Pipeline builder can waive U.S. rule
Canadian company to use thinner steel
By Terry Woster
http://www.argusleader.com/apps/pbcs.dll/article?AID=/20070908/NEWS/7090...
Published: September 8, 2007
PIERRE - A federal agency will allow TransCanada Keystone to design parts of its proposed crude oil pipeline for a stress level higher than current U.S. standards.
The company filed a copy of the approved federal waiver, issued by the federal Pipeline and Hazardous Materials Safety Administration, with the South Dakota Public Utilities Commission as part of the record in its request for a permit in the state.
The waiver "allows Keystone to design, construct and operate two new crude oil pipelines using a design factor and operating stress level of 80 percent of the steel pipe's specified minimum yield strength in rural areas," according to a document signed by Jeffrey Wiese, acting associate director of the agency.
The waiver would allow slightly thinner steel for manufacture of the pipe to reduce construction costs, said Dana Medlin, associate professor of materials and metallurgical engineering at South Dakota School of Mines and Technology.
"A slightly lower safety factor, that's what we're talking about here," Medlin said, "Pipes are a little bit over-designed, anyway."
The special permit "provides some relief from the federal pipeline safety regulations," while at the same time "ensuring that pipeline safety is not compromised," Wiese wrote.
The standard in the U.S. is 72 percent of specified minimum yield strength. Wiese's communication noted that Canadian standards already allow operators to design and operate hazardous liquid pipelines at 80 percent.
It's a first for the federal agency, Wiese noted.
"The Keystone Pipeline project represents the first request by an operator in the United States for approval to design and operate a hazardous liquid (crude oil) pipeline beyond the existing regulatory maximum level," he wrote.
TransCanada, based in Calgary, Alberta, says it has more than 30 years experience in operating pipelines at an 80 percent design factor.
The federal agency included more than 50 conditions for the permit and said the waiver "will provide a level of safety equal to, or greater than, that which would be produced if the pipelines were operated under existing" regulations.
Wiese said the conditions placed on the waiver require the company to inspect and monitor the pipelines more closely than similar lines installed without a special permit.
The higher stress level won't be permitted in pipeline segments that include high population areas, certain waterways, highway, railroad and road crossings or areas of the project with pump stations and mainline valve assemblies.
TransCanada cited cost in its request for a waiver, noting that "allowing Keystone to design its pipeline at pressures up to 80 percent of specified minimum yield strength could also reduce the overall cost of the construction of the Keystone Pipeline."
The general manager of the WEB Water pipeline system says the state should be concerned about the potentially higher stress being allowed for the oil pipeline.
"Pipelines leak," Curt Hohn of Aberdeen said in a recent interview. "If our water line leaks, it's water and things are wet. If an oil pipeline leaks, that's a different matter."
He said in the water utility industry, some types of pipe normally may be operated at no more than 75 percent of design capacity.
"I feel that TransCanada will keep ramping the pressure up in order to move more and more crude oil through the area," Hohn said. He said the proposed pipeline would cross the service areas of seven South Dakota rural water systems.
"TransCanada is confident the Keystone oil pipeline can be safely and reliably operated at the higher design factor in an environmentally responsible manner," wrote Robert Jones, vice president of the company, last November in the request for the waiver.
The company proposes a pipeline to transport 435,000 barrels of crude oil a day from a supply hub near Hardisty, Alberta, to terminals in Wood River and Patoka, Ill. About 220 miles of the proposed line would cross eastern South Dakota.
