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Keystone Pipeline Leaks More Severe Than Anticipated

Oil

The existing Keystone pipeline leaks more often and more oil than TransCanada Corp predicted in communications to regulators and lawmakers during approval hearings, according to a report by Reuters.

The risk assessments, tabulated in 2010 before the facility went online, underestimate the project’s leak rate. Now, TransCanada is on the verge of expanding the pipeline to an XL version, linking Canadian shale to American refineries near the Gulf of Mexico.

So far, Keystone has had three major spills, two in South Dakota totaling 5,400 barrels in leakage and another in North Dakota, totaling 400 barrels. But TransCanada’s pre-construction report said it would leak over 50 barrels at a time “not more than once every seven to 11 years over the entire length of the pipeline in the United States.”

“They testified that this is going to be a state-of-the-art pipeline,” one of South Dakota’s Public Utilities commissioner, Gary Hanson, said. “We want to know the pipeline is going to operate in a fashion that is safe and reliable. So far it’s not going well.”

The state of Nebraska cleared one of the last hurdles for the Keystone XL pipeline earlier this month, potentially ending a decade-long saga over the 1,700-mile pipeline.

The Nebraska Public Service Commission, a five-member regulatory body, voted 3-2 in favor of the project, which would give TransCanada permission to build the pipeline through the state. Nebraska had been the last thorn in Keystone XL’s side after the Trump administration gave the greenlight earlier this year.

But while the approval is a massive victory for TransCanada – the company’s share price surged nearly 2 percent immediately after the announcement – it is still not 100 percent certain that the pipeline will move forward. TransCanada still needs to make a final investment decision on the project, and the oil market is dramatically different than it was a decade ago when the project was initially drawn up.

By Zainab Calcuttawala for Oilprice.com

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