Alberta-Superior pipeline takes center stage in world climate debate

Richard Thomas
Business North
October 27, 2009

(Photo courtesy of Enbridge.)

On Aug. 20, the U.S. State Department granted a Presidential permit for the 1,000-mile “Alberta Clipper” pipeline from Canada’s Alberta oil sands to Superior, due for completion in mid-2010.

On Sept. 2 Enbridge (U.S.) Inc., the partner of Canada-based Enbridge, celebrated in Carlton County, where the company had stacks of pipes ready for construction.

The project will result in 3,000 construction jobs. The influx of workers already has created a shortage of rental housing in Bemidji.

On Sept. 3 a coalition including the Minnesota Center for Environmental Advocacy and Bemidji-based Indigenous Environmental Network filed a lawsuit in U.S. District Court in San Francisco to stop the pipeline.

“The projects would spur refinery expansions and modifications in the United States, leading to increased air and water pollution for residents of the Midwest and other states,” the complaint stated.

It also claims the state department failed “to assess all reasonably foreseeable environmental impacts” and did not “take a hard look at the Alberta Clipper project’s stated purpose and need or to adequately consider a reasonable range of alternatives.”

The state department concluded the current plan is environmentally preferable to the alternatives. The other options included different routes and “no action,” declining to issue the permit.

In the case of no action, “Refiners would seek other means of obtaining the heavy Canadian crude oil, or attempt to obtain additional supplies from less stable and less reliable sources,” said the State Department's environmental impact statement.

It also cited “strategic interests” as reason for approval: reducing American dependence on OPEC (Organization of Petroleum Exporting Countries) oil “in a time of considerable political tension in other major oil producing countries and regions.” The department noted the need to send “a positive economic signal, in a difficult economic period.”

Enbridge also is constructing a $2.2 billion return pipeline, called Southern Lights, to ship diluent (diluting agents) from the Chicago area through Superior to Clearbrook, MN. From there an existing pipeline will be used, with the flow reversed, to carry the diluent to Edmonton, Alberta, Canada.

Enbridge also is expanding its terminal in Superior, adding five new storage tanks to the existing 37. Each new tank has a 250,000-barrel capacity.

Other non-Enbridge pipelines under construction from Alberta are the 2,000-mile TransCanada Keystone I to Illinois and the 3,200 Keystone Expansion to the Gulf of Mexico.

Murphy Oil has weighed potential expanding its Superior refinery to cash in on Canada’s oil boom. It wants to expand its refining capacity from 35,000 to 235,000 barrels per day and expand the refinery’s grounds from 200 to more than 600 acres. So far, “there is no commercial arrangement to provide additional heavy crude to Murphy Oil,” said the U.S. State Department. “No formal application have been submitted to federal or state regulatory agencies.”

Oil sands controversy

The tapping of Canada’s oil sands, also known as tar sands, is often cited as the world’s largest industrial project. It’s been an economic boon but arguably an environmental disaster and unquestionably a public relations fiasco.

The extraction process creates more carbon dioxide than regular oil production. (Estimates as to how much more vary, ranging from 15 percent to triple the amount.) Huge swathes of remote forested land must be strip-mined to extract a tar-like substance called bitumen. Steam plants literally melt oil out the ground.

The water used in the process ultimately flows into toxic tailings ponds miles long. In a much-publicized April 2008 event, 500 ducks died after landing on such a lake.

The extraction process also uses four times more natural gas than mining operations and already accounts for 20 percent of Canada’s natural gas usage. As an alternative, some groups are proposing to build as many as 25 nuclear reactors.

In September the environmental group Greenpeace, which has been staging protest actions at oil sands operations, released “Dirty Oil,” a report carrying apocalyptic predictions for the oil sands: “The rapid development of unconventional hydrocarbons such as Canada’s tar sands could tip the scales toward dangerous and uncontrollable climate change.”

Speaking in defense of the oil sands in Edmonton on Sept. 23, Enbridge (Canada) CEO Patrick Daniel said opposition to the pipeline “has not led to opposition to energy consumption, which is where the vast majority of CO2 (carbon dioxide) emissions are produced.”

Daniel continued, “I would love to see an energy strategy for this country that we can rally the country around, and agree that this is the generally the direction we are going to take and not oppose everything in energy development while still moving toward renewables.”

On the pro-industry website oilsandsreview.com, editor Deborah Jaremko writes, “The oil sands is a massive resource, and undeniably presents some pretty hefty environmental challenges, but I think for Greenpeace it represents the low-hanging fruit of protest potential. Perhaps they should consider consumption-related action, with the understanding that riding bikes everywhere and ditching our jobs and lives to wander the world is simply not feasible (or desirable) for the vast majority of people. Diversifying energy sources is crucial, but it will happen slowly, and it will not happen by ‘stopping the tar sands.’”

Meanwhile, President Obama maintains he is committed to reducing overall greenhouse gas emissions. The massive American Clean Energy and Security Act of 2009, which passed the House in June, promotes low-carbon fuels, conservation and efficiency. A similar bill was introduced into the Senate Oct. 1.

On the same day Duluth Mayor Don Ness, flanked by labor and environmental representatives, held a press conference to express support.

Because they create jobs, the pipelines propose an awkward issue for pro-environmental labor groups such as the Blue Green Alliance, which was represented at the press conference. The Minnesota-based coalition of environmental groups, co-founded by the Sierra Club and United Steelworkers, support clean energy legislation but have not taken a position on the oil sands or the pipelines.

The steelworkers union has objected only to the TransCanada Keystone line citing its use of imported pipes from India, which the union asserts is made of thin material and poses a safety hazard.

The 2008 drop in oil prices slowed but did not stop tar sands development. The number of camp-dwelling workers dropped from 27,000 a year ago to 23,000 now.

“Keeping oil-sands projects ticking along once they are on stream now requires a price of around $35 a barrel,” stated Petroleum Economist magazine in September. “About $80 (per barrel) is necessary for new investments, although in light of a softening of some costs, others put the figure much lower.”

Oil sold at $66.95 per barrel on Sept. 28, according to Bloomberg.com. With oil becoming scarcer, prices only can go up.

Pipeline safety

The Alberta Clipper will cross 162 water bodies in Minnesota and 14 in Wisconsin. Seventeen are within the St. Louis River Estuary that feeds into Lake Superior. The Wisconsin Department of Natural Resources determined the project would produce no significant impact.

“Over the operational life of the Alberta Clipper Project, there would be a very low likelihood of a crude oil release from the pipelines,” concludes the U.S. State Department’s environmental impact statement. The report cites high maintenance standards and leak detection methods. The report also based its conclusion on the assumption that “Enbridge would comply with all applicable laws and regulations.”

Its Web site, www.enbridge.com, encourages that assumption.

“Pipelines are the safest and only practical transportation mode to move large quantities of petroleum,” it states.

But the industry’s safety record shows that “safest” and “practical” doesn’t translate to accident-free.

Enbridge already operates one of the world’s longest pipelines, the 3,100 mile Lakehead system. The first section from Alberta to Superior was built in 1950 when the Canadian region had its first oil boom. Today the Lakehead system transports 1.4 million barrels per day. Over the decades the company has had its share of spills. (Enbridge pipeline accidents, below.)

The safety of pipelines operated by all companies has been a source of contention. There are 168,900 miles of onshore and offshore hazardous liquid pipeline in the United States.

In the 1990s accidents resulted in 200 deaths, and 3,000 injuries (both gas and liquid pipelines) and 1.5 million barrels of spilled liquid.

Enforcement was strengthened when President Bush signed the Pipeline Safety Improvement Act of 2002. (Rep. James Oberstar, D-MN, was a primary House author.) Some pipeline reformers praised the bill as an important step while others criticized it as weak. The act is due for reauthorization in 2010.

According to the U.S. Office on Pipeline Safety, the overall number of “serious” pipeline accidents — involving fatalities and injuries requiring hospitalization — declined from 87 in 1989 to 42 in 2008.

But the number of “significant” incidents (including spills, fatalities and injuries) has increased (277 in 1989 to 292 in 2008). A 2005 spike resulted from the New Orleans flooding.

Between 2003 and 2008 there were 13 fatalities, 39 injuries and $633 million in property damage as a result of pipeline accidents involving hazardous liquid.

Enbridge pipeline accidents

1973: Lakehead PipeLine Co. of Superior (now Enbridge) break releases 31,000 barrels of oil near Argyle, the largest spill in Minnesota until 1991.

August 1979: Lakehead pipeline rupture near Bemidji leaks 10,700 barrels. Company initially recovers 60 percent. Later in 1988 the Minnesota Pollution Control Agency requires Lakehead to extract more oil using new technology; removal continues through 2004.

March 1991: The welded seam of a Lakehead pipeline in Grand Rapids ruptures, releasing 40,476 barrels, more than 7,000 of which goes into Prairie River.

September 1998: 8,810 barrels spill from a Lakehead pipeline near Plummer in Northwestern Minnesota.

July 2002: Pipeline rupture spills 6,000 barrels in marsh west of Cohasset.

January 2007: Enbridge pipeline crack spills 1,190 barrels near Whitewater, WI.

February 2007: Construction crew strikes Enbridge pipeline in Rusk County, spilling 3,000 barrels. In January 2009 Enbridge agrees to pay a $1.1 million settlement to the state of Wisconsin for 545 environmental violations.

April 2007: Enbridge Line 3 (From Alberta to Superior) ruptures in Saskatchewan, spilling more than 3,700 barrels.

November 2007: Line 3 leak near Clearbrook in northern Minnesota explodes, killing welders Steve Arnovich and Dave Mussatti Jr. of Superior. U.S. Department of Transportation levies $2.4 million in fines. Enbridge is appealing the amount.

March 2008: Henri St. Pierre dies in an electrical incident at Enbridge’s Kerrobert, Saskatchewan station.

September 2009: Drilling for Alberta Clipper pipeline causes section of U.S. 2 near Bemidji to collapse.

(Related editorial here.)

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Scraping bottom

Editorial
Business News
10/27/2009


In Isaac Asimov’s 1972 science-fiction novel "The Gods Themselves," scientists discover the seemingly perfect clean energy source. (Don’t ask— it involves pumping matter from a parallel universe.)

Of course there’s an unfortunate side effect: Eventually it’ll cause the sun, and maybe a good chunk of the galaxy, to blow up. But by the time this tidbit is discovered, the economic and scientific forces behind the pump are firmly in place and the information is buried. Hence the title, lifted from 18th century poet Friedrich Schiller: “Against stupidity the gods themselves contend in vain.”

Fortunately the story provides a solution: another pump that draws matter from yet a third parallel universe, counteracting the destructive effect of the first source.

Asimov was optimistic that technology can solve a problem that technology created. There’s no known way to counteract the effect of carbon output, other than, “Stop putting out carbon.” One modern proposal is “sequestration,” which involves separating carbon from emission and injecting it underground, but it’s unproven. Growing more trees helps, because trees consume carbon dioxide and emit oxygen. But it’s doubtful we can plant enough to absorb the carbon produced by all those cars, industries and flatulent livestock.

Finally, the world’s business and political establishments acknowledge the need to reduce carbon output. But we’re still a heavily oil-based economy in the middle of a recession and in need of weaning from Middle East oil. So the exploitation of especially dirty oil in Canada and thousands of miles of new pipeline carrying it to the United States continues.

The Obama administration’s strategy is to treat the oil sands as a temporary fix while we transition to a cleaner, more sustainable energy sources. Meanwhile Congress is hashing over legislation that will support such a direction. The Climate Conference in Copenhagen, Dec. 6-18, is a crucial step to getting the world on the same page regarding carbon output.

Is this all moving fast enough to avoid catastrophe? Whether or not you believe global warming is real, it’s clear we can’t keep pumping pollutants into the environment. The mere fact that we’re extracting tar sands oil is evidence that we’re scraping the bottom of the world’s oil supply. It’s no longer a question whether we have to go green, but when . . . and the sooner, the better. Smart businesses aren’t waiting for federal laws to tell them to embrace green methods.

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