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Gulf Coast pipeline hearing set for today

By by Peggy Jones pljones@news-journal.com
Dec. 12, 2012 at 10 p.m.

A hearing was set in Nacogdoches this morning on a motion to dismiss a temporary restraining order against TransCanada, the company building a controversial oil pipeline from central Oklahoma to the Gulf Coast.

A Nacogdoches County judge issued the stop-work order after landowner Michael Bishop filed a suit arguing TransCanada lied to Texans when it said it would use the pipeline to transport crude oil.

TransCanada spokesman David Dodson said crude oil is the only product that will be transported through the pipeline for some time, while the company waits on a presidential permit to allow it to import diluted bitumen (an upgraded form of tar sands) from Canada into the United States.

President Barack Obama denied a permit earlier this year, telling the company to find another route for the northern leg of the project to avoid an environmentally sensitive area of Nebraska.

The Cushing to the Gulf Coast portion of the pipeline being built through East Texas was split off from the Keystone XL Pipeline project at that time, Dodson said. It was renamed the Gulf Coast project and is being built regardless of whether the company receives the much-anticipated permit.

"When President Obama said to resubmit the application, we knew we didn't need a presidential permit from Cushing to Nederland," Dodson said. "That is 485 miles of 36-inch diameter pipeline that is permitted with or without the presidential permit."

Dodson said the Gulf Coast pipeline will be used to transport crude oil stockpiled in Cushing, one of the world's largest oil hubs. An estimated 44 million barrels of crude oil is stored there and the Gulf Coast pipeline could help get that oil flowing to refineries.

When operational, TransCanada said the Gulf Coast pipeline has a capacity to move 700,000 barrels of crude a day.

Dodson said the company eventually plans to move diluted bitumen, referred to as dilbit, through the pipeline in addition to crude oil, but no one can estimate when that would occur.

The oil giant anticipates adjusting the route of the northern pipeline to obtain a presidential permit, but no one knows when it might be permitted; and when it is received, the distance of the northern leg is greater than the Cushing to coast segment.

Dodson said there is no estimate on when work would begin on that segment, or when it would be completed.

Opponents argue - if not initially, the pipeline will eventually carry dilbit which, environmentalists contend is more corrosive than regular crude oil.

Should the pipeline leak, opponents say it would contaminate the land and water tables; and U.S. regulations don't address the product. Dodson said the courts have already ruled diluted bitumen is a form of crude oil.

Despite the legal challenges, Dodson said the anticipated completion date for the Cushing-to-coast segment remains the end of 2013. He said the pipeline would begin carrying crude oil immediately upon its completion.



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