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Friday, August 6, 2010

TransCanada Safety Waiver Request Withdrawal Diversionary Tactic

Rule #1: Never trust TransCanada. Yesterday I celebrated TransCanada's withdrawal of its safety waiver request. But even as I typed that entry, I thought, "What's the catch?"

Here's the catch: TransCanada isn't giving up its corner-cutting, profit-milking, aquifer-endangering plan to skirt American safety regulations and pump more oil than they ought through the Keystone XL pipeline. They're just trying to distract us.

In its safety waiver request, TransCanada was asking permission to build Keystone XL with thinner-than-usual steel and to be able to pump oil through it at 80% of the maximum load pressure specified. Safety regs limit pumping pressure to 72% of maximum. TransCanada is now saying they'll accept the pumping pressure limit of 72%. But TransCanada still plans to build the pipeline with the thinner steel (lots likely from defective steel supplier Welspun) they've been proposing all along. Then, when all the negative press about BP's Gulf spill and Enbridge's Michigan spill and TransCanada's own Keystone leaks right here in South Dakota has subsided, they'll come back to the feds and file the same old safety request to get permission to turn the pressure up to 80%, just as they planned.

Am I just being paranoid or ungenerous toward TransCanada? No. Their own press release makes clear that they intend to do just that. I'll highlight the corporate Newspeak and trick phrases below. But don't be fooled: TransCanada plans to run Keystone XL with thinner steel and unsafe pressures. They plan to put the Ogallala aquifer and our High Plains ecosystems at greater risk of oil spills.

Special Permit Application Withdrawn for Keystone Gulf Coast Expansion Pipeline

Calgary, Alberta - August 5, 2010 - TransCanada has withdrawn its request to the Pipeline and Hazardous Materials Safety Administration (PHMSA) for a special permit. The permit would have allowed TransCanada to build the proposed Keystone XL pipeline using stronger steel with additional safety conditions and operate the pipeline at a slightly higher pressure than current federal regulations for oil pipelines in the United States.

After listening to concerns from the public and various political leaders, TransCanada made the decision to withdraw the permit application. The company will build Keystone XL using the as-proposed stronger steel [read: thinner steel] and operate it at a lower level of pressure, consistent with current U.S. regulations.

The company recognizes it needs to take more steps to assure the public and stakeholders the parameters of the special permit would result in a safer pipeline [i.e., we have a marketing problem, not an engineering or environmental problem]. The company will continue to establish an operating record which will demonstrate the strength and integrity of the Keystone Pipeline System [translation: we need to keep the Madville Times from getting any more DENR reports], which has been granted a special permit.

Keystone XL will implement the additional safety measures that would have been required under the special permit. These measures offer an enhanced level of safety and would allow TransCanada to request a special permit in the future [i.e., they think they can wait the bad press out]. These safety measures also will be consistent with those that have been implemented on the existing Keystone Pipeline. In issuing the special permit for Keystone, PHMSA concluded the permit would provide a level of safety equal to or greater than that provided if the pipeline were operated under the current standard.

Without the special permit, Keystone XL will meet all of its initial commercial commitments to serve Gulf Coast refineries. Keystone also will continue to work with U.S. producers in the Bakken and broader Williston Basin area to provide needed transport for growing production in Montana and the Dakotas.

The Keystone XL project received approval in March 2010 from both the South Dakota Public Utility Commission and the National Energy Board in Canada. Pending receipt of additional permits, construction is planned to begin in 2011.

When completed, the Keystone XL project will increase the commercial capacity of the overall Keystone Pipeline System from 590,000 barrels per day to approximately 1.1 million barrels per day. The $12 billion system is 83 percent subscribed with long-term, binding contracts that include commitments of 910,000 barrels per day for an average term of approximately 18 years.

Commercial operations of the first phase of the Keystone system began June 30. Construction of the extension from Steele City Nebraska to Cushing Oklahoma is one-third complete and the pipeline is expected to be operational in 2011.

Keystone XL is a planned 1,959-mile (3,134-kilometre), 36-inch crude oil pipeline stretching from Hardisty, Alberta and moving southeast through Saskatchewan, Montana, South Dakota and Nebraska. It will connect with a portion of the Keystone Pipeline that will be built through Kansas to Cushing, Oklahoma and facilitate take away capacity from U.S. hubs located on the pipeline. The pipeline will then continue on through Oklahoma to a delivery point near existing terminals in Nederland, Texas to serve the Port Arthur, Texas marketplace.

To view a map of the proposed pipeline route, please visit the project web page at www.transcanada.com/keystone

With more than 50 years' experience [though not in high-pressure oil pipelines], TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada's network of wholly owned natural gas pipelines extends more than 60,000 kilometres (37,000 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 380 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, over 11,700 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America's largest oil delivery systems. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit:

Paul Elliott
Government Relations
TransCanada Corporation
Telephone: (646) 823-7026
Cell: (917) 828-3983

NRDC agrees with me that this is all a P.R. ploy, pure diversionary baloney. Here's what TransCanada is really saying: The oil industry is getting bad press now. Plus, the market fundamentals aren't shaping up the way we'd hoped. We probably won't have as much oil demand to meet during the first year or two of the pipeline's operation anyway. We don't need to pump as much oil through it when we start up. Our profits will be fine, the bad press will subside, and then, after those American Tea Partiers throw Obama out in 2012, we can ask the Palin Administration to sign our safety waiver... and give us another half-billion-dollar subsidy.

Keystone XL is still a threat to our water, our very livelihood on the plains. We don't want it, and we don't need it. State Department, just say no.
Distantly related: The Big Sioux River from Sioux Falls south is currently a biohazard... because extreme pressure and corrosive contents make sewer pipes burst.

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