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Mon, 2014-09-01 13:46Steve Horn
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Labor Day News Dump: FERC Hands Enbridge Permit for Tar Sands by Rail Facility

On the Friday before Labor Day — in the form of an age-old “Friday News Dump“ — the Federal Energy Regulatory Commission (FERC) handed a permit to Enbridge, the tar sands-carrying corporate pipeline giant, to open a tar sands-by-rail facility in Flanagan, Ill. by early-2016. 

With the capacity to accept 140,000 barrels of tar sands product per day, the company's rail facility serves as another step in the direction towards Enbridge's quiet creation of a “Keystone XL Clone.” That is, like TransCanada's Keystone Pipeline System sets out to do, sending Alberta's tar sands all the way down to the Gulf of Mexico's refinery row — and perhaps to the global export market.

Flanagan sits as the starting point of Enbridge's Flanagan South pipeline, which will take tar sands diluted bitumen (“dilbit”) from Flanagan to Cushing, Okla. beginning in October, according to a recent company earnings call. From there, Enbridge's Seaway Twin pipeline will bring dilbit to Port Arthur, Texas near the Gulf.

Enbridge made the prospect of a tar sands-by-rail terminal public for the first time during its quarter two investor call.

“In terms of the rail facility, one of the things we're looking at is – and the rail facility is really in relation to the situation in western Canada where there is growing crude oil volumes and not enough pipeline capacity to get it out of Alberta for a two or three year period,” Guy Jarvis, president of liquids pipelines for Enbridge, said on the call.

“So, one of the things we're looking at doing is constructing a rail unloading facility that would allow western Canadian crudes to go by rail to Flanagan, be offloaded, and then flow down the Flanagan South pipeline further into Seaway and to the Gulf.”

FERC has given Enbridge the permit it needs to make that happen.

Tue, 2014-08-19 15:40Steve Horn
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Court: Key Environmental Law Doesn't Apply to Part of Enbridge Keystone XL "Clone"

Keystone XL Clone Flanagan South

A U.S. District Court for the District of Columbia has ruled that Enbridge’s 600-mile-long Flanagan South Pipeline, a Keystone XL “clone,” is legally cleared to proceed opening for business in October

Approved by the U.S. Army Corps of Engineers via a controversial regulatory mechanism called Nationwide Permit 12 (NWP 12), Judge Kentanji Brown Jackson, an Obama-appointed judge, ruled NWP 12 was not a federal government “action.” Thus, Brown posited that Enbridge did not need to use the National Environmental Policy Act (NEPA) regulatory process and NWP 12 was up to snuff.

The case pitted the Sierra Club and the National Wildlife Federation (NWF) against the Army Corps of Engineers and Enbridge and has lasted for just over a year, with the initial complaint filed on August 13, 2013 (Case #: 1:13-cv-01239-KBJ). 

Sierra Club and NWF submitted the recent precedent-setting Delaware Riverkeeper v. Federal Energy Regulatory Commission (FERC) case as supplemental authority for Sierra Club v. U.S. Army Corps of Engineers on the day that decision was handed down. 

But Jackson brushed it aside, saying it doesn't apply to Flanagan South, despite the fact that the Delaware Riverkeeper v. FERC decision said that a continuous pipeline project cannot be segmented into multiple parts to avoid a comprehensive NEPA review.

Although Enbridge will operate this project as a single pipeline, Flanagan South was broken up into thousands of “single and complete” projects by the Army Corps of Engineers. This helped Enbridge skirt the requirement of a more comprehensive and public-facing NEPA review, which involves public hearings and a public comment period.

“Here, not only was there no NEPA analysis of this massive project, there was never any public notice or opportunity for involvement before it was constructed across four states,” Sierra Club attorney for the case, Doug Hayes, told DeSmogBlog. “The entire thing was permitted behind closed doors.”

For all intents and purposes, then, Flanagan South is a fait accompli and tar sands diluted bitumen (“dilbit”) will begin pumping through it as summer turns to fall. 

Fri, 2014-08-15 17:30Steve Horn
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Investor Call: Enbridge's Keystone XL Clone Opens in October, Rail Facility to Follow

In a recent quarter two call for investors, Enbridge Inc executives said the company's “Keystone XL” clone — the combination of the Flanagan South and Seaway Twin pipelines — will open for business by October.

As previously reported by DeSmogBlog, Enbridge has committed a “silent coup” of sorts, ushering in its own Alberta to Port Arthur, Texas pipeline system “clone” of TransCanada's Keystone XL tar sands pipeline. Unlike Keystone XL's northern leg, however, Enbridge has done so with little debate. 

With the combination of the Alberta Clipper (now called Line 67, currently up for expansion), Flanagan South and Seaway Twin pipelines, Enbridge will soon do what TransCanada has done via its Keystone Pipeline System.

That is, bring Alberta's tar sands to Gulf of Mexico refineries and send it off to the global export market.

According to Guy Jarvis, president of liquids pipelines for Enbridge, even though the Cushing, Oklahoma to Port Arthur, Texas Seaway Twin is technically operational, it will not become functional until Flanagan South opens in October. 

“The base plan had been, and still is, to do the line fill of the Seaway Twin from Flanagan South. So we don't expect to see too much off the Seaway Twin until Flanagan South does go into service,” Jarvis said on the investor call.

“It does have the capability to be line filled at Cushing if the barrels are available and the market signals would suggest that you would want to do that. But at this point in time, we think it will be the base plan that it is filled on from Flanagan South.”

Beyond piping diluted bitumen (“dilbit”) to market, Enbridge also has plans to market dilbit via rail in a big way.

Wed, 2014-06-25 13:27Steve Horn
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Recent Federal Court Decision Could Muddy Waters for Keystone XL South, Flanagan South

On June 6, the U.S. Court of Appeals for the District of Columbia Circuit handed down a ruling that will serve as important precedent for the ongoing federal legal battles over the Keystone XL and Flanagan South tar sands pipelines.

In the Delaware Riverkeeper v. Federal Energy Regulatory Commission (FERC) case, judges ruled that a continuous pipeline project cannot be segmented into multiple parts to avoid a comprehensive National Environmental Policy Act (NEPA) review. This is what Kinder Morgan proposed and did for its Northeast Upgrade Project.

As reported on DeSmogBlog, the U.S. Army Corps of Engineers did the same thing to streamline permitting for both the southern leg of TransCanada's Keystone XL and Enbridge's Flanagan South. Sierra Club and co-plaintiffs were denied injunctions for both pipelines in October and November 2013, respectively.

Delaware Riverkeeper v. FERC dealt with breaking up a new 40-mile long pipeline upgrade into four segments. For the other two cases, the Army Corps of Engineers shape-shifted the two projects — both hundreds of miles long each — into thousands of “single and complete” projects for permitting purposes.

On the day of the Delaware Riverkeeper v. FERC decision, Sierra Club attorney Doug Hayes submitted the case as supplemental authority for the ongoing Flanagan South case.

On May 5, Hayes also submitted paperwork to appeal the Keystone XL South decision in front of the U.S. Court of Appeals for the Tenth Circuit, which was docketed by the clerk of Ccurt the next day.

Hayes told DeSmogBlog his side will file an opening brief for the appeal on July 30. It seems likely Delaware Riverkeeper v. FERC will be a key part of that appeal.

In a sign of the importance of the outcome for the oil and gas industry, the American Petroleum Institute (APIentered the Sierra Club v. Army Corps of Engineers case on Keystone XL as an intervenor on May 16, represented by corporate law firm Hunton & Williams.

At the federal level, Hunton & Williams lobbies on behalf of Koch Industries, a company with a major stake in tar sands leases and refining.

Thu, 2014-06-19 09:57Steve Horn
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Silent Coup: How Enbridge is Quietly Cloning the Keystone XL Tar Sands Pipeline

While the debate over the TransCanada Keystone XL tar sands pipeline has raged on for over half a decade, pipeline giant Enbridge has quietly cloned its own Keystone XL in the U.S and Canada. 

It comes in the form of the combination of Enbridge's Alberta Clipper (Line 67), Flanagan South and Seaway Twin pipelines.

The pipeline system does what Keystone XL and the Keystone Pipeline System at large is designed to do: ship hundreds of thousands of barrels per day of Alberta's tar sands diluted bitumen (“dilbit”) to both Gulf Coast refineries in Port Arthur, Texas, and the global export market.

Alberta Clipper and Line 67 expansion

Alberta Clipper was approved by President Barack Obama and the U.S. State Department (legally required because it is a border-crossing pipeline like Keystone XL) in August 2009 during congressional recess. Clipper runs from Alberta to Superior, Wis.

Map Credit: U.S. Department of State

Initially slated to carry 450,000 barrels per day of dilbit to market, Enbridge now seeks an expansion permit from the State Department to carry up to 570,000 barrels per day, with a designed capacity of 800,000 barrels per day. It has dubbed the expansion Line 67.

As reported on previously by DeSmogBlog, Line 67 is the key connecter pipeline to Line 6A, which feeds into the BP Whiting refinery located near Chicago, Ill., in Whiting, Ind. BP Whiting — the largest in-land refinery in the U.S. — was recently retooled to refine larger amounts of tar sands under the Whiting Refinery Modernization Project.

Mon, 2014-05-05 10:33Steve Horn
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For First Time, TransCanada Says Tar Sands Flowing to Gulf in Keystone XL South

TransCanada admitted for the first time that tar sands oil is now flowing through Keystone XL's southern leg, now rebranded the Gulf Coast Pipeline Project. The company confirmed the pipeline activity in its 2014 quarter one earnings call.

Asked by Argus Media reporter Iris Kuo how much of the current 300,000 to 400,000 barrels per day* of oil flowing from the Cushing, Oklahoma to Port Arthur, Texas pipeline is tar sands (“heavy crude,” in industry lingo), TransCanada CEO Russ Girling confirmed what many had already suspected.

“I don’t have that exact mix, but it does have the ability to take the domestic lights as well as any heavies that find a way down to the Cushing market, so it is a combination of the heavies and the lights,” said Girling. “I just don’t know what the percentage is.”

The Keystone Pipeline System — of which Keystone XL's northern leg is phase four of four phases — is and always has been slated to carry Alberta's tar sands to targeted markets. So the announcement is far from a shocker.


Image Credit: Wikimedia Commons

More perplexing is why it took so long for the company to tell the public that tar sands oil now flows through the half of the pipeline approved via a March 2012 Executive Order by President Barack Obama

Wed, 2014-04-30 21:55Steve Horn
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Explosive Virginia Train Carried Fracked Bakken Oil, Headed to Potential Export Facility

Platts confirmed CSX Corporation's train that exploded in Lynchburg, Virginia was carrying sweet crude obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin. CSX CEO Michael Ward has also confirmed this to Bloomberg.

“Trade sources said the train was carrying Bakken crude from North Dakota and was headed to Plains All American's terminal in Yorktown,” Platts explained. “The Yorktown facility can unload 130,000 b/d of crude and is located on the site of Plains oil product terminal.”

In January, the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration issued a Safety Alert concluding Bakken crude is more flammable than heavier oils. Hence the term “bomb trains.”

At least 50,000 gallons of the oil headed to Yorktown is now missing, according to ABC 13 in Lynchburg. Some of it has spilled into the James River, as previously reported on DeSmogBlog.

A map available on CSX's website displaying the routes for its crude-by-rail trains offers a clear indication of where the train was headed.


Map Credit: CSX Corporation

Formerly a refinery owned by Standard Oil and then BP/Amoco, Plains All American has turned the Yorktown refinery into a mega holding facility. 

Yorktown may become a key future site for crude oil exports if the ban on exports of oil produced domestically in the U.S. is lifted. 

Tue, 2014-04-29 13:14Steve Horn
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TransCanada Charitable Fund Launches Keystone XL "Good Neighbor" Charm Offensive

TransCanada has taken a page out of former U.S. President Franklin Delano Roosevelt's playbook and deployed a public relations “charm offensive” in Texas, home of the southern leg of its Keystone XL tar sands pipeline now known as the Gulf Coast Pipeline Project.

In the 1930s and 1940s, Roosevelt utilized a “good neighbor policy“ — conceptualized today as “soft power” by U.S. foreign policy practitioners — to curry favor in Latin America and win over its public. Recently, TransCanada announced it would do something similar in Texas with its newly formed TransCanada Charitable Fund.

TransCanada has pledged $125,000 to 18 Texas counties over the next four years, funds it channeled through the East Texas Communities Foundation. In February, the company announced the first non-profit recipients of its initial $50,000 grant cycle.  

“The fund is designed to help improve East Texas communities and the lives of their residents through grants to qualifying non-profit organizations in the counties where TransCanada pipeline operations and projects exist,” explained a press release. “All funded projects and programs fall within three charitable categories: community, safety, and the environment.”

TransCanada utilizes the “good neighbor” language in deploying its own public relations pitch.

“At TransCanada, being a good neighbor and contributing to communities is an integral part of our success,” TransCanada's Corey Goulet said in a press release. “The establishment of the fund is another example of our commitment to long-term community investment and our dedication to the people of East Texas.”

Thu, 2013-12-12 14:45Steve Horn
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Federal Pipeline Safety Agency Approves Startup of Keystone XL Southern Half

DeSmogBlog has learned that TransCanada cleared the final hurdle for the southern half of its Keystone XL tar sands pipeline, receiving a green light last week from the Pipeline and Hazardous Materials Safety Administration (PHMSA) following a review of several safety concerns.

TransCanada announced this week that it has begun injecting oil into the southern half of its Keystone XL pipeline in preparation for commercial operations.  

Leading up to PHMSA giving Keystone XL south the go-ahead to start up, Public Citizen raised several questions about the safety of the pipeline. 

Will TransCanada respond to greivances raised about dents, faulty welding, pipeline material designated “junk” and other issues raised in the consumer advocacy group's November investigation? And what about September 10 and September 26 warning letters obtained by Public Citizen raising similar concerns from PHMSA to TransCanada?

Both TransCanada and PHMSA have provided DeSmogBlog answers to these questions.

Rebranded the “Gulf Coast Pipeline Project” by TransCanada, the 485-mile Cushing, Oklahoma to Port Arthur, Texas Keystone XL southern half — approved via a March 2012 Executive Order from President Barack Obama — is set to open for business by mid- to late-January.

Tue, 2013-12-10 12:01Steve Horn
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TransCanada Begins Injecting Oil Into Keystone XL Southern Half; Exact Start Date A Mystery

Keystone XL's southern half is one step closer to opening for business. TransCanada announced that “on Saturday, December 7, 2013, the company began to inject oil into the Gulf Coast Project pipeline as it moves closer to the start of commercial service.”

The Sierra Club's legal challenge to stop the pipeline was recently denied by the U.S. Court of Appeals for the Tenth Circuit, so the southern half, battled over for years between the industry and environmentalists, will soon become a reality.

According to a statement provided to DeSmog by TransCanada, “Over the coming weeks, TransCanada will inject about three million of [sic] barrels of oil into the system, beginning in Cushing, Oklahoma and moving down to the company’s facilities in the Houston refining area.”

In mid-January, up to 700,000 barrels per day of Alberta's tar sands diluted bitumen (dilbit) could begin flowing through the 485-mile southern half of TransCanada's pipeline, known as the Gulf Coast Project. Running from Cushing, Oklahoma to Port Arthur, Texas, the southern half of the pipeline was approved by both a U.S. Army Corps of Engineers Nationwide Permit 12 and an Executive Order from President Barack Obama in March 2012.

BloombergThe Canadian Press and The Oklahoman each reported that the Gulf Coast Project pipeline is now being injected with oil. Line fill is the last key step before a pipeline can begin operations. 

“There are many moving parts to this process – completion of construction, testing, regulatory approvals, line fill and then the transition to operations,” TransCanada spokesman Shawn Howard told DeSmog. “Line fill has to take place first, then once final testing and certifications are completed, the line can then go into commercial service.”

Residents living along the length of the southern half will have no clue about the rest of the start-up process, as TransCanada says it won't provide any more information until the line is already running. “For commercial and contractual reasons, the next update we will provide will be after the line has gone into commercial service,” the company announced.

When DeSmog asked whether the company is currently injecting conventional oil or diluted bitumen sourced from the Canadian tar sands, TransCanada's Howard replied: 

“Many people like to try and categorize the blend, etc., however we are injecting oil into the pipeline. As you’ve likely seen me quoted before, oil is oil and this pipeline is designed to handle both light and heavy blends of oil, in accordance with all U.S. regulatory standards.

I am not able to provide you the specific blend or breakdown as we are not permitted (by our customers) from disclosing that information to the media. There are very strict confidentiality clauses in the commercial contracts we enter into with our customers, and that precludes us from providing that. The reason is that if we are providing information about a specific blend, when it is in our system, etc. – that has the potential to identify who our customers may be or allow others to take financial positions in the market and profit from that information when others do not have access to the same information. This has much farther reaching impacts for the financial markets (and ultimately all of us).”

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