TransCanada Digging Up Keystone Pipeline, Checking for "Anomalies"

That Sioux Falls paper reports that TransCanada is digging up six 120-foot stretches of the Keystone I pipeline here in South Dakota, three sites in Nebraska, and one in Missouri. TransCanada reports "anomalies" in the pipeline:

During a November inspection of the 1,087-mile pipeline, the company found some places where the pipe may have expanded. Exploratory digs are required whenever an inspection shows that a pipe may have expanded beyond allowable limits [Cody Winchester, "TransCanada Inspecting Portions of Keystone Pipeline in South Dakota," that Sioux Falls paper, 2010.12.09].

Expansion anomalies? Where have I heard that term before?

The documents provided show that PHMSA investigated a total of seven pipelines, four constructed by Boardwalk Partners, LP (Boardwalk), and three by Kinder Morgan, Inc. (Kinder Morgan). PHMSA confirmed that five of these pipelines contained significant amounts of defective pipe. Specifically, the documents show that the pipe stretched under pressure, creating “expansion anomalies” that indicate use of low-strength steel. To repair their pipelines, the affected companies removed and replaced hundreds of pipe joints.

A number of companies are implicated in producing defective pipe, but it appears that Welspun Corp. Ltd (Welspun), an Indian steel pipe manufacturer, produced most of it. For example, according to released documents, Welspun was responsible for 88% of pipe with expansion anomalies provided to Boardwalk ["Use of Substandard Steel by U.S. Pipeline Industry 2007 to 2009," Plains Justice, 2010.06.28].

Expansion anomalies. Defective pipe joints. Welspun. TransCanada. Remember this story? Plains Justice sounded the alarm about defective steel from Indian pipemaker Welspun back in June. Welspun supplied 47% of the steel for the Keystone I pipeline during the same period that it supplied defective steel other U.S. pipelines.

Correction! 2010.12.10 12:20 CST: The original documents Plains Justice analyzed to alert us to the Welspun defects did not indicate that the Pipeline and Hazardous Materials Safety Administration had taken any action on the issue with respect to TransCanada. However, PHMSA has indeed ordered these tests and digs in response to the discovery of the Welspun defects in other pipelines. However, as Phillip O'Connor of the St. Louis Post-Dispatch notes, TransCanada would be digging up a lot more pipe if the Obama Administration hadn't eased pipeline regulations in October 2009.

How did the South Dakota media respond to these concerns? Mostly with silence.

How did TransCanada respond?

TransCanada officials said they had not reviewed the Plains Justice report but offered assurances the pipeline was safe. They noted that TransCanada's contracts with mills outline specifications above industry standards, and the company reviews manufacturing processes and quality control tests conducted by the suppliers. In addition, the company performs its own quality assurance checks after manufacturing.

"Our pipeline has been fully tested, and it is safe," spokesman Terry Cunha said [Phillip O'Connor, "Group Fears Leaks in New Oil Pipeline," St. Louis Post-Dispatch, 2010.07.03].

...fully tested and it is safe. Then what the heck are the backhoes doing at ten sites digging it up?

Do I get to say, "I told you so" yet?

TransCanada, find the problem, fix it, and tell us exactly what you find and what you do to make sure you've solved the problem. PHMSA, impose a litle oversight here. Secretary Clinton, look inot this and think long and hard before you approve that Keystone XL permit.

And South Dakota media: pay the heck attention! If you'd have hopped on the Welspun-TransCanada-Keystone story back when I told you about it, if you had done your watchdog job and turned up the heat on Big Foreign Oil, maybe the nice fellas on the backhoe crews could have done their work on a nice sunny day in July instead of having to freeze their cans busting frozen sod in December.

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Update 17:18 CST: TransCanada has found anomalies at 12 sites in South Dakota, 14 in Nebraska, 12 in Kansas, and 9 in Missouri. Someone get me a map! The evaluation of the tests from the ten dig sites may take several weeks, but TransCanada fearlessly continues to pump 250,000 barrels a day through the Keystone pipeline. TransCanada is also filling the pipeline's Cushing extension, which branches from Keystone I at Steele City, Neberaska, and runs to Cushing, Oklahoma.

The three sites being dug up in Nebraska are all in Cedar County, near the site of the fourth documented TransCanada Keystone pump station leak, which came to light Tuesday.

Obama Admin Easing Pipeline Regs

Yo, Barack, where's the green love?

Unlike the South Dakota press, the St. Louis Post-Dispatch continues to give well-researched coverage to mounting concerns over the integrity of the Keystone pipeline. Reporter Phillip O'Connor finds that the Obama Administration is going softer on pipeline companies than the Bush Administration did:

Pipeline safety officials first learned of problems with defective steel while conducting tests on several projects built during a pipeline construction boom from 2007 to 2009. An investigation revealed that several lines contained significant amounts of defective pipe that stretched under pressure. The problems were traced to defective steel produced by several mills, but mostly by Welspun Power and Steel, a manufacturer based in India.

Almost half of the steel in the 30-inch Keystone pipeline came from Welspun and was manufactured about the same time the company provided defective steel on several other pipeline projects.

In some cases, the Pipeline and Hazardous Material Safety Administration took remedial action.

In April 2009, for example, the agency ordered the Houston company, Boardwalk Pipeline Partners, to replace more than 300 sections of newly built 42-inch gas pipeline, about half of which had expanded by as little as 0.6 percent.

But then in October 2009, the pipeline agency issued new guidelines. From that point on, only pipe that expanded by at least 1.5 percent would need to be replaced. Companies were told they needed to notify the agency only of expansions of 1 percent or more [Phillip O'Connor, "Concern Mounts over Oil Pipeline Safety," St. Louis Post-Dispatch, 2010.09.01].

October 2009. Nope, can't blame Bush for that one. Plains Justice rightly alerted all of us to the huge amount of Welspun steel in the Keystone pipeline. The Welspun steel now carrying 435,000 barrels of tar sands oil a day across eastern South Dakota clunked out of Indian foundries about the same time as the batches in which inspectors found hundreds of defects. The rules of the previous administration forced pipeliners to dig that bad steel up. Then President Obama's people changed the rules and said the same potential danger in a pipeline across South Dakota wasn't worth digging up.

TransCanada thanks you, I'm sure, Mr. President, but we're the ones whose votes you need... and who live atop hundreds of miles of potentially leaky Indian steel (not to mention pump stations blowing gaskets almost every month). Let's bring back the Bush-era rules and check out that pipeline!

TransCanada Keystone Springs Two Leaks in Two Months, Meets Century Spill Quota

I was wrong: the June oil spew at Pump Station 22 near Roswell on the TransCanada Keystone Pipeline was not the first reported spill. Shortly after posting the DENR report on the Roswell incident, I received this DENR report documenting a 5-gallon leak at Pump Station 21 near Carpenter in Beadle County on May 21, 2010. This time a leaky valve was the culprit.

Leaky valve... would that be anywhere near a pipe joint... the kind of joint Welspun might have built... the kind of joint that was the source of hundreds of defects in Welspun-supplied steel in other pipelines built between 2007 and 2009?

Five gallons doesn't sound like much, and tar sands oil is supposed to be relatively more viscous than regular crude oil, meaning it shouldn't spread as much. But heavy rain during the leak appears to have spread the oil around the site in a 47x29-foot area. The clean-up crew ended up hauling away 185 cubic yards of contaminated dirt and 9356 gallons of contaminated water. Compare that to the 100-gallon leak at Roswell, which resulted in removal of 200 cubic yards of oily soil and only 2500 gallons of yucky water.

A mere five gallons of spilled oil is pretty good for local business. The May spill report includes receipts from Safety-Kleen out of Sioux Falls for about $9500 in giant Shop-Vac services. I wonder if TransCanada and Governor Rounds included that in their promises of economic benefits from the pipeline.

Now here's the really good news about the Carpenter and Roswell spills: in its June 2006 pipeline risk assessment for its State Department permit application, TransCanada predicted the following spill frquencies:

Of the postulated 1.4 spills along the Keystone Pipeline system during a 10-year period, the study's findings suggest that approximately 0.2 would be 50 barrels or less; 0.8 would consist of 50 to 1000 barrels; 0.3 would consist of between 1,000 and 10,000 barrels; and 0.2 would contain more than 10,000 barrels (Appendix A). The spill volume frequency distribution likely underestimates the proportion of spill volumes under 50 barrels due to reliance upon the greater than 50 barrel reporting criteria within the USDOT incident database. The current analysis tends to overemphasize large spills and underreport the small spills, making the assessment conservative.

Based on probabilities generated from the study, the estimated occurrence intervals for a spill of 50 barrels or less occurring anywhere along the entire pipeline system is once every 65 years, a spill between 50 and 1,000 barrels might occur once in 12 years; a spill of 1,000 and 10,000 barrels might occur once in 39 years; and a spill containing more than 10,000 barrels might occur once in 50 years. Applying these statistics to a 1-mile section, the chances of a larger spill (greater than 10,000 barrels) would be less than once every 67,000 years [ENSR Corporation for TransCanada, "Pipeline Risk Assessment and Environmental Consequence Analysis," Document No. 10623-004, June 2006].

In other words (Canadian readers will appreciate this), two spills in one year means we are ahead by a century.

Now, if only our local media weren't behind by a century. If I were a paid journalist, I'd find two reported oil leaks before the pipeline became fully operational a significant story. But still no word from the mainstream media....

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Bonus: Here's a reminder from WEB Water Development's June 2007 filing with the PUC on the environmental threat posed by the Keystone pipeline:

The TransCanada-Keystone Oil Pipeline plan calls for a wide separation between mainline automated valves and manual valves. For example, the distance between the pump station at the North Dakota-South Dakota state line and the next pumping station near Ferney, SD is about 42 miles of 30 inch pipe which would hold about 156,660,000 gallons of crude-oil (3,728,571 barrels). The distance between the Fernery pump station and the next pump station near Carpenter, SD is about 47 miles of 30 inch pipe which would hold about 175,312,000 gallons of crude oil (4,174,000 barrels). In addition to the 4 automated valves at compressor pump stations, the TransCanada-Keystone Pipeline will have 7 to 10 manually operated valves on the 220 miles of pipeline in South Dakota, with some valves being 20 to 30 miles apart. In the event of a major pipe failure, there may not be time to reach valves to stop the crude-oil from draining out of the pipeline on to productive farm land and into wetlands. Manually operated valves won’t do much good if the TransCanada operations staff are hundreds of miles away in Alberta or Omaha. A pipe failure at a low elevation point on either the 42 mile reach between North Dakota and Ferney, SD or the 47 mile reach between Ferney and Carpenter, SD could result in a spill of millions of gallons of crude oil. By way of comparison, the 155 mile WEB water mainline has 31 manual isolation valves, with each valve located every 5 miles, and six pump stations and control points which are monitored and operated by a computerized SCADA system and operations staff dispatched out of Aberdeen, South Dakota.

Welspun Spins, Ignores Facts about Defective Steel in Pipelines

Welspun Corp Ltd., the company that produced 47% of the steel for TransCanada's Keystone pipeline and plans to supply Keystone XL as well, has responded to news that federal investigators found hundreds of instances of defects in steel provided to other pipelines. The Indian steelmaker's response is classic corporate obfuscation and refusal to take responsibility for failure.

Michael Cowden of AMM.com (American Metal Market) has a number of articles on the topic. One article, "Welspun Hammers Plains Justice for 'Faulty Facts' and Alleged Bias," offers Welspun's response to the bad news:

1. Plains Justice is biased and just wants to stop the Keystone XL pipeline.
2. Welspun has cooperated with federal investigators.
3. The PHMSA has come to Welspun's Little Rock mill thrice this year and found compliance with all regulations.
4. Welspun is proud to be TransCanada's partner in Keystone XL.
5. Welspun calls itself the "world leader in pipe manufacturing," insists it "maintains the highest standards in the industry," has "state-of-the-art facilities, rigorous quality controls" and "well-trained and experienced operators and engineers," and "succeeds because we believe safety should always be the number one priority."

Well-spun indeed. Did you notice that not one line of that response refutes the facts laid out by Plains Justice? Did you notice how Welspun tries to distract us from the facts Plains Justice found by accusing Plains Justice of bias? Contrary to Welspun's wishful press, Plains Justice didn't just make up some ugly public relations campaign. Plains Justice scrutinized 3710 pages of federal documents to support its conclusions.

Welspun also devotes ink to saying how wonderful the upcoming Keystone XL pipeline will be. The Plains Justice letter to the PHMSA mentions Keystone XL, but the requests to PHMSA are all about investigating and publishing information about the already constructed Keystone pipeline to ensure TransCanada hasn't already laid any BP-waiting-to-happen pipeline under the South Dakota prairie (or elsewhere).

So let's review: Welspun made a lot of bad steel between 2007 and 2009. Federal inspectors verified hundreds of defects in steel delivered to other pipelines, some of whose owners are now suing Welspun. Almost half of the now-operational Keystone pipeline is made of Welspun steel. The bosses in Gujarat may not be worried, but those of us who get our water from the aquifers Keystone crosses would like just a little more assurance that TransCanada's steel really was well-spun... or at least better spun than Welspun's red herring PR.

TransCanada: Don't Worry, We're Testing Our Own Pipeline

The South Dakota corporate media continue to shrug at the Welspun-TransCanada story. Over a week has passed since Plains Justice alerted us the possibility that the now operational Keystone pipeline may contain defective steel from Indian pipemaker Welspun Corp Ltd. and called for inspections of the Keystone line before it goes all BP on the prairie. No one in the local mainstream press—not KELO, not the Rapid City Journal, not that Sioux Falls paper, not even hard-working journalist Bob Mercer—has found a moment to address this possible threat to our environment and our economy. The only professional peep I've heard from the South Dakota press was in this KJAM report.

The St. Louis Post-Dispatch is on the story. The Keystone pipeline runs just north of St. Louis to the big ConocoPhilips Wood River, Illinois, refinery where TransCanada opened the Keystone taps last week. Reporter Phillip O'Connor learns that TransCanada hasn't had time to review the Plains Justice report (although O'Connor found time to do so before filing his story):

TransCanada officials said they had not reviewed the Plains Justice report but offered assurances the pipeline was safe. They noted that TransCanada's contracts with mills outline specifications above industry standards, and the company reviews manufacturing processes and quality control tests conducted by the suppliers. In addition, the company performs its own quality assurance checks after manufacturing.

"Our pipeline has been fully tested, and it is safe," spokesman Terry Cunha said [Phillip O'Connor, "Group Fears Leaks in New Oil Pipeline," St. Louis Post-Dispatch, 2010.07.03].

I don't think TransCanada gets it. Kinder Morgan had pretty specific contracts with Welspun, too, telling them the standards the steel for their pipelines needed to meet. Kinder Morgan has quality assurance measures. Kinder Morgan still got defective steel that federal inspectors documented in their pipelines. Kinder Morgan is now suing Welspun.

If the Keystone pipeline were a Toyota, we'd be pulling it off the road for a recall inspection. And our local media would be all over the story.

TransCanada does assure us that they're already conducting the tests Plains Justice is asking for:

TransCanada officials said they already are conducting the tests that Plains Justice is requesting at the directive of federal pipeline safety officials. The company has tested about 40 percent of the line and expects to complete the work by the end of August.

No anomalies have been found, said Jesse Bajnok, a Keystone project engineer. The pipeline is not yet operating at full capacity and will continue to operate well below maximum pressure until all testing is completed, Bajnok said [Phillips, 2010].

I certainly hope TransCanada finds the pipeline is solid... and I certainly hope we'll have available some sort of independent confirmation from federal inspectors. One local official in St. Charles County expresses his concern that a Keystone rupture along the Missouri or Mississippi River could be worse than the BP Gulf spill in terms if immediate effect on surrounding states.

I'd like to believe that TransCanada is as interested in preventing a pipeline blowout as we neighbors of the pipeline are. A Keystone leak would be as bad for TransCanada economically as it would be for Missouri or South Dakota environmentally.

But just two months ago, TransCanada gave Welspun an award for all the fine work Welspun did for them in 2008 and 2009. This just one year after federal regulators issued an advisory warning operators of Welspun's defective steel. Can TransCanada really be so blind to the shoddy performance of a business partner?

Welspun Corp Ltd. responded to TransCanada's praise thus:

"We sincerely thank our customers and partners for the confidence they have shown in our company and products," said Lauri Malkki, CEO of Welspun Corp Ltd. "We have demonstrated how Welspun can cooperatively serve its customers by supplying products from multiple sources with quality and capabilities unmatched in the industry. We are committed to building on this success and expanding our business in and around North America" [no author cited, "Welspun Will Increase Little Rock Employment by 230 Jobs," Magnolia (Arkansas) Reporter, 2010.05.03].

Right... that's why your customers are suing you over bad steel.

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Related: Rep. Henry Waxman of California is urging the State Department to deny TransCanada a permit to build its Keystone XL pipeline.

Also related: In a July 2 letter to the State Department urging the same rejection of Keystone XL, Plains Justice and 12 other public-interest organizations document four pipeline spills on U.S. soil in just the first six months of this year. The letter proceeds to address serious flaws in the Keystone XL environmental impact review and highlight the threat posed by the proposed pipeline to the Nebraska Sand Hills and other sensitive ecosystems.

Gurgle Gurgle: TransCanada Opens Keystone Pipeline

Keep your duct tape handy: TransCanada's Keystone pipeline, which may contain defective steel, is now fully operational. Outgoing CEO Hal Kvisle opened the taps in Wood River, Illinois, this week, sending 435,000 barrels of tar sands oil coursing beneath the South Dakota prairie every day. Incoming CEO Russ Girling says don't worry, be happy:

“This project is entirely logical. … We're moving the world’s largest and most secure source of crude oil to a nation that needs that crude oil, and what we’re backing out is crude oil from places like Venezuela.... Is there risk in this? There always is. But I think the facts would dictate that those environmental concerns are unfounded. That they’re not based on truth” [Russ Girling, quoted by Nathan Vanderklippe, "TransCanada's Keystone Opens U.S. Taps," CTV.ca, 2010.07.01].

Sure, Russ. There's no truth to Syncrude's conviction last month for killing three times as many ducks with its tar sands tailings ponds as it originally admitted. There's no truth to John Podesta's assessment that the tar sands you're shipping are "polluting, destructive, expensive, and energy intensive." There's no truth to claims that a leak from your pipeline could seriously damage the Ogallala aquifer. There is no truth to news that your environmentally unfriendly project is over budget and losing partners. And there's no truth to reports that 47% of the steel you used in the pipeline you opened this week came from Welspun, an Indian steel company being sued by three other pipeline companies for delivering steel containing hundreds of defects verified by the PHMSA. It's all just lies, damned lies, fabricated by one hippie blogger who thinks he can get along riding his bike in South Dakota in December. (Actually....)

When oil company CEOs use the word truth, respond with snickers.

Welspun Faces Lawsuits, Has Strong 2009 Profits to Cover Costs

...and South Dakota money goes to Iran after all?

We wait for the mainstream media to pick up the story about the possibility that TransCanada built the Keystone pipeline with defective Indian steel. We also wait for someone to connect the dots and ask why a few sticky gas pedals provoke a recall of over five million Toyotas, but hundreds of faulty pipe joints don't trigger a recall of steel posing an ecological threat to South Dakota's farmland, wetlands, and drinking water.

Meanwhile, here are a few notes on Welspun, the maker of the faulty steel that might lie under the South Dakota prairie in the Keystone pipeline:

1. Indian pipe maker Welspun (I'm waiting for plays on that name) faces three lawsuits from U.S. pipeline companies accusing the company of supplying substandard steel. The litigants include Kinder Morgan, in whose pipelines federal safety regulators found defective Welspun steel, as documented by Plains Justice.
2. I'm not a professional finance reporter, so it'll take me a while to figure out which division is which, but Welspun Corp Ltd. is down 4.6% from its Monday close. Welspun-Gujarat Stahl Rohren Ltd. is down 4.7%.
3. Ah! Welspun Corp Ltd. is Welspun-Gujarat Stahl Rohren. The company changed its name from the latter to the former this spring, taking three months of brainstorming and consultations to come up with the shorter name and a new logo. (Note: stahl rohren is German for "steel pipe".)
4. Shipping bad pipe didn't hurt Welspun's business in 2009: Welspun increased revenue 28% and more than doubled operating profit.
5. Welspun is acquiring majority stake in Saudi pipe maker Aziz. Dang: Even if we use Canadian oil, we're still depending on Saudi pipe.
6. Welspun does business in Iran. TransCanada bought 47% of the steel for the Keystone pipeline from Welspun. This year's South Dakota State Legislature protected a huge tax break for TransCanada. At the same time, the Legislature passed a law to oppose investing state funds in Iran. Connect the dots....

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Update 2010.07.02: The mainstream media speak! KJAM covers the concerns over Welspun steel pipe.

Welspun Supplies Defective Steel to Six Pipelines: Plains Justice Seeks Keystone Investigation

"Made in India": photo taken September 3, 2009, of Welspun pipe laid in Miner County farmland as part of TransCanada Keystone pipeline in South Dakota

Want to avoid BP on the prairie? Then you might want TransCanada to suck the oil back out of the Keystone pipeline and check for defective steel.

Plains Justice has documented a pattern of defective steel used in the pipeline construction boom from 2007 to 2009. Much of the defective steel found in six Kinder Morgan and Boardwalk pipelines was produced by India's Welspun, which also supplied 47% of the steel for the Keystone pipeline, which TransCanada laid across eastern South Dakota last summer.

The 3710 pages of federal safety documents obtained by Plains Justice through Freedom of Information Act requests find several instances of defective steel rushed into production and installation during the same time period as the building of the Keystone pipeline. The documents from the Pipeline and Hazardous Materials Safety Administration include no evidence of defects in the Keystone pipeline... but they also include no evidence that the PHMSA conducted any investigation of the materials that went into the Keystone pipeline.

Plains Justice reports they have since received phone calls (but no documentation) from the PHMSA assuring them that the agency will require TransCanada to conduct a

Someone remind me: how many sticky gas pedals did we have to find before Toyota recalled 5.3 million cars?

high resolution deformation scan of the already buried Keystone pipeline and a high resolution deformation tool run of the planned Keystone XL pipeline that will cross West River.

Now recall, TransCanada already got permission to use thinner than normal steel on Keystone and wants to do the same on Keystone XL. Thinner steel means they've already sacrificed some safety margin that might have mitigated danger from flawed steel.

Plains Justice is alarmed, as ought be every South Dakota landowner with possibly untested and defective Indian pipe running under their land ready to spring an oily leak. In a June 28 letter to the PHMSA, Plains Justice requests that the feds require TransCanada to conduct an in-line inspection before starting regular operations and publicize the results. Among other things, Plains Justice also recommends TransCanada take the prudent step of reducing the operating pressures in the Keystone pipeline and documenting the source of all steel used in Keystone's construction.

Just in case you don't want to read the 3710 pages of federal safety documents yourself, Plains Justice boils them down to a 17-page report on the use of substandard steel in U.S. pipelines.

For the sake of farmers like Mike and Sue Sibson, not to mention our wetlands and drinking water, let's hope that Plains Justice is wrong and that TransCanada just happened to get all of Welspun's good steel.