TransCanada’s proposed Keystone XL Pipeline will be the safest crude oil pipeline built in America, officials of the Calgary-based company told reporters Tuesday during a stop in Billings.
Visiting in the wake of a July 1 leak in ExxonMobil’s Silvertip Pipeline that poured 1,200 barrels of oil into the Yellowstone River near Laurel, TransCanada officials were seeking to reassure Montanans about the safety of the much larger pipeline they hope to build across 284 miles of Eastern Montana in 2012 and 2013.
“We really do believe comparisons are entirely inappropriate,” said Alex Pourbaix, president of TransCanada’s energy and oil pipeline division.
Keystone XL, designed to carry heavy crude from Alberta tar sands to refineries on the Texas Gulf Coast, will cross the Milk, Missouri and Yellowstone rivers on its route through Montana. Hundreds of smaller creeks and seasonal streams also are in its path. Pipe will be buried 5 feet below the bed of those lesser waterways.
Engineer Les Cherwenuk, director of the Keystone XL project, explained that the company plans to use horizontal directional drilling to bore 25 feet under the three major rivers and install heavy-walled pipe at the crossings.
Valves that can shut down the pipeline at the first hint of a problem will be built on both sides of the crossing, he continued. Pressure in the pipeline will be “very significantly” lower at the crossings than at other points along the high-pressure line, Pourbaix said.
The project will be monitored electronically 24/7 and inspection flights are planned every two weeks, Cherwenuk said.
Before construction on the pipeline can proceed, TransCanada must obtain a presidential permit through the U.S. State Department. The State Department last year presented a draft environmental impact statement that was deemed inadequate by the EPA. A supplemental draft EIS was completed in April, which the EPA also found wanting. A final draft of the EIS is due by the end of the month.
Pourbaix said the State Department has acknowledged that the pipeline is necessary and that TransCanada has exceeded regulatory standards to ensure the safety of Keystone XL. He said he strongly doubts the State Department will change its views in the final draft. The company is looking for final approval by the end of the year. It is ready to begin construction within weeks of a permit being issued.
But the proposed $7 billion project is not without critics, who protest that environmental consequences could be catastrophic. While the pipeline has generated some concern in Montana, it is most controversial in Nebraska, where opponents say the pipeline route would endanger the Ogallala Aquifer. The New York Times has even editorialized that the pipeline is unnecessary.
Robert Jones, vice president of TransCanada’s Energy and Pipeline Division, countered that pipelines “are the safest and most environmentally conscious way of transporting crude oil. It’s safer than trucks, rail or tankers.”
He said there are already hundreds of thousands of pipelines moving oil safely every day.
“A very high degree of safety” has been engineered into the project, said Cherwenuk. The company has been subjected to “regulated standards that have never been required of any operation constructing a new liquid pipeline,” he said.
The 36-inch pipeline will be built of specially constituted steel that is resistant to puncture. It will be coated inside and out with a corrosion-resistant shell. Three systems, including remote electronic monitoring, have been designed into the project, he said. The pipeline will be buried 4 feet deep, which is deeper than most existing pipeline.
There will be “minor” environmental disruption, company officials acknowledge. But they stressed that the disruptions are far outweighed by security and economic factors.
Cherwenuk said the pipeline will generate an estimated $421 million in new spending in Montana during construction and development phases and 1,200 jobs.
Those jobs will go to a combination of in-state workers and experienced workers brought in from elsewhere, said Terry Cunha, a spokesman for TransCanada.
“We’ll try to hire as many qualified local people as possible,” he said.
It will also generate annual property taxes estimated at $62 million as it passes through Phillips, Valley, McCone, Dawson, Prairie and Fallon counties.
A $100 million on-ramp from the Bakken oil fields in North Dakota and Montana could open opportunities in both states, Pourbaix said. The on-ramp linking them to Keystone XL could carry 65,000 barrels of oil a day to market.
What the debate comes down to, Pourbaix said, is the issue of a secure oil supply for the nation. He said about 15 million barrels of oil are consumed each day in the United States and the country produces only 4 million or 5 million barrels. The rest is imported.
“It comes down to: where do you want to get your oil from?” he said.
Keystone XL could reduce U.S. dependence on oil from more volatile and less friendly areas in the Mideast and Venezuela by 40 percent, Pourbaix said.