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America has built the equivalent of 10 Keystone pipelines since 2010 — and nobody said anything

Financial Post

November 3, 2015

by Yadullah Hussain

By last year, the U.S. had built 12,000 miles of pipe since 2010.

BloombergBy last year, the U.S. had built 12,000 miles of pipe since 2010.

While TransCanada Corp. has been cooling its heels on its Keystone XL proposal for the past six years, the oil pipeline business has been booming in the United States.

Crude oil pipeline mileage rose 9.1 per cent last year alone to reach 66,649 miles, according to data from the Washington, D.C.-based Association of Oil Pipe Lines (AOPL)  set to be released soon.

Between 2009 and 2013, more than 8,000 miles of oil transmission pipelines have been built in the past five years in the U.S., AOPL spokesperson John Stoody said, compared to the 875 miles TransCanada wants to lay in the states of Montana, South Dakota and Nebraska for its 830,000-bpd project. By last year, the U.S. had built 12,000 miles of pipe since 2010.

“That’s the point we make,” Stoody said. “While people have been debating Keystone in the U.S. we have actually built the equivalent of 10 Keystones. And no one’s complained or said anything.”

On Monday, TransCanada asked the U.S. State Department to suspend review of its controversial Alberta-to-Nebraska pipeline in the latest episode of a six-year drama that has seen as many as five environmental reviews, numerous legal challenges and a rejection in 2012 by President Barack Obama.

Despite TransCanada’s request for a pause, the U.S. President still rejected the project. He announced on Friday that he would not approve the Keystone application, saying the project did not serve the nation’s interests.

The 487-mile southern leg of the project, dubbed the Gulf Coast project, between Cushing, Okla. and Texas refineries came on stream in 2014.

While the northern leg of Keystone XL remains under review, the Lower 48s have seen new oil pipes crisscrossing the country.

“If you look at 2010 versus now we have seen historic realignment that has transformed the infrastructure situation,” said Afolabi Ogunnaike, analyst at Wood Mackenzie. “There has been tremendous investment in pipelines and more investments are coming on.”

The U.S. midstream infrastructure is responding to a near-doubling of U.S. production over the past six years. The U.S. saw an 11.6 per cent increase in crude oil transport via pipelines in 2014, according to AOPL data.

FP1104-Keystone_pipeline_web

But as U.S. oil production eases in response to lower crude prices, the rapid build-up could see pipeline capacity exceed production in the Bakken in North Dakota and even the Permian basin straddling Texas and New Mexico, Ogunnaike estimates.

“The low oil price environment is allowing the crude oil logistics to catch up to supply,” he said.

Armed with shipping commitments despite low crude prices, key pipeline operators are proceeding with many projects to alleviate the bottlenecks, which could add as much as 8.7 million barrels per day by 2018, Reuters data shows.

Last week, Houston-based pipeline company Enterprise Product Partners said it would have US$7.8 billion of major capital projects ready by the end of 2017. Tulsa, Okla.-based shipper Magellan Midstream Partners raised its capital expenditure by US$200 million to US$1.6 billion in its earnings announcement Tuesday. TransCanada has reported higher volumes on the Keystone Pipeline System in its third-quarter earnings, while Enbridge Inc. is also looking to expand its presence in the Gulf Coast.

Much of the opposition in the U.S. has focused on crude rail terminals, especially in California and Oregon, which has led to delays on some rail projects. In many states, pipeline is viewed more favourably than the sight of crude-bearing rail cars barreling down town centres.

“There is some local opposition, but we don’t have local or inter-state projects that are attracting the same level of scrutiny as Keystone XL seems to have. Keystone XL is an international issue,” Ogunnaike says.

But for many the fight against Keystone XL pipeline remains a high priority in a larger battle to combat climate change.

“I have always opposed Keystone XL,” tweeted Democrat presidential hopeful Bernie Sanders on Monday. “It isn’t a distraction — it’s a fundamental litmus test of your commitment to battle climate change.”

But the opposition has done little to stop the surge of Alberta crude flowing through the U.S. pipeline systems: Canadian crude oil exports to the U.S. soared to 3.4 million barrels per day in August – a new record.

One Comment

  • Stephanois on Nov 08, 2015

    Does anyone else think it’s weird that this got cross-posted from Financial Post with no effort to respond to criticisms from tribal members?

    I think our standards should be above taking right-wing propaganda and re-branding it as an edgy criticism of NGOs.

    Here is the original article:
    http://business.financialpost.com/…/america-has-built…

    And here is the excellent response from Gary Dorr, a Nez Perce tribal member who works with the Rosebud Sioux : “Try doing a little bit more background work next time. There are not the equivalent of 10 Keystone pipelines that have been built. Where else do you see 36-inch pipes under 1,600 PSI? There are equivalent MILES of pipe that can be compared but not the size of the pipeline. There are also no other pipes of this size being built over the Oglalla aquifer and the Fort Laramie Treaty Territory of 1868. “Nobody” (in the title) is a blanket generalization that you intend for people to take seriously. Like I said, do your background or you’ll “always” come across as unbelievable. There have been people protesting all along different pipe routes who don’t get the time of day from some obviously lazy media sources. Nice try, but not today Yadullah, not today.”

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