PIPELINE
Potential piping project opens debate
Jennifer Johnson
Orange County Editor
A proposed pipeline funneling what skeptics call "dirty oil" into Southeast Texas from the tar sand mines of Canada has drawn criticism from some Beaumont/Port Arthur residents, the local branch of the Sierra Club and the Texas office of Public Citizen, but officials working with the unconventional crude say the majority of what is being said is hyperbole at best.
Speculation and rhetoric concerning the safety of transporting the unrefined material to the region and subsequent refining and use of those refined products as an energy source has spawned a backlash against the synthesized crude, raising questions in some circles about whether it is even desirable to utilize the resource. However, further information obtained about the project reveals that oil mined from the tar sands of Canada is already in use in the United States and abroad, including right here in Southeast Texas. Still, the push to move away from fossil fuels entirely in favor of what are seen as more earth-friendly alternatives is attracting more support.
The project up for approval involves constructing a pipeline that, when connected to a line already in place for portions of the country, will allow for transport of Canadian tar sands oil and bitumen, a compound also refined into synthetic crude oil. The proposed extended line, known as the Keystone XL Pipeline, will have an endpoint in Nederland to allow for transport to local refineries. Once at local plants, the tar sands oil and bitumen are refined for commercial use and shipped to distributors.
Tar sand mines
Opponents of the project cite many problems with utilizing tar sands oil and bitumen, beginning with the point of origin.
"I cannot acquiesce to the rape of the environment," Bruce Drury of the Big Thicket Association said during an informational meeting held at the American Legion Hall in Beaumont on May 17. "I have concerns of great significance and ... am generally concerned."
Don Thompson, president of the Oil Sands Developer Group representing 27 tar sand mining companies in Canada, said those concerns, while altruistic, are not founded in reality.
"This industry is one of the most heavily monitored in Canada," Thompson said in a phone interview. "Under Canadian law, every bit of land used must be reclaimed. While it is true that issues do exist, we, under strict scrutiny, make sure those issues are well-monitored and well-maintained."
Will Gibson, a representative of Syncrude Canada Ltd., one of the larger companies in the Oil Sands Developer Group, said his company consistently "stay(s) within regulated limits environmentally." According to Gibson, the air quality for the area of the mine has maintained a level of "excellent" and rates far above that of nearby metropolitan areas. Additionally, he said plans are in the works for a $1.6 billion upgrade to the facility that is expected to reduce sulfur dioxide (SO2) emissions at the point of origin somewhere in the neighborhood of 60 percent, even with the two-fold expanded amount of product that will be shipped in coming years.
Syncrude is not without reproach, however, as the company is currently in a legal battle with the Canadian government over the 2008 death of a "large number of waterfowl." Lawyers entered pleas to the charges under Section 5.1 of the Migratory Birds Convention Act and Section 155 under the Alberta Environmental Protection and Enhancement Act in 2009 and a provincial court trial was scheduled to begin March 1 of this year in St. Albert.
"After closely reviewing the charges and all of the evidence at our disposal, we have made the decision to plead not guilty to the charges laid," said Syncrude president and CEO Tom Katinas during the 2009 pleading.
Keystone XL Pipeline
TransCanada Corporation, with the approval of the National Energy Board (NEB), has permission to construct and operate the Canadian portion of the Keystone Gulf Coast Expansion Project. The NEB stated in its release that it found "the proposed pipeline to be in the public interest and accepted that the project would connect a large, long term and strategic market for Western Canadian crude oil with the U.S. Gulf Coast in a manner that would bring economic and other benefits to Canadians."
"We are pleased the National Energy Board has approved our Keystone expansion. This is another significant milestone in advancing the project," said Hal Kvisle, TransCanada president and chief executive officer in a release from the agency. "Keystone will be the first pipeline to directly connect a growing and reliable supply of Canadian crude oil to the largest refining market in North America. Our shippers have committed crude oil that amounts to 75 percent of the expansion capacity for an average term of 17 years reflecting the value the project has to the overall market."
When completed, the expansion will increase the capacity of the Keystone Pipeline System from 590,000 barrels per day to about 1.1 million barrels per day, according to TransCanada estimates.
The Keystone expansion is a 1,980-mile, 36-inch crude oil pipeline stretching from Hardisty, Alberta, to the southeast through Saskatchewan, Montana, South Dakota and Nebraska. There it will link up with a portion of the Keystone Pipeline that will be built through Kansas to Cushing, Okla. The pipeline will then continue on through Oklahoma to a delivery point near existing terminals in Nederland to serve the Port Arthur marketplace.
Applications for U.S. regulatory approvals are proceeding and decisions are anticipated during the fourth quarter of 2010. Construction would then begin in the first quarter of 2011, with deliveries of crude oil to the U.S. Gulf Coast expected to commence in the first quarter of 2013.
Ryan Rittenhouse of Public Citizen said the nearly 2,000 miles of pipeline is just asking for a catastrophe to occur.
"It is not a question of if, but when," he warned. Potential ruptures and explosions in the line, he said, "cause a lot of concern for this project."
John Jacobi from the U.S. Department of Transportation (DOT) said his position in the equation is to ensure Rittenhouse's fears never come to fruition.
"To us at DOT, safe means that what's in the pipe stays in the pipe," Jacobi offered. "Things rarely go wrong when they are installed properly."
According to the DOT employee, his opinion is that shipping the tar sands crude through pipelines is "just as safe, if not safer" than other methods of transport already being utilized by the oil companies.
Welcome to Southeast Texas
According to Elizabeth Orlando, Foreign Affairs Officer Multilateral Team of the U.S. Department of State Bureau of Oceans International Environmental and Scientific Affairs, local refineries are already processing tar sand crude. Additionally, according to numbers available to her office, about 16 percent of the crude already in use in the U.S. is derived from the Canadian compound - and has been in use for more than 30 years.
Agencies and organizations that champion a move from fossil fuels to greener forms of energy stand behind the notion that the tar sands, and the subsequent increased pollutants derived thereof, represent a step backward, not forward.
Concerned citizen Donita Lenden, who spoke against the Keystone XL project at the May 17 public informational meeting, drew applause from other like-minded constituents when she said, "Oil is not the answer. Tar sand oil is definitely not the answer."
That sentiment was echoed in Paul Judice's biting comment: "Bring us the dirtiest possible stuff you can find. We'll take it. We don't need it. Canada doesn't need it."
And while the jury may still be out on what is actually needed and by whom, an article in Canada's Global Energy Reporter on May 19 proclaims "Canada's oil sands will become the largest single source of imported oil to the United States this year and could supply more than a third of America's foreign oil by 2030 under an aggressive growth scenario that would have to overcome labor shortages and environmental concerns."
According to Oil Sands Developer Group president Thompson, Canada is currently the leading exporter of goods to the United States, and second in the exportation of oil only to Saudi Arabia. Figures obtained from American-based energy adviser IHS CERA (Cambridge Energy Research Associates) have Canada poised to overtake the top position in providing crude to the U.S. this year, as researchers "expect oil sands producers to average 1.08 million barrels a day in sales to the U.S."
Thompson's agency estimates Canadian producers will be shipping 4 million barrels per day by 2020. U.S. estimates support that claim and more, further pushing that number up to 5.7 million barrels per day by 2030. About one-third of the shipments will be bound for the U.S.
Attempts to reach local refineries about the proposed tar sands project were unsuccessful, but one industry source said the conversion required for plants to process the Canadian tar sands oil "are not insignificant" and "not a lot of refineries are capable of doing it right now."
TCEQ spokeswoman Andrea Morrow said she is unaware of any pending permits requesting modifications to allow local refineries to process the tar sand crude and bitumen, but even should they apply, only certain levels of emissions will be allowed.
According to Morrow, speculation about air quality contamination is a moot point since current regulations mandate companies adhere to strict emissions limits.
"If they are operating properly, it will not affect air quality," she said. "And if they are not operating properly, we will find them and fine them."
Morrow said the TCEQ does not regulate greenhouse gas emission, carbon dioxide emissions or mobile emissions. Those toxic forms of pollutants fall under federal regulation.
Joe Deshotel Jr., representing the Sierra Club, voiced strong opposition to the project. "We need to get away from this type of backtracking," he said. "To continue to process this dirty oil is like butting heads with the future."
Deshotel and other opponents to the pipeline project offer up a greener scenario that utilizes other forms of energy such as windmills and solar power in lieu of mining tar sands.
Southeast Texans wanting to comment on the project have until June 16 to submit correspondence to the Department of State (DOS) at www.keystonepipeline-xl.state.gov or by mail to Elizabeth Orlando, Keystone XL Project Manager, U.S. Department of State, OES/ENV Room 2657, Washington DC, 20520.
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