Tag Archives: Pipeline transport

Oil spill, Pipeline transport

Disastrous oil spill in Santa Barbara CA shows pipeline risk

Repost from the San Francisco Chronicle (SFGate.com)

Oil spill spreads near Santa Barbara; could happen in Bay Area

By Peter Fimrite, Wednesday, May 20, 2015 9:21 pm
The oil sheen and oil-soaked kelp befoul the ocean off the Southern California coast as cleanup continues. Photo: Brian Van Der Brug / McClatchy-Tribune News Service / Los Angeles Times
The oil sheen and oil-soaked kelp befoul the ocean off the Southern California coast as cleanup continues. Photo: Brian Van Der Brug / McClatchy-Tribune News Service / Los Angeles Times

The San Francisco Bay Area, like Santa Barbara, is home to a vast network of oil pipelines that could easily rupture and cause the same kind of disastrous spill that is blackening the Southern California coast.

A large pipeline next to Refugio State Beach in Santa Barbara County burst Tuesday and spewed up to 105,000 gallons of crude oil, and officials say much of it entered the Pacific Ocean, where it coated wildlife and prompted an emergency oil spill response.

It is the kind of disaster that local officials say could happen in the Bay Area, especially around the oil refineries in Richmond and Martinez, where petroleum is regularly transported between marine terminals and storage facilities along San Francisco Bay and the Carquinez Strait.

“Pipelines are everywhere throughout the East Bay complex, and where there are pipelines there is the possibility of a rupture,” said Ted Mar, the chief of the prevention branch of the California Department of Fish and Wildlife’s Office of Spill Prevention and Response. “There are all sorts of different reasons a pipeline might fail.”

Cause still unknown

Investigators have not yet figured out why the 24-inch pipeline burst next to Refugio State Beach in Santa Barbara County. The oil bubbled up into a culvert, ran under Highway 101 and flowed through a storm drain into the ocean. The pipeline was shut off within a few hours of its discovery. By Wednesday afternoon, a 9-mile plume of oil could be seen from the road along the scenic stretch of coastline about 20 miles northwest of Santa Barbara.

Santa Barbara County health officials shut down Refugio State Beach, where the spill was concentrated, and officials said there was a strong petroleum smell.

“We are starting to get some oiled wildlife in our facility,” said Steve Gonzalez, the spokesman for the Office of Spill Prevention and Response, adding that the slick is spreading at a rate of 3 to 4 miles a day. “We don’t have any hard numbers, but we do have some oiled wildlife.”

Gonzalez said the pipeline was transporting crude from the Exxon Mobil plant inland to Bakersfield. The pipe, operated by Plains All American Pipeline LP, a Houston company, is called the Flores to Gaviota Pipeline.

Company efforts

“The culvert has been blocked so no additional oil is reaching the water,” the company said in a statement. “Plains deeply regrets this release has occurred and is making every effort to limit its environmental impact.”

Most of the pipelines in the Bay Area are not large transmission lines pumping crude long distances like the one that ruptured at Refugio beach, Mar said. Still, a rupture could easily happen at one of the many underground pipes at petroleum companies on and around San Francisco Bay.

The last major pipeline disaster in the Bay Area was in 2004 when an underground 14-inch diameter pipe owned by Kinder Morgan Energy Partners ruptured, spewing 123,774 gallons of diesel fuel into Suisun Marsh, near Fairfield, sliming birds, fish and mammals and spoiling some 224 acres of wetlands. The pipeline was taken out after the spill.

Plains has a checkered history in California and around the country. The company was fined $1.3 million for Clean Water Act violations in March 2005 when 142,506 gallons of oil spilled into Pyramid Lake, part of the California Aqueduct 60 miles northwest of Los Angeles.

The company, which was then called Pacific Pipeline Systems LLP, was forced to abandon 70 miles of pipeline that ruptured because of a landslide, according to Suzanne Skadowski, the spokeswoman for the U.S. Environmental Protection Agency.

The pipeline giant also paid at least $1.5 million for the April 2011 release of 1.2 million gallons of crude oil near a Cree community in northwest Alberta, the largest oil spill in Canada in more than three decades.

Alberta’s energy regulator issued a scathing report after that spill, accusing a subsidiary of the company of improperly inspecting welds, failing to backfill around the pipe and placing a higher priority on keeping the pipeline running than containing the leak.

Plains has three storage facilities in the Bay Area but no pipelines. Mar said most of the lines in the Bay Area are smaller pipes that connect the oil refineries in Richmond and Martinez to storage tanks and marine terminals. Their proximity to populated areas makes disaster a little less likely.

The long transmission pipelines “are the lines that carry the product long distances between regulated areas,” Mar said. “Those are the ones to worry about, because those are the ones away from people looking at them constantly. They can go quite a distance before someone realizes they are leaking.”

Odor was the tip-off

The ruptured pipeline in Santa Barbara was discovered only after authorities went to the beach to investigate reports of a foul smell.

The Santa Barbara coastline is also an oil-rich area, with rigs and drilling operations out in the ocean. It was on the same stretch of coast where hundreds of thousands of gallons of oil spilled in 1969 after a blowout on an oil platform. That spill, the largest in U.S. history at the time, killed thousands of seabirds and marine mammals and was credited with starting the modern American environmental movement, which prompted major regulations against the oil industry.

“That region has a lengthy history. Its a high-producing area,” according to Mike Ziccardi, director of the Oiled Wildlife Care Network at UC Davis. “There are natural seeps there. We receive from 150 to 200 birds every year from there coated with oil that wasn’t from spills. It’s from natural seeps.”

Mar said cracks, valve malfunctions or other mishaps could easily happen in the Bay Area, especially during an earthquake, but “oil spills are more an exception than the rule.”

“When they happen, we need to respond quickly to protect the environment and California’s resources,” he said. “We are all stakeholders.”

Peter Fimrite is a San Francisco Chronicle staff writer.
Alberta Canada, Canadian regulation, Crude By Rail, Electoral politics, Oil prices, Pipeline transport, Tar sands crude

Alberta election could send tremors through Montana economy

Repost from The Missoulian
[Editor:  Pay attention to Alberta!  Changes there will send ripples all along the rails in the U.S., from the Upper Midwest to the East Coast, West Coast and Gulf Coast.  Congratulations to Rachel Notley and the New Democratic Party!  – RS]

Alberta election could send tremors through Montana economy

By Rob Chaney, May 09, 2015 5:30 pm
Rachel Notley
Alberta New Democratic Party leader Rachel Notley speaks on stage Tuesday night in Edmonton after being elected Alberta’s new premier. The NDP won a majority in the provincial Legislative Assembly by toppling the Progressive Conservative colossus that has dominated the province for more than four decades. Photo: NATHAN DENETTE, Canadian Press

Montana’s political seismograph didn’t rattle much last Tuesday when its neighbor to the north underwent a governmental earthquake.

But that could change in the coming weeks, as the citizens of Alberta absorb the magnitude of their replacement of Canada’s longest-standing political party rulers with a left-wing opposition pledged to look hard at its energy economy.

“The Progressive Conservative Party has been in power two years longer than I’ve been alive,” said University of Montana biology professor Mark Hebblewhite, a 42-year-old Alberta native. “I think this is a real response to the ongoing mismanagement of Alberta’s bounty. One thing that hit the nail on the head was how the province went from being overrun with money to crashing in another bust. People get really tired of it.”

The New Democratic Party took 53 seats in the Alberta Parliament in Tuesday’s election. Another traditional minority group, the Wildrose Party, surprisingly found itself in second place with 21 seats. The Progressive Conservatives held onto just 10 seats.

NDP party leader Rachel Notley was credited for a remarkable political ground game that unseated Progressive Conservative Party leader Jim Prentice – a man widely considered a future leader of all Canada. Prentice resigned from his post on election night and said he was at least temporarily leaving politics.

Alberta’s entire United States border runs along Montana, from the western edge of Waterton-Glacier International Peace Park to the 110th Meridian north of Havre. The province and state share the spine of the Rocky Mountains and the beginnings of the great mid-continental prairies.

They also share a relatively recent surge in energy development. Over the past decade while Montana has exploited its Bakken oil and gas fields along the border with North Dakota, Alberta has been opening massive production in tar sands petroleum near Fort McMurray.

Oil from the tar sands has become both a political and social controversy.

New Democratic Party officials have questioned the need for the Keystone XL pipeline that would run south from Alberta, through a corner of Montana and down to refineries in Oklahoma and Texas. The Obama administration has stalled permitting of the international border crossing, while Montana’s bipartisan congressional delegation has supported it.

“If the Keystone XL doesn’t happen, the amount of rail traffic leaving Alberta would be impacted significantly from that decision,” said Bentek Energy senior analyst Jenna Delaney. “Currently, taking the Keystone XL out would increase petroleum unit trains by five a day out of Alberta. And Transport Canada officials say residents in Canada are very concerned with rail traveling through their communities.”

Moving petroleum by rail has become an issue in both Canada and the United States, signposted most recently by last week’s explosion of a group of oil tank cars near Heimdal, North Dakota.

Caryn Miske of the Flathead Basin Commission said the prospect of moving more oil trains along the southern border of Glacier National Park is under close scrutiny.

“We’re already seeing impacts from the amount of oil that’s moving around,” Miske said. “The number of trains and cars carrying oil has increased, and that’s really concerning, considering how many near-misses we’ve had.”

Burlington Northern Santa Fe has a freight line that runs out of Alberta into Montana at Sweet Grass, although there’s not much cross-border oil traffic there yet.

***

Delaney said another factor of the government change could be the NDP’s campaign pledge to revamp the province’s tax structure on energy development.

“They’re looking at increasing income taxes and royalty rates to corporations, which the oil companies aren’t happy about,” Delaney said. “The last time I was in Calgary, the atmosphere was already a little bleak. If taxes are raised on corporations, I don’t know how they might respond. Companies with offices in other places might shift people away from Calgary.”

Much of the province’s energy economy has extremely expensive initial start-up costs. Energy analysts have already been forecasting a drop in Albertan oil production as new projects slip below their break-even points with falling oil prices.

Delaney said that could have an impact on Montana’s economy, as the demand for megaloads of oil field equipment transported across the state stalls.

Longtime conservation activist Stephen Legault said the provincial government’s failure to manage its oil wealth led to great voter frustration.

“We’re drilling 20,000 wells a year in Alberta, and we’re $7 billion in the hole economically,” Legault said. “That’s largely because when oil goes below $75 a barrel, provincial coffers take a massive hit.”

The result has been a government unable to fix damage from the floods that ravaged Calgary in 2013, or even to send land management officials to cross-border conferences in Montana.

While the new government has majority control of Alberta’s Parliament, its influence over the provincial agencies could be a murkier matter. Those departments have had decades of one-party control appointing their directors and staffs.

“If I was south of the border looking north, I wouldn’t expect to see anything dramatic right away,” Legault said. “We’ve had five changes of government since 1905. The bureaucracy is so deeply entrenched after 45 years of one-party rule, it’s going to take years for a new government to put in place the people it wants to create change.”

Alberta Canada, Canadian regulation, Electoral politics, Natural gas, Oil Industry, Oil prices, Pipeline transport, Tar sands crude

Alberta’s possible pivot to the left alarms Canadian oil sector

Repost from Reuters

Alberta’s possible pivot to the left alarms Canadian oil sector

By Scott Haggett and Nia Williams, May 4, 2015 7:07am EDT
Alberta NDP Leader Rachel Notley meets with Mayor Naheed Nenshi in his office in Calgary, Alberta, April 30, 2015. REUTERS/Todd Korol

(Reuters: CALGARY, Alberta) – Canada’s oil-rich province of Alberta is on the cusp of electing a left-wing government that can make life harder for the energy industry with its plans to raise taxes, end support for key pipeline projects and seek a bigger cut of oil revenues.

Polls suggest Tuesday’s election is set to end the Conservative’s 44-year reign in the province that boasts the world’s third-largest proven oil reserves and now faces recession because of the slide in crude prices.

Surveys have proven wrong in Canadian provincial elections before and voters may end up merely downgrading the Conservatives’ grip on power to a minority government.

Yet the meteoric rise of the New Democratic Party and the way it already challenges the status-quo of close ties between the industry and the ruling establishment has alarmed oil executives. The proposed review of royalties oil and gas companies pay the government for using natural resources and which could lead to higher levies, is a matter of particular concern.

“Now is not the time for a review of oil and natural gas royalties,” Tim McMillan, president of the Canadian Association of Petroleum Producers, the country’s top oil lobby, said in a statement.

A 2007 increase in the levy was rolled back when the global financial crisis struck and oil executives say today the time is equally bad to try it again.

Yet the left’s leader Rachel Notley, a former union activist and law school graduate, has shot up in popularity ratings in the past months advocating policies that have been anathema for many conservative administrations.

She says she would not lobby on behalf of TransCanada Corp’s controversial Keystone XL pipeline or support building of Enbridge Inc’s Northern Gateway pipeline to link the province’s oil sands with a Pacific port in British Columbia. Citing heavy resistance from aboriginal groups to the Enbridge line, Notley says Alberta should back those that are more realistic such as TransCanada’s Energy East pipeline to the Atlantic ocean.

PACKING UP?

Notley also advocates a 2 percentage point rise in Alberta’s corporate tax rate to 12 percent to shore up its budget that is expected to swing from a surplus to a C$5 billion deficit in 2015/2016 as energy-related royalty payments and tax revenues shrink.

Even with the proposed corporate tax hike Alberta’s overall taxes would remain the lowest nationally. Oil executives warn, however, that any new burdens at a time when the industry is in a downturn, shedding jobs and cutting spending, could prompt firms to move corporate head offices out of the province.

“Business is mobile,” said Adam Legge, president of the Chamber of Commerce in Calgary where most of Canada’s oil industry is based. “Capital, people and companies move.”

Ironically, the challenge the oil industry and the Conservatives face is in part a by-product of Alberta’s rapid growth fueled by the oil-sands boom.

The influx of immigrants from other parts of Canada and overseas has changed the once overwhelmingly white and rural province. Today Alberta is one of the youngest provinces and polls show younger and more diverse population is more likely to support left-wing causes such as environment and education and more critical of big business. The New Democratic Party still only got 10 percent of the votes in the 2012 vote, but an election of a Muslim politician as a mayor of Calgary in 2010 served as an early sign of the changing political landscape.

The Conservatives themselves and their gaffe-prone leader Premier Jim Prentice also share the blame for the reversal of fortunes with one poll showing them trailing the left by 21 percent to 44 percent.

Prentice angered voters when he told Albertans to “look in the mirror” to find reasons for the province’s fiscal woes and then passed a budget in March that raised individual taxes and fees for government services but spared corporations.

Scandals – Prentice’ s predecessor left last year because of a controversy over lavish spending – and blunders added to the party’s woes.

The NDP vaulted to the top of the polls after Notley’s strong performance in an April 23 televised debate, when Prentice, former investment banker, drew fire for suggesting his rival struggled with math.

Then there is voter fatigue with a party seen as too comfortable and scandal-prone after decades in power.

“It’s still the same gang, the same policy, same procedures, the same concept of entitlement,” said one executive at a large oil and gas producer who declined to be named because he is not authorized to talk to the media. “I know some extremely neo-conservative guys who have said enough is enough.”

(Additional reporting by Julie Gordon in Vancouver and Mike De Souza in Ottawa; Editing by Amran Abocar and Tomasz Janowski)
Diluted bitumen (Dilbit), Pipeline transport, Public permitting, Tar sands crude

How the State Department secretly approved a major tar sands expansion

Repost from DeSmogBlog
[Editor:  Sign the CREDO petition opposing the Enbridge expansion scheme.  – RS]

Emails: How State Department Secretly Approved Expanding Piece of Enbridge’s “Keystone XL Clone”

By Steve Horn, April 20, 2015 – 03:58

DeSmogBlog has obtained dozens of emails that lend an inside view of how the U.S. State Department secretly handed Enbridge a permit to expand the capacity of its U.S.-Canada border-crossing Alberta Clipper pipeline, which carries tar sands diluted bitumen (“dilbit”) from Alberta to midwest markets.

The State Department submitted the emails into the record in the ongoing case filed against the Department by the Sierra Club and other environmental groups in the U.S. District Court for the District of Minnesota. Collectively, the emails show that upper-level State Department officials hastened the review process on behalf of Enbridge for its proposed Alberta Clipper expansion plan, now rebranded Line 67, and did not inform the public about it until it published its final approval decision in the Federal Register in August 2014.

According to a March 17, 2014 memo initially marked “confidential,” Enbridge’s legal counsel at Steptoe & Johnson, David Coburn, began regular communications with the State Department on what the environmental groups have dubbed an “illegal scheme” beginning in at least January 2014.

Enbridge State Department Emails
Enbridge State Department Emails | Image Credit: U.S. District Court for the District of Minnesota

Environmental groups have coined the approval process an “illegal scheme” because the State Department allowed Enbridge to usurp the conventional presidential permit process for cross-border pipelines, as well as the standard National Environmental Policy Act (NEPA) process, which allows for public comments and public hearings of the sort seen for TransCanada’s Keystone XL pipeline.

Further, the scheme is a complex one involving Enbridge’s choice to add pressure pump stations on both sides of the border to two pipelines, Enbridge Line 3 and Enbridge Line 67, to avoid fitting under the legal umbrella of a “cross-border” pipeline.

Hastening the approval process — and thus dodging both the conventional presidential permit and NEPA process — came up in a June 6, 2014 memo written by Coburn and his Steptoe co-counsel Josh Runyan. Enbridge’s legal argument centered around ensuring profits for its customers “consistent with its obligations as a common carrier.”

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota

“Wrap This Up…Running Out of Time”

On March 18, 2014, Ona Hahs, Attorney-Advisor for the State Department’s Office of the Legal Advisor, informed her Department colleagues in an email that “we have to wrap this up” because she was informed by Coburn that Enbridge was moving forward with the project and about to break ground on it.

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota 

Just over a week later on March 27, 2014, Hahs emailed her colleagues again, informing them that Coburn had just called her again and they were “running out of time” to offer Enbridge what it requested.

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota

A month later, Robert Cekuta — then Deputy Assistant Secretary of State for the State Department’s powerful and industry-friendly Bureau of Energy Resources (BER) and now U.S. Ambassador to oil-soaked Azerbaijan — wrote a memo on April 24, 2014 to former BER head Carlos Pascual recommending approval of the “illegal scheme.” 

Pascual now serves as a non-resident Fellow at the Columbia University Center on Global Energy Policy, which many suspect is funded by the oil and gas industry, but the Center does not disclose its funding sources. Pascual signed his “CP” initials on the “approve” line, meaning Enbridge’s project had the State Department seal of approval.

State Department Enbridge Emails
Image Credit: U.S. District Court for the District of Minnesota

Though officially written by Cekuta, the bottom of the memo indicates it was drafted by both Hahs and Michael Brennan. Before serving in various capacities for the State Department beginning in 2003, Brennan worked for Shell Oil as its Manager for Export Sales Business Development in Asia and Latin America, according to his LinkedIn profile.

Later that same day, Brennan fired an email off to Coburn informing him of the State Department approval decision.

“Keystone XL Clone” Precedent Cited

In the June 6 memo penned by Enbridge’s counsel, its attorneys explained why “interconnections on Line 67 can take place in advance of the U.S. Department of State’s issuance of the Supplemental Environmental Impact Statement (‘SEIS‘) and the requested Presidential Permit to authorize Enbridge to operate the border segment of Line 67 at its design capacity of 880,000 barrels per day.”

Among the myriad legal cases cited in the memo, Coburn and Runyan pointed to the Sierra Club, et al v. U.S. Army Corps of Engineers case reported on by DeSmogBlog, which Enbridge argued and won as a defendant.

Coburn and Runyan wrote that the Sierra Club v. Army Corps of Engineers case rejects the legal “argument that construction of pipeline outside the area of federal permitting jurisdiction could be [prohibited] pending NEPA review.”

“Because construction of the pump stations and interconnections are not occurring within the border segment of Line 67, and are independent from the Line 67 border capacity expansion…this activity is not required to await the completion of the SEIS,” they wrote.

That case, like the current one, centered around NEPA.

In that one, the U.S. Army Corps of Engineers handed Enbridge a controversial Nationwide Permit 12 permit to build its now-operational Flanagan South pipeline, which Sierra Club argued circumvented the NEPA process. It appears that case set an important legal precedent.

Flanagan South connects to Alberta Clipper in Flanagan, Illinois and ends in Cushing, Oklahoma via a connection to the Seaway Twin pipeline, which Enbridge co-owns with Enterprise Products Partners. From there, the heavy tar sands dilbit is taken to Gulf coast refineries, the same ones TransCanada’s Keystone pipeline system currently feeds into.

Together, all three pipeline pieces make up what DeSmogBlog has called the “Keystone XL Clone” pipeline system.

“Stand Down”

Asked about the emails, Doug Hayes, the Sierra Club attorney working on the U.S. District Court of Minnesota case, wrote in an email to DeSmogBlog that he thinks the State Department is essentially partaking in a dereliction of duty.

“There is absolutely no question that the State Department has the authority to tell Enbridge to stand down and follow the process that was always intended,” wrote Hayes. “The State Department is just not taking its presidential permitting responsibilities seriously and letting Enbridge call the shots.”

Neither representatives from Enbridge, the Steptoe & Johnson attorneys nor the State Department officials involved in the behind-the-scenes permitting of the “illegal scheme” responded to requests for comment sent by DeSmogBlog.

A hearing is scheduled for September 10 at the U.S. Courthouse in Minneapolis, Minnesota for the environmental groups’ Motion for Partial Summary Judgment, which was submitted on April 6.