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What’s Behind the Confusion Over Oil Sands Pipeline Capacity?
News Articles | Solve Climate News | March 08, 2011
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As planning for a controversial new oil sands pipeline through America’s heartland intensifies, watchdogs have questioned why the Canadian energy giant seeking to build the project has been using two different figures for the pipe’s capacity.
TransCanada’s press statements and website material describe the proposed 1,959-mile Canada-to-Texas Keystone XL pipeline as capable of carrying approximately 500,000 barrels per day by late 2012. But its regulatory filings with federal and state governments show that it would be able to hold almost double that amount, as much as 900,000 barrels.
Why the discrepancy?
TransCanada says it is normal business practice: One number is used for permit filings, the other to offer potential customers the commercial capacity that is actually for sale. But for opponents of the $7 billion oil project, the inconsistency raises issues of trust and credibility as a decision nears over whether to greenlight the massive project.
‘Commercial’ vs. ‘Total’ Capacity
Shawn Howard, a spokesperson for Calgary-based TransCanada, acknowledged that using two numbers may be confusing, but said the company has not been trying to deceive anyone in the increasingly high-profile debate.
The disparity, he said, is because the 500,000 number reflects the amount of capacity that TransCanada wants to sell to shippers right now — what it calls “commercial” capacity — not how much oil the pipeline can hold, as some in the media have reported.
Major news organizations such as the Wall Street Journal and Bloomberg have published the lower figure as the total capacity of Keystone XL.
“Some of the wording could have been a little clearer,” Howard told SolveClimate News.
Environmentalists at the center of the long-running pipeline controversy say TransCanada is intentionally using the lower figure to mislead the public about the demand that exists for a project they claim is unnecessary.
Of the 500,000 daily barrels being made available, the firm has secured long-term contracts to transport some 380,000 barrels, according to a new Department of Energy (DOE) analysis. That’s just over 75 percent of commercial capacity, but only 42 percent of total capacity.
“TransCanada has spun the 500,000 barrels-per-day figure to make it appear that a higher percentage of capacity has been sold,” said Susan Casey-Lefkowitz, director of the international program at the Natural Resources Defense Council, in an email.
Casey-Lefkowitz and others have said that oil sands can’t flow fast enough to fill the pipe and cite the DOE report as the latest evidence of a possible product shortage.
Is the Pipeline Needed Now?
The study commissioned by the DOE and released by the State Department called “Keystone XL Assessment” found that current pipeline capacity for Canadian heavy crude is already large enough that new piping infrastructure would not be needed until at least 2020.
Further, the report said that if industry forecasts for oil sands production are even slightly lower than expected, among other factors, volumes of the unconventional crude coming out of Alberta may not justify constructing Keystone XL until 2025, or even later.
Paul Blackburn, staff attorney for Plains Justice, an environmental group that opposes Keystone XL, charges that TransCanada’s widespread use of the lower figure is masking this reality.
Keep reading this article on the Solve Climate website
Tagged with: keystone xl, transcanada, pipeline
