* 91 major leaks seen, not 11 that company estimates
* Assessment needed before US decision on pipe-professor
* TransCanada strongly disagrees with results
By Timothy Gardner
WASHINGTON, July 11 TransCanada Corp (TRP.TO),
a company that hopes to build a $7 billion pipeline to take
crude from Canada's oil sands to Texas, has underestimated the
number and volume of leaks that could occur on the duct and
hurt water supplies, an analysis released on Monday said.
The independent analysis by a water resources engineer at
the University of Nebraska was released by the environmental
group Friends of the Earth, which has helped mount a fierce
campaign hoping to convince the Obama administration to turn
down the pipeline in a decision expected later this year.
In its application to the U.S. government to build the
line, TransCanada has not fully assessed possible spill impacts
of the Keystone XL line, said the analysis, done by John
Stansbury of the University of Nebraska, Lincoln. He did not
receive funding from environmental groups for the study.
The pipe is expected to cross the Ogallala Aquifer, a vast
water resource in the High Plains states relied upon for
irrigation and drinking water, the analysis said.
The U.S. State Department is reviewing the project, which
is bitterly opposed by environmental groups and some
politicians who do not want the massive pipeline to run across
several states or to increase oil sands development in Canada.
"A thorough, adequate assessment of the potential impacts
of leaks from the pipeline has not been done," Stansbury said.
The analysis can be seen here: link.reuters.com/ryb62s
"It should be done before we make any decisions on this
pipeline one way or the other," he said.
DECISION EXPECTED BY YEAR END
TransCanada hopes to get a permit from the State Department
before the end of the year for the line that would bring
500,000 barrels per day of petroleum to refineries along the
Gulf Coast and could be expanded to 700,000 bpd.
Stansbury's analysis, which looked at federal data on the
incidence of spills on similar pipelines, said the duct would
likely average 91 major spills of over 50 barrels, including 12
spills from holes greater than 10 inches (25 cm) over its
50-year lifetime. TransCanada has estimated the line would have
major spills about 11 times.
In addition, many leaks would release more oil than
TransCanada has estimated because it takes more time on average
to detect leaks than the company indicated, the analysis said.
TransCanada strongly disagreed with Stansbury. Spokesman
Terry Cunha said the company based its assessments on the
"industry leading methods to quantify failure frequency."
The leaked oil could flow down rivers including the
Yellowstone, the scene of a recent Exxon Mobil (XOM.N) pipeline
spill, sending benzene and other hazardous chemicals
downstream, Stansbury said.
Water treatment facilities would likely detect the benzene
keeping it from drinking water supplies. But efforts to clean
the water or get fresh water from other sources could be costly
to communities. In addition, some residents near the proposed
line depend on well water, he said.
The pipe has stoked a debate within the Obama
Administration about whether it should be approved. Some
believe the benefits of getting additional crude supply from a
friendly neighbor outweigh the environmental risks, while
others do not.
Last month, the Environmental Protection Agency asked the
State Department for a more extensive review of the pipeline,
in a letter citing two small leaks on an existing Keystone
line. It said the State Department needs to "carefully
consider" both the routes of the planned expansion and what
measures are needed to prevent and detect spills.
Some environmental groups such as the Natural Resource
Defense Council have said petroleum from the oil sands contains
higher levels of corrosive substances such as diluted bitumen
that could cause more leaks than traditional oils.
But TransCanada said oil sands petroleum does not corrode
steel. "Why would we construct a ... pipeline system only to
put something it it to destroy it?" said Cunha.
(Reporting by Timothy Gardner; Editing by Marguerita Choy)