Energy

U.S. report finds multiple problems with Keystone pipeline

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A supply depot servicing the Keystone XL crude oil pipeline lies idle in Oyen, Alberta, Canada February 1, 2021. REUTERS/Todd Korol

WASHINGTON, Aug 23 (Reuters) - A U.S. government watchdog found multiple problems with the construction, manufacture and design of the Keystone pipeline, validating President Joe Biden's decision to revoke the permit for a Keystone XL extension, leaders of several House Democratic committees said on Monday.

The lawmakers requested the Government Accountability Office report in November 2019 after more than 11,000 barrels of oil leaked from the pipeline system in two releases in less than two years.

"GAO found that preventable construction issues contributed to the current Keystone pipeline’s spills more frequently than the industry-wide trends," they said in a statement.

Keystone's four largest spills were "caused by issues related to the original design, manufacturing of the pipe, or construction of the pipeline," the GAO report said.

Biden canceled Keystone XL's permit on his first day in office on Jan. 20, dealing a death blow to a project that would have carried 830,000 barrels per day of heavy oil sands crude from Alberta to Nebraska. L1N2JX1D8

"TC Energy’s record among its peers is one of the worst in terms of volume of oil spilled per mile transported," a statement from the lawmakers said. The lawmakers included Representative Frank Pallone, energy and commerce committee chair.

TC Energy Corp (TRP.TO) officially canceled the $9 billion Keystone XL in June. It filed a notice of intent in July to begin a legacy North American Free Trade Agreement claim and is seeking more than $15 billion in damages from the U.S. government.

The company said in response to the report it has had "zero high-impact incidents in 18 months," after taking measures to strengthen safety and prevent incidents.

Pipeline opponents want to slow the movement of Canadian oil to the United States. But pipeline supporters say it will be shipped anyway and that oil sent by rail has caused numerous fiery accidents.

Biden "was clearly right to question this operator’s ability to construct a safe and resilient pipeline, and we support his decision to put Americans’ health and environment above industry interests,” the U.S. representatives said.

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Reporting by Doina Chiacu and Timothy Gardner; Editing by Barbara Lewis, Dan Grebler and David Gregorio

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