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Two views of US national interest State Department issues permit for pipeline from Alberta oil sands, citing ‘strategic’ interests; environmentalists file challenges Gary Park For Petroleum News
The ingredients are there for what could be one of the pivotal test cases involving the future of exports from the Alberta oil sands to the United States.
No sooner had the U.S. State Department issued a presidential permit on Aug. 20 for the Enbridge-backed C$3.7 billion Alberta Clipper pipeline than various U.S. and Canadian environmental and Native American groups mounted court challenges to block the pipeline, which is due to come on stream by mid-2010 at 450,000 barrels per day.
They oppose the development of the Canadian oil sands and the transportation of crude derived from the resource to the U.S. because of the volumes of greenhouse gas emissions associated with the extraction and processing of raw bitumen.
They argue that the Alberta Clipper project contradicts President Barack Obama’s pledge to reduce U.S. reliance on imported crude and invest in clean, sustainable energy sources.
The 1,000-mile pipeline from Hardisty, Alberta, to Superior, Wis. (310 miles across U.S. territory), is designed to eventually carry 800,000 bpd through a 36-inch-diameter line.
Strategic interests In issuing its ruling, the State Department said it found that “the addition of crude oil pipeline capacity between Canada and the United States will advance a number of strategic interests of the United States.”
“These include increasing the diversity of available supplies among the United States’ worldwide crude oil sources in a time of considerable political tension in other major oil producing countries and regions; shortening the transportation pathway for crude oil supplies; and increasing crude oil supplies from a major non-Organization of Petroleum Exporting Countries producer.”
The State Department described Canada as a “stable and reliable” trading partner and noted that the Canada-U.S. free trade agreements “augment the security of this energy supply.”
It also said construction of the line would create about 3,000 jobs in the U.S. during a difficult economic period.
The department has the power to handle applications for the construction, connection, operation and maintenance of facilities at the U.S. borders and to issue permits for such facilities once it decided they are in the U.S. national interest.
On the issue of GHGs, the State Department said that matter would be better handled through the domestic environmental policies of the U.S. and Canada and through international agreements.
It said the approval “sends a positive economic signal, in a difficult economic period, about the future reliability and availability of a portion of the United States’ energy imports. …”
A spokeswoman for Enbridge said the State Department permit allows the company to start mobilizing construction workers and obtain final Army Corps of Engineers’ permits where portions of the pipeline cross wetlands and waters.
GHG levels Environmental leaders said the department should have displayed greater concern about rising GHG levels from the oil sands, as well as the impact of oil sands development on northern Alberta’s boreal forest.
Sarah Burt, an attorney at Earthjustice, acting for three organizations, said Alberta Clipper will cause increased air pollution, a large amount of water pollution and extra GHGs because more energy is used in converting bitumen into refined, usable petroleum products.
She said the coalition will file a lawsuit in the Northern District of California asking that the department consider the cumulative environmental impact of building new pipelines from the oil sands, while seeking a motion to prevent Enbridge from starting construction pending a court ruling.
“The State Department didn’t look at all the impacts of refining tar sands crude, or the life cycle of greenhouse gas emissions associated with increased use of tar sands crude,” Burt said.
The coalition argued that oil sands development is creating an “environmental catastrophe, with toxic tailings ponds so large they can be seen from space and plans to strip away the forests and peat lands in an area the size of Florida.
“In addition, greenhouse gas emissions from tar sands production are three times that of conventional crude oil and it contains 11 times more sulfur and nickel, six times more nitrogen and five times more lead than conventional oil. These toxins are released into the U.S. air and water when crude oil is processed into fuels by refineries.”
Global warming cited Bruce Baizel, an attorney at Earthworks, said “importing dirty tar sands oil is not in our national interest … at a time when concern is growing about the national security threat posed by global warming, it doesn’t make sense to open our gates to one of the dirtiest fuels on earth.”
“This pipeline will lock America into a dirty energy infrastructure for years to come,” he said.
Kevin Reuther, legal director at the Minnesota Center for Environmental Advocacy, said the Alberta Clipper line connects U.S. refiners and consumers with the “dirtiest, most carbon-intensive crude oil on earth. Tar Sands crude is causing massive environmental degradation in Canada.”
In July, Enbridge and wholly owned Enbridge Energy Partners, which is constructing the Canadian segment, concluded a joint funding agreement under which Enbridge will effectively fund two-thirds of the U.S. segment.
Under the terms, Enbridge will participate in the debt financing that Enbridge Energy Partners raises for the project and cover two-thirds of the equity requirements.
Enbridge Chief Executive Officer Pat Daniel said the arrangement should result in lower tolls because Enbridge Energy Partners’ cost of financing the debt component should be reduced.
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