keystone XL pipeline a victim of guilt by association.

“I think it’s fair to speculate that BP fouled the nest for TransCanada,” said Richard Fineberg, a pipeline analyst with Ester, Alaska-based Research Associates. “There is much more attention to the industry and its dark side. It’s going to be harder to get things done at this moment.”

If the Calgary-based company is battling poor timing on this leg of the project, it enjoyed much better timing during the previous leg. The Keystone pipeline — separate from Keystone XL albeit part of the same 3,800-mile underground network — sailed through the approval process when Americans were clamoring for the government to do something about record gas prices.

The delay is frustrating for some business and labor leaders who were counting on the new revenues from the pipelines.

“I think all that safety stuff has already been done by now. Let’s do something,” said Ken Mass, president of the Nebraska AFL-CIO.

The massive pipeline network — about five times the length of the trans-Alaska oil pipeline — is designed to move 1.5 million barrels of Canadian oil daily to U.S. refineries.

TransCanada won approval two years ago for the first Keystone pipeline, which carries crude oil across Saskatchewan and Manitoba and through North Dakota, South Dakota, Nebraska, Kansas, Missouri and Illinois.

Oil began coursing through the 36-inch Keystone pipeline in June, and it appeared that permitting and construction would go as slickly for TransCanada’s Keystone XL. That $7 billion leg of the system is designed to carry crude oil from tar sands near Hardisty, Alberta, to the Gulf Coast via Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Because both pipelines cross the U.S.-Canadian border, presidential permits from the State Department are required. But department officials have given no signal about when they might approve the final permit for Keystone XL, despite enthusiastically touting the Keystone pipeline as a project with little opposition when it was at this stage three years ago.

“I don’t know that it was expected to take this long, but it’s not a simple process,” State Department spokesman Bill Cook said last week.

Comments

just_another_bozo_on_this_bus 3 years, 11 months ago

"That $7 billion leg of the system is designed to carry crude oil from tar sands near Hardisty, Alberta, to the Gulf Coast via Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas."

Producing oil from tar sands is an ecological disaster, and it requires a BTU of energy for every BTU of oil produced.

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