State Department urged to look at Keystone pipeline cleanup challenges

Washington • As the State Department readies its final environmental review of the Keystone XL pipeline, foes of the project are pressuring the Obama administration to pay attention to the challenge of mopping spills of the heavy crude set to flow through it.

When the State Department issued its draft of the analysis in March, it largely ignored the issue, prompting a rebuke from conservationists as well as the Environmental Protection Agency, which has overseen the slow cleanup of oil-sands crude dumped into Michigan's Kalamazoo River in July 2010.

That episode revealed the difficulties in cleaning up some Canadian crude, which sank to the bottom of the river and mixed with sediment, defying traditional removal methods that focus on floating and suspended oil.

Since Keystone XL is slated to carry a similar substance over more than 1,000 bodies of water, the State Department should be paying attention, said Danielle Droitsch, director of the Canada program at the Natural Resources Defense Council.

"We're hoping the State Department will realize there's an entire analysis that needs to be completed on the spill impacts," Droitsch said. "The emergency response plans and everything associated with that need to be completely updated."

If approved, TransCanada Corp.'s proposed Keystone XL would transport up to 900,000 barrels a day of crude from Alberta, Canada to the oil hub in Cushing, Okla., where it would connect with an already-constructed pipeline sending supplies to Gulf Coast refineries.

Under a 2004 executive order, the State Department is tasked with deciding whether the border-crossing project is in the "national interest," a determination that will only come after environmental reviews are finished and years after Calgary-based pipeline operator TransCanada Corp. first sought approval for Keystone XL.

If the State Department leaves some spill considerations out of its final environmental review — or doesn't cover them thoroughly — that could provide an opening for future legal challenges. Or it could provoke an objection from the Environmental Protection Agency, formally putting a final decision on Keystone XL in President Barack Obama's hands.

Although Keystone XL would ferry a variety of crudes over its 1,707 miles, environmentalists are most concerned about the planned transport of dilbit, the same type of crude that fouled the Kalamazoo River three years ago. Dilbit is made up of bitumen, a thick, sticky hydrocarbon harvested in Canada that is too hard at room temperature to flow through pipelines on its own. To ready it for pipeline transport, companies dilute the bitumen with natural gas liquids or other substances.

The result is a lighter blended oil that in theory should float on water. But after Enbridge Inc.'s 6B pipeline burst and sent more than a million gallons of dilbit into a creek feeding the Kalamazoo River, the lighter diluents dispersed or evaporated, and the heavier bitumen that was left behind sank.

That confounded emergency responders, who were forced to write a new chapter in the oil spill cleanup book, an EPA incident commander later told Michigan Live website.

Although the oil industry has decades of experience dealing with spills of conventional crude — and has amassed an array of booms and skimmers to tackle floating oil on the surface — relatively little is known about how to combat dilbit in water.

The EPA this year ordered Toronto-based Enbridge Inc. to dredge part of the river to recover more of the submerged material, after determining that it will not significantly degrade on its own. And it told the State Department that any final Keystone XL analysis should "more clearly acknowledge that in the event of a spill to water, it is possible that large portions of dilbit will sink."

"That submerged oil significantly changes spill response and impacts," said EPA's assistant administrator for enforcement, Cynthia Giles, in a letter to the State Department. "It is important to ensure that the future response and remediation plans will protect communities from impacts due to spills."

Even now, it's not clear how many of the lessons learned in Michigan would apply to another water body — or even another formulation of diluted bitumen. Another mix of dilbit in some other water body could float on the surface for longer.

TransCanada says crudes derived from Canada's oil sands behave the same as conventional oil, and will float in still or slow-moving water. But the company acknowledges that if it isn't cleaned up swiftly, any crude oil spilled in water can weather, mix with dirt and start to sink. Through a spokesman, TransCanada stressed "diluted bitumen and other heavy crude oils have been transported safely in pipelines in the U.S. and Canada for decades."

"But we continue to pay close attention to the lessons provided by incidents such as Enbridge's Kalamazoo River spill and BP's Macondo blow-out, as well as the research being done to better understand how crude oil behaves in the environment, to ensure we have the latest and most appropriate procedures and technology in place to respond to the unlikely event of a pipeline leak in rivers or other water bodies," TransCanada said. "We conduct regular safety and emergency response drills with local emergency response agencies to practice spill response techniques along our Keystone Pipeline."

A National Academy of Sciences study released in June said diluted bitumen was no more corrosive and damaging to pipelines than other crudes, but there was no analysis of how the substance behaves when spilled.

Recognizing the questions surrounding the fate of dilbit in water, a Canadian government panel this month recommended approval of Enbridge's planned Northern Gateway pipeline to Canada's west coast, but only if the company develops a research program on the behavior and cleanup of heavy oils and complies with 208 other conditions.

Keystone XL supporters cast the push for more spill study as a canard, drummed up by opponents searching for fresh accusations that could slow consideration of the project, after others have been resolved.

Cindy Schild, senior downstream manager for the American Petroleum Institute, stressed that Keystone XL has already undergone "the most comprehensive assessment that's ever been done on any cross-border project to date."

The State Department has said the risk of spills along the 36-inch Keystone XL pipeline is low. And TransCanada has touted its efforts to prevent spills from Keystone XL, including using super-strong carbon steel, electric anti-corrosion protections and automated shut-off valves close together near water crossings. State officials have not said whether its final analysis will include a detailed look at how to tackle a dilbit spill.

The Obama administration could make its final decision on whether to permit the border-crossing Keystone XL pipeline next year, after the State Department issues its final environmental analysis and, later, decides whether the project is in the national interest. Other federal agencies also have a chance to weigh in on the decision.

Obama vowed in June that Keystone XL will only win approval if it does not "significantly exacerbate the problem of carbon pollution." The State Department's final environmental analysis is expected to delve deep into the question of whether Keystone XL will spur dramatic growth in the development of Canadian oil sands, by providing a critical link to Gulf Coast refineries.

Separately, the State Department's inspector general is investigating whether the company contracted to perform the analysis, Environmental Resource Management, misrepresented its past work on other projects for TransCanada. The probe could be finished in February, and, depending on the findings, could stoke calls for a redo of the entire analysis.