OIL SANDS:

Pipeline giant sidesteps KXL-style permitting fight

Enbridge Inc. is poised to carry out a novel new strategy for avoiding the presidential permitting process that Keystone XL has been mired in for years, shifting extra volumes of Canadian oil between pipelines on its sprawling continental network with the State Department's blessing.

The pipeline titan's plan involves building four interconnections between its Alberta Clipper and Line 3 projects, both of which run from the oil sands region of Alberta to Wisconsin. That would allow 75,000 extra barrels per day (bpd) of heavy Canadian crude to cross the U.S.-Canada border before the State Department finishes its KXL-style review of a plan to nearly double the Clipper's capacity.

While the added volume of oil sands crude might pale in comparison to the 730,000-plus bpd that KXL would carry, State's approval of the Enbridge plan is raising alarms among greens who could see their campaign to curtail fossil-fuel infrastructure imperiled by the move.

"On top of being sneaky, I think it's also clearly illegal," National Wildlife Foundation senior counsel Jim Murphy said in an interview. "The permitting process becomes kind of meaningless if the State Department says this scheme is OK."

Enbridge's strategy rests on the transfer of light crude and heavy crude barrels between the Clipper and Line 3 using its four interconnections, two on each side of the border, which are slated for completion sometime this year. While the pipeline company has secured the necessary state-level permits to increase the Clipper's oil sands crude capacity to 570,000 bpd from its current 450,000 bpd -- and is close to securing the same approval to run as much as 800,000 bpd of heavy crude on the line -- the Obama administration's delay in approving an amended permit leaves Enbridge stalled at the border.

Line 3, however, sits close to the Clipper and can ship more oil sands crude across the border without requiring a new or amended permit. By transferring the heavy fuel between its two pipelines on either side of the Clipper's border-crossing segment, then, Enbridge proposes immediately increasing its oil sands crude capacity without participating in the process that so famously snagged KXL.

State agreed on July 24: "Based on the information you have provided, Enbridge's intended changes to the operation of the pipeline outside the border segment do not require authorization," department official Patrick Dunn wrote to the company.

"If anyone who's high up in the State Department actually knew about this, they'd be up in arms," 350.org policy director Jason Kowalski said in an interview, adding that allies of his green group already are exploring legal avenues to stop Enbridge.

Enbridge's 'interim solution'

Enbridge spokesman Terri Larson described the interconnection strategy as "an interim solution," noting via email that the company is "continuing to seek the presidential permit on Line 67" with no firm timeframe for a decision from State.

A ruling on KXL's presidential permit is expected sometime next year, though landowner resistance in Nebraska and a nationwide focus on the higher emissions footprint of oil sands crude has propelled several delays in that final decision.

Once Enbridge receives the necessary Army Corps of Engineers and state-level permits to further increase the Clipper's capacity to 800,000 bpd, the company could seek to increase the volume of heavy crude switched between its two pipelines. For the moment, however, a June 16 letter from the pipeline company's lawyers to State indicates that 75,000 extra bpd of oil sands fuel would effectively cross the border under its new approach.

Many of the same anti-KXL groups lamenting State's approval of the Enbridge plan are preparing to pull the famous oil sands crude pipeline back to the political forefont next month before President Obama addresses a U.N. climate summit. The People's Climate March, as it is known, is expected to bring thousands of environmentalist protestors to the streets of New York City.

"It's terrible timing as the president prepares to join other world leaders in NY next month," Oil Change International executive director Stephen Kretzmann said via email. "You can't approve more tar sands into the U.S. and then turn around and talk about a commitment to combating climate change with a straight face. That's simply climate denial."

Kowalski, of 350.org, added that "the only consolation we see is that fossil fuel industry is afraid of us ... they know if they go through the normal permitting process" the resulting attention would continue to drive environmentalist resistance.

Click here to read State's letter to Enbridge affirming that it can carry out its new plan without pursuing an amended presidential permit.

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