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Plans to Get Tar Sands Crude to Texas Raise New Safety, Legal Issues

January 27, 2012

A new article in the Austin (TX) Statesman describes TransCanada and Enbridge/Enterprise’s maneuvering to provide additional pipeline capacity from the Cushing (OK) oil terminal to the Gulf Coast, without construction of the full Keystone XL pipeline, which would expand OK-TX capacity by 830,000 barrels per day.  Because there is unlikely to be full capacity on Keystone XL for many years, the OK-TX portion of the new pipeline could relieve congestion at the Cushing terminal.  Options include:

  • Building only the Cushing to Texas portion of Keystone XL (quite possibly a NEPA lawsuit trigger, as discussed in a previous post);
  • Get permission from the Federal Energy Regulatory Commission to reverse the flow of the 36-year-old Seaway Crude Oil Pipeline, adding capacity of up to 400,000 barrels per day within a few years (as reported in greater detail in financial press); or
  • Wait until the November elections to reapply for the full Keystone XL permit (which will probably happen in any event).

That second option, reversing an old pipeline that has only carried higher quality crude, raises serious safety concerns over the suitability of Seaway to carry diluted bitumen from the tar sands.  The highly corrosive nature of the product has triggered significant additional review and calls for heightened pipeline quality and safety controls.  It seems unlikely that Seaway is a safe option, but the Pipeline and Hazardous Materials Safety Administration has been very hesitant thus far to intervene in ordinary pipeline operations.  Calls for thorough PHMSA analysis of this proposal, before any action by FERC, are in order.

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2 Comments leave one →
  1. January 28, 2012 3:44 am

    http://www.calgaryherald.com/business/Chinese+firm+buys+full+stake+oilsands+project/5943628/story.html

    Chinese firm buys full stake in oilsands project

    PetroChina, the first Chinese national oil company to win 100 per cent ownership of a northern Alberta oilsands project, might seek a new partner to help develop it, an executive said Tuesday.

    The Chinese have urged the Canadian government to approve a pipeline to Canada’s Pacific coast so that tankers can ship oil sands crude to China. Sinopec, a Chinese state-controlled oil company, has a stake in a $5.5 billion plan drawn up by the Alberta-based Enbridge company to build the Northern Gateway Pipeline from Alberta to the Pacific coast province of British Columbia.

    Sinopec also recently paid $4.6 billion for a 9-percent stake in Syncrude, Canada’s largest oil sands project. Taking partial ownership has been seen as a way for the Chinese companies to make their investments more politically palatable.

    Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20120104_49_E3_CUTLIN94855

    China buys $673 million Canadian oil sands project | Tulsa World
    http://www.tulsaworld.com

  2. drew peacock permalink
    January 30, 2012 12:23 pm

    Hehehe now watch iran act up and oil.will hit 150 a barrel. Smooth obama, say no to dat dirty dirty canadian oil. There are so many decent places like the middle east for you to get your oil. Obama does care about jobs mostly his own.

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