Keystone XL pipeline still awaiting approval

Published on Saturday, 8 March 2014 22:06 - Written by Adam Russell arussell@tylerpaper.com

Crude oil began moving through the controversial Keystone pipeline from Cushing, Okla., to refineries along the Gulf Coast earlier this year and supporters hope portions delayed by required permits will gain approval soon.

Groups opposed said the pipeline will remain in limbo because it doesn’t meet presidential permit requirements.

Portions of the Gulf Coast Pipeline Project run through Wood and Smith counties, northeast and southeast corners of Cherokee County and western Nacogdoches County.

The pipeline’s path lies just east of Winnsboro, Hawkins, Winona, New Chapel Hill, Arp, New Summerfield, Reklaw and Wells.

The pipeline was championed as an economic benefit to communities along the pipeline. The $2.5 billion capital investment represented a ripple effect, including jobs, and spending in local economies along the path.

Opposition stemmed from potential environmental effects of spills and easement purchasing practices by the pipeline builder TransCanada, which included the use of eminent domain to take land from uncooperative landowners.

Tom Mullins, president and CEO of the Tyler Economic Development Corp., said the East Texas leg of the overall project had overwhelming community support and short- and long-term benefits outweighed environmental concerns.

Mullins said the pipeline project brought commerce to Smith County and TransCanada plans to add about 20 permanent pipeline support jobs as the project continues to progress.

The Keystone XL project has been mired in an extensive review process for almost five years as TransCanada awaits a presidential permit from President Barack Obama. A presidential permit is required because the pipeline would cross the U.S.-Canadian border.

Portions of the northern end of the route were rerouted after opposition gained momentum against the pipeline’s path through wetlands in Nebraska. A decision by the president about the northern leg of the project is expected soon.

There is fear among environmentalists and concerned landowners, that a break in the pipeline could spill thousands of gallons of the diluted bitumen, which has the consistency of peanut butter, into waterways, underground aquifers and other sensitive ecological areas.

TransCanada spokesman Shawn Howard said the pipeline has been pumping more than 500,000 barrels of oil from Cushing to refineries along the coast daily since Jan. 22.

Howard said there have been no problems. He emphasized that reports surrounding a dozen “spills” along initial legs of the Keystone system during their first year in operation in 2010 were limited to pumping stations and above ground facilities.

Spills ranged from a few gallons to 21,000 gallons.

Those problems have been addressed, he said.

Howard said the southern leg is one of the safest, most highly scrutinized pipelines in the U.S. and it meets or exceeds every industry safety standard.

“The pipeline is doing what it’s supposed to do,” he said.

Friday was the close of the 30-day public comment period during which the Department of State collected millions of inquiries for and against the pipeline.

Howard said TransCanada would now wait for the official review and a decision by President Obama.

Opposition to the pipeline continues but derives from a small faction of eco-activists and landowners, Howard said.

Calls to the Sierra Club, which has been actively opposing the pipeline during every phase, including easement purchases and construction of portions in East Texas, were not answered by press time.

Email updates from spokesman Eddie Scher indicate TransCanada is overconfident about receiving presidential approval.

“In spite of this most recent pronouncement that approval for the project is certain, the Keystone pipeline is no closer to being approved than it’s ever been,” Scher said. “In fact, with a growing grassroots movement opposing the pipeline, recent analysis that shows the pipeline fails the president’s climate test, and no approved route through Nebraska, the pipeline’s prospects seem to lessen by the day. No amount of projected confidence by TransCanada is going to change that.”

Alex Mills, president of the Texas Alliance of Energy Producers said the pipeline project makes sense for average Americans. It will relieve a pipeline bottleneck for millions of barrels of crude stored in Cushing, Okla., in the safest most efficient way to ship oil, he said.

Mills said environmental concerns are miniscule compared to the overall impact for the nation from a national security and market standpoint.

“The pipeline is a no-brainer in my opinion,” he said. “I don’t understand the concern and energy policy reasons for not having (the entire pipeline) open tomorrow.”

The entire project is expected to add more than 700,000 barrels a day to the nation’s pipeline capacity at its peak and bring oil from a friendly nation — Canada — which already is supplying 28 percent of all imports — instead of relying on unfriendly and unreliable sources in the Middle East and South America.

President and CEO of Fair Oil Co. Bob Garrett agreed.

He said the Gulf Coast connection improved an “inadequate” pipeline system and freed up the bottleneck preventing movement of domestic crude stored in Cushing.

Garrett said domestic production has “boomed” because of technological advances in the past five years.

Subsequently, the oil produced in West Texas and across the country overwhelmed the existing system and forced millions of barrels of oil to wait its turn in Cushing, Okla.

“You can produce all the oil you want, but if there’s no infrastructure to move crude to refineries, it’s not worth much,” he said.

Mills said the pipeline gives more opportunity for competition between nations and options for producers. Competition is good for consumers, he said.

Oil prices are driven by supply and demand, he said, and opening an easy route for Canadian producers would add supply and likely reduce prices in the crude market, which trickles down to products such as gasoline.

“If (the northern leg) opened tomorrow and Canadian crude was flowing it would have a softening effect on crude prices in general based on the increased supply — theoretically,” he said. “Anytime you increase supply and demand remains constant, the price goes down, but it’s anybody’s guess how much.”