Kinder Morgan proposes bitumen pipeline to Kitimat

VANCOUVER, B.C. - In a June 2 story by Vancouver website Tyee, confirmed by Northwest Coast Energy News, Kinder Morgan is proposing a second pipeline to carry bitumen from the Alberta oil sands to the port of Kitimat.

The proposal was part of a presentation to industry analysts during a conference on March 24, with a PDF of the Power Point presentation posted on the Kinder Morgan Web site.

The presentation says the proposed pipeline is one of several alternatives proposed for the expansion of the existing Kinder Morgan Transmountain Pipeline.

The pipeline to Kitimat would branch off from the Transmountain Pipeline go through Prince George and then follow existing pipeline routes to Kitimat and not follow the proposed Enbridge Northern Gateway route.

EPA slams State Department DEIS for Keystone XL, recommends delay in approval

WASHINGTON – In a politically astute move that was widely anticipated, the Environmental Protection Agency in a July 6 letter took the U.S. State Department off the hook by recommending a delay in approval of construction of TransCanada’s proposed Keystone XL crude oil pipeline.
If the State Department accepts the recommendation, it can delay a decision on the controversial pipeline until after fall elections.
In recommending a delay in approval, the Environmental Protection Agency said the draft environmental impact study for TransCanada Corp.'s proposed oil pipeline from Canada to the Gulf of Mexico is inadequate and should be revised.
Keystone XL would move bitumen from Alberta, Canada, down through Montana, South Dakota and Nebraska in the upper Great Plains. It would then merge with the Keystone pipeline under construction in Kansas before splitting off again to pass through Oklahoma to end at the largest U.S. refining complex in Texas and the Gulf of Mexico.
Environmental groups have raised concerns that the pipeline could pollute air and water supplies and harm migratory birds and other wildlife. They have also speculated about what they consider inadequate pipeline safety and emergency spill response.
In a letter to the State Department, EPA's assistant administrator for enforcement and compliance assurance, Cynthia Giles, said the draft environmental impact statement failed to adequately address those concerns.
The impact from "air emissions from refineries and the potential contamination of drinking water supplies from an oil spill have not been fully evaluated," Giles said in the letter.
She also said the study also does not "evaluate the environmental justice issues associated with potential impacts to communities in Port Arthur, Texas, where numerous industrial facilities, including chemical plants and a hazardous waste incinerator, are contributing to the residents' overall exposure to contaminants."
The agency said the State Department should revise the study and open it up for more public comment.
TransCanada spokesman Terry Cunha said the company disagrees and that the State Department "did a thorough and complete job in preparing the Draft EIS."
He said TransCanada looked "forward to the environmental review process continuing through DOS's review of comments and preparation of the Final EIS."
The EPA sent its report to the State Department, which has to approve the pipeline because it crosses an international border.
The State Department is reviewing comments from eight agencies on the draft environmental report. The public comment period on the current draft document ended July 2.
"The State Department seriously considers all public comments received as part of the public comment process. However, we will not have a detailed response until we complete the review process," State Department spokeswoman Jill W. Dietrich said in an e-mail.
Keystone XL will move diluted bitumen from Alberta, Canada, down through Montana, South Dakota, Nebraska in the upper Great Plains, and then from Oklahoma to Texas and into the Gulf of Mexico. Under its planned route, the pipeline would cross several rivers and aquifers, including the Ogallala aquifer which supplies water to several Midwestern states.
TransCanada has said the pipeline would provide a reliable source of oil to the U.S. from a stable trading partner and would not adversely affect the environment.
Cunha has said construction of Keystone XL should provide more than $20 billion in new spending to the U.S. economy and more than $585 million in state and local taxes in states along the pipeline route.
Susan Casey-Lefkowitz, director of international programs for the National Resources Defense Council, said the environmental advocacy group was "happy to see how seriously EPA was taking the environmental and public health concerns around the pipeline," and said other pipelines have not undergone such scrutiny.
Keystone has already won approval for pipelines that move oil from Canada through the Dakotas, Nebraska and Missouri to Illinois, as well as for the section being built in Kansas.
"But of course... the first Keystone was under the Bush administration, and the goal of the Bush administration was to push it through as quickly as possible," she said.
She said NRDC has asked the State Department to release correspondence from other federal agencies that have responded to the Keystone XL proposal but had not seen any of those.
EPA gave the State Department’s draft EIS its lowest possible rating. EPA recommended that the State Department provide new analysis and information in a revised draft environmental impact statement that will circulate for public review. This means additional time for analysis and reflection. EPA also says that the proposal is a potential candidate for referral to the White House Council on Environmental Quality - the office responsible for developing recommendations when there are disagreements among agencies.

Groups lobby State Department for approval of Keystone XL pipeline

WASHINGTON—The Obama administration is grappling with a bid to dramatically increase the flow of carbon-heavy Canadian crude to the U.S.
TransCanada Corp.’s proposed $7-billion Keystone XL pipeline, if approved, will be the single largest conveyor of Alberta bitumen to the U.S. - a 2,700-kilometer, 900,000 b/d line running all the way to the refineries of Houston, with the potential to double stateside consumption of Canadian crude.
The decision on Keystone rests with U.S. Secretary of State Hillary Clinton, whose department must approve transboundary pipelines based on considerations of “national interest.”
Canada has been lobbying on multiple fronts - including a U.S. ad campaign in which the Alberta government extols ongoing efforts to lighten its oil sands footprint. Alberta Premier Ed Stelmach has written to Clinton, stressing what many oil sands supporters view as the Canadian industry’s most persuasive selling point, the fact that Canada is stable, reliable and not the Middle East.
Other lobby groups, including the oil-industry backed Consumer Energy Alliance, are stumping for Keystone, arguing that as many as 13,000 shovel-ready jobs will be created with the stroke of Clinton’s pen. The CEA calls the project a “no-brainer,” pointing to significant union backing led by the United Association of Plumbers and Pipefitters.
Clinton’s State Department is two weeks into a 90-day countdown on the decision - but postponements are likely as other government agencies weigh in.
“There is a cautious optimism that the Keystone pipeline will go through - but perhaps not until after November’s midterm elections,” one consultant familiar with Canadian lobbying efforts in Washington told the Toronto Star.

Keystone Pipeline starts deliveries from Canada’s oil sands to Illinois

CALGARY, Alta. – TransCanada Corp. on June 30 announced that linefill of the first phase of the US$12 billion Keystone Pipeline has been completed and commercial deliveries of crude oil to U.S. Midwest markets at Wood River and Patoka, Ill., began on June 30.
"This represents a significant milestone in the overall development of the Keystone Pipeline project," says Hal Kvisle, TransCanada president and chief executive officer. "Looking forward, Keystone will play an important role in linking a secure and growing supply of Canadian crude oil with the largest refining markets in the United States, significantly improving North American energy security.
"The pipeline will also continue to have a significant impact on the North American economy through the thousands of manufacturing and construction jobs it is creating and the millions of dollars in tax revenues that will be paid annually to state and local authorities," added Kvisle. "Recently, an independent economic study found that the Keystone Gulf Coast expansion alone would inject more than US$20 billion into the U.S. economy and create 119,000 person-years of employment.
"We take pride in our long-standing reputation as a safe pipeline operator and socially responsible company," added Kvisle. "Construction and operation of the Keystone Pipeline system will continue to meet or exceed world-class safety and environmental standards. We are committed to being a reliable and safe operator that treats all stakeholders with honesty and respect."
In Canada, the first phase of Keystone involved the conversion of approximately 537 miles of existing natural gas pipeline in Saskatchewan and Manitoba to crude oil pipeline service. It also included building 232 miles of new 30-inch diameter pipeline, 16 pump stations and the Keystone Hardisty Terminal.
The U.S. portion of the Keystone Pipeline included laying 1,084 miles of new 30-inch pipeline in North Dakota, South Dakota, Nebraska, Kansas, Missouri and Illinois. It also involved construction of 23 pump stations and delivery facilities at Wood River and Patoka, Ill.
TransCanada has begun construction of the second phase of Keystone. It includes a 298-mile extension from Steele City, Neb., to Cushing, Okla. and 11 new pump stations which will increase the capacity of the pipeline from 435,000 b/d to 591,000 b/d. The second phase of Keystone is expected to be in-service in the first quarter of 2011.
In July 2008, TransCanada announced plans to expand the Keystone crude oil pipeline system and provide additional capacity of 500,000 b/d from Western Canada directly to the U.S. Gulf Coast.
TransCanada received approval in March 2010 from both the National Energy Board in Canada and the South Dakota Public Utility Commission for the proposed Gulf Coast Expansion project. TransCanada expects to begin construction of the Gulf Coast expansion in the first quarter of 2011, pending the receipt of all regulatory approvals.
The Keystone Gulf Coast Expansion project involves construction of a 1,661-mile, 36-inch crude oil pipeline that will begin at Hardisty, Alta., and extend southeast through Saskatchewan, Montana, South Dakota and Nebraska. It would incorporate the portion of the Keystone Pipeline that is currently under construction through Kansas to Cushing, Okla. The pipeline will then continue on through Oklahoma and Texas to a delivery point near existing terminals on the Gulf Coast, to serve the Port Arthur, Texas, marketplace.
When completed, the expansion project will increase the commercial capacity of the Keystone Pipeline system to approximately 1.1 million b/d.
The US$12 billion Keystone Pipeline system is 83 per cent subscribed with long-term, binding contracts that include commitments of 910,000 b/d for an average term of approximately 18 years.

Sinking price of Canadian oilsands crude threatens bitumen production, pipeline

The cost of oil from Alberta’s tar sands is trading near the cheapest relative to the New York benchmark in 17 months as refineries in the Midwest shut for maintenance and pipeline costs escalate.
Western Canada Select traded at a discount of $14.65 to West Texas Intermediate on April 30, near the $18 gap on April 15 that was the widest since November 2008.
Enbridge Inc. has won approval for a 33 percent tariff increase to move oil via its pipeline to the Midwest, where the U.S. Energy Department said more than twice as much refinery capacity than usual is offline for maintenance.
The higher tolls will hurt Suncor Energy Inc. and Alberta’s oil sands producers, which will be forced to offer discounts to the refiners to remain competitive with oil available from the U.S. Gulf Coast.

NRDC questions State Dept.’s early release of DEIS for Keystone XL

WASHINGTON - Senior Attorney Susan Casey-Lefkowitz of the Natural Resources Defense Council wrote on her Blog on April 9 “the State Department (on April 9) made available on its webpage its draft environmental impact statement (DEIS) for the proposed Keystone XL tar sands pipeline. The DEIS is oddly dated one week from now and it seems as though no Federal Register notice has been published. We can only hope that its premature release is a trial balloon and that initial reaction will be considered before the real publication occurs.”
NRDC contends that State should have waited for completion of a new White House guidance on incorporating greenhouse gas emissions impacts into environmental impact statements. And, State should have been taking a hard look at whether Keystone XL is in the national interest before investing in a draft EIS.
Keystone XL is a target of environmental groups because it will double the amount of tar sands oil currently being piped into the United States – of what will be bitumen, not syncrude. Much of the tar sands oil received in the U.S. is already refined to a synthetic crude, more like common oil. Bringing in the raw bitumen in the new pipeline means that the upgrading and refining has to take place in the United States, resulting in increased emissions of greenhouse gases, heavy metals, and other pollutants, say the environmentalists.