Calgary’s TransCanada Corporation sought to shake off a large spill from and brief closure of its existing Keystone 1 diluted bitumen pipeline in South Dakota, while reassuring investors in a briefing yesterday that it remained optimistic it would complete its much larger proposed Keystone XL line.
“The company is expected to make a final investment decision on the US$8 billion Alberta-Nebraska pipeline by December,” the Financial Post reports, “taking into account commercial support and regulatory approval from the state of Nebraska.”
Customer support—how much demand there really is for the troubled, on-again, off-again pipeline—has been an open question for observers. In an effort to fill an apparently incomplete order book, the company resorted this month to asking Alberta’s taxpayers to chip in, by signing “take-or-pay” contracts for Keystone XL capacity that would have forced the government to find synthetic crude to fill it, or pay TransCanada while the line stood idle.
Yesterday, CEO Russ Girling told investors that “over the last few weeks, discussions with our customers have continued, and we’re very encouraged with the progress.” He said he expected to “conclude sufficient binding shipping commitments to advance the project.”
But Girling’s phrasing strongly implied the company has not yet actually secured enough firm commitments to feel confident about green-lighting the project, killed by the Obama administration and revived by its successor.
TransCanada’s upbeat message was also in contrast with a string of other recent setbacks.
A 5,000-barrel spill near Amherst, South Dakota November 16 resulted in a regulatory order to shut down the 590,000 barrel-per-day Keystone I pipeline, and the possibility that the state might revoke the line’s permit. The line resumed operating at reduced pressure yesterday, JWN Energy reports.
According to CBC news, TransCanada has also asked the Nebraska Public Service Commission to clarify some parts of a decision that gave it permission to build its larger XL line through that state, but on a longer route than the company wished, for which it has not secured all the rights-of-way or permits it needs.
“Company spokesman Terry Cunha says TransCanada is not asking for the approved route to be reconsidered,” CBC writes, but he would not identify what aspects of the decision the company wishes addressed.
Meanwhile, Reuters reported that its own review of TransCanada’s previous regulatory filings showed the existing Keystone pipeline “has leaked substantially more oil, and more often, in the United States than indicated in risk assessments the company provided to regulators before the project began operating in 2010.”
Before building the pipeline, TransCanada assured regulators that a leak of more than 50 barrels would occur “not more than once every seven to 11 years over the entire length of the pipeline in the United States.” In fact, the line has had three “significant leaks in the United States” in its seven years of operation, all several multiples of 50 barrels.
