TransCanada says Exxon spill no threat to XL line

Tue Jul 5, 2011 3:07pm EDT

Related Topics

* Montana oil spill focuses attention on Keystone XL

* Company says takes steps to ensure river safety

* NRDC says XL a threat to Yellowstone River

By Scott Haggett

CALGARY, Alberta, July 5 (Reuters) - TransCanada Corp (TRP.TO) said on Tuesday that Exxon Mobil's (XOM.N) 1,000-barrel oil spill into the Yellowstone River will not derail its plans to build the Keystone XL pipeline, but environmentalists promised renewed pressure to block approval.

TransCanada is awaiting State Department approval to build the $7 billion Keystone XL line, which would carry 700,000 barrels per day of crude oil to the gulf coast refining hub. A final decision on the company's application is expected by year end.

"Any time something like (the Exxon spill) happens it brings more attention to the pipeline industry," said Terry Cunha, a spokesman for TransCanada. "But we'll continue to move along with the process ... and address any issues the Department of State may have as we move forward."

Environmental groups, some legislators and landowners along the line's planned route are pressing the Obama Administration to deny TransCanada's application, spurred by worries about the line's safety following BP's Gulf of Mexico oil spill, the 20,000 barrel spill from an Enbridge Inc (ENB.TO) pipeline in Michigan and well-publicized leaks from TransCanada's existing Keystone system.

The Saturday spill from an Exxon line under the rain-swollen Yellowstone River gives the line's opponents another argument against approving Keystone XL, since TransCanada also plans to run the line underneath the river.

"The Yellowstone is one of our last truly wild rivers," said Susan Casey-Lefkowitz, director of the international program at the Natural Resources Defense Council.

"Putting it at risk with an even-more corrosive and liable to spill or leak pipeline like the Keystone XL tar sands pipeline is something that both Montana and the federal government are going to be taking a hard look at, I think."

TransCanada disputes claims that crude from Alberta's oil sands is more corrosive than any other type of oil. It also says that the line will be buried well under the Yellowstone river, use thicker steel and operate at lower-than-allowed pressures.

"The pipeline would be a minimum of 25 feet below the riverbed," Cunha said. "Additionally, entry and exit points for the crossing would be extended away from the banks for the river. Thus, any risk of scour or erosion exposing the pipe is mitigated."

A number of pipelines already carry Canadian oil across the the Yellowstone, including Kinder Morgan Energy Partners' (KMP.N) 280,000 bpd Express Pipeline and the Western Corridor pipeline system operated by Plains All American Pipeline LP (PAA.N) which can ship as much as 33,900 bpd. Those lines carry crude to refineries in the U.S. Midwest and Rocky Mountain regions. (Editing by Jeffrey Hodgson)

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