Trans Mountain CEO says pipe construction could restart in 2019 on NEB timeline

CALGARY — The president and CEO of Trans Mountain Corp. says its sidelined pipeline project could be back on track by next year under a new National Energy Board hearing schedule, setting it up for a possible 2022 opening date.

The timeline unveiled by the federal pipeline regulator on Wednesday is “reasonable and fair,” said Ian Anderson, the former CEO of Kinder Morgan Canada who became head of the resulting Crown corporation when Ottawa closed its $4.5-billion purchase of the pipeline and its expansion project in early September.

He told reporters in Calgary it’s possible construction that was halted when the Federal Court of Appeal overturned the expansion project’s NEB approval in late August could be restarted in 2019.

“Sure, it’s possible,” he said. “If things go according to the timeline that’s been now started with the NEB and they have a recommendation by the middle of February and the government takes a few months for additional consultation, an order-in-council could be as early as next summer.”

He added construction is expected to take about 30 months, depending upon seasonal adjustments, which would mean the pipeline could be operational in 2022, about two years later than the most recent predicted in-service date.

The federal government approved the Trans Mountain expansion project in November 2016, following a recommendation by the NEB.

But the court cited insufficient consultation with Indigenous communities and a failure to assess the environmental impact of additional oil-tanker traffic in overturning that ruling.

Last week, the federal government ordered the NEB to go back and conduct a review of tanker traffic, paying special attention to the affect on killer whales, and issue its report no later than Feb. 22.

Environmentalists were quick to criticize the NEB’s schedule, which calls for public comments by next Wednesday on draft factors for the environmental assessment, the draft list of issues to be considered in the hearing and on the design of the hearing process itself.

Indigenous groups who are affected by the marine shipping issues but weren’t allowed to engage in the previous NEB process because of scope limits might have a difficult time preparing submissions in time, said Keith Stewart, senior energy strategist with Greenpeace Canada.

“Indigenous consultations are inextricably intertwined with review of marine impacts — orcas have important cultural significance — so charging ahead on this before sorting out the Indigenous consultation piece seems like a mistake,” he added.

Furthermore, the process is tainted by the fact that the government insists the project it now owns will be built no matter what, Stewart said.

The expansion will include a new pipeline running roughly parallel to the existing, 1,150-kilometre line that carries refined and unrefined oil products from the Edmonton area to Burnaby, B.C.

It will nearly triple the capacity to 890,000 barrels a day.

The NEB named Lyne Mercier, Alison Scott and Murray Lytle to the panel that will conduct its reconsideration of the project.

The Canadian Press

[SOURCE]

 

 

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Trans Mountain pipeline approval quashed by Federal Court of Appeal


Kinder Morgan shareholders approve the sale of the project to Ottawa with 99% support less than an hour after the ruling

The Federal Court of Appeal dealt the Trans Mountain expansion project a major setback Thursday, ruling the government of Canada had not fulfilled its duty to consult with First Nations on the pipeline from Alberta to British Columbia.

The decision means the National Energy Board will have to redo its review of Kinder Morgan Canada’s project. In a written decision, the court says the energy board’s review was so flawed that the federal government could not rely on it as a basis for its decision to approve the expansion.

The court also concludes that the federal government failed in its duty to engage in meaningful consultations with First Nations before giving the green light to the project. That decision means the government will have to redo part of its consultations with Indigenous groups.

The judge wrote that “the consultation framework selected by Canada was reasonable and sufficient. If Canada properly executed it, Canada would have discharged its duty to consult.”

“However, based on the totality of the evidence I conclude that Canada failed in Phase III to engage, dialogue meaningfully and grapple with the concerns expressed to it in good faith by the Indigenous applicants so as to explore possible accommodation of these concerns,” the ruling states.

The Trans Mountain expansion would add shipments of 590,000 barrels of oil per day from Alberta to British Columbia by twinning an existing pipeline at an expected cost of $7.4 billion.

Kinder Morgan shareholders approved the sale of the pipeline with more than 99 per cent support Thursday, less than an hour after the federal government learned the pipeline construction permits had been quashed.

“No matter who owns this pipeline and tanker project, it will be stopped,” president of the Union of B.C. Indian Chiefs and Grand Chief Stewart Phillip said in a release.

“Kinder Morgan executives recognized Justin Trudeau’s desperation to placate the oil lobby and are exiting the project with massive profits on the backs of Canadian taxpayers,” he said.

The Federal Court decision will effectively compel the NEB to repeat the third phase of its consultation process, which it carried out between February and November, 2016.

The NEB has not taken marine traffic implications into account in its prior decisions.

The regulator had argued that “since marine shipping was beyond its regulatory authority, it did not have the ability to impose specific mitigation conditions to address environmental effects” of increased marine traffic.

In recent years the NEB has been hobbled by broader questions about what should be the scope of its approval process. Last year, TransCanada Corp. halted its Energy East project after the NEB unexpectedly announced it would include downstream emissions in its environmental review of the pipeline.

Source: Financialpost.com

Montana judge orders review of TransCanada’s Keystone XL pipeline route

Pipeline construction image. TransCanada

In setback for TransCanada, judge orders environmental review of Keystone XL pipeline revised route

(Reuters) – A federal judge in Montana has ordered the U.S. State Department to do a full environmental review of a revised route for the Keystone XL oil pipeline, possibly delaying its construction and dealing another setback to TransCanada Corp.

For more than a decade, environmentalists, tribal groups, and ranchers have fought the $8-billion, 1,180-mile (1,900-km) pipeline that will carry heavy crude to Steele City, Nebraska, from Canada’s oilsands in Alberta.

U.S. District Court Judge Brian Morris ruled late on Wednesday for the Indigenous Environmental Network and other plaintiffs, ordering the review of a revised pipeline route through Nebraska to supplement one the State Department did on the original path in 2014.

The State Department was obligated to “analyze new information relevant to the environmental impacts of its decision” to issue a permit for the pipeline last year, Morris said in his ruling.

Supporting the project are Canadian oil producers, who face price discounts over transport bottlenecks, and U.S. refineries and pipeline builders.

TransCanada is reviewing the decision, company spokesman Matthew John said. It hopes to start preliminary work in Montana in the coming months and to begin construction in the second quarter of 2019.

The company said this month it expects to make a final investment decision late this year or in early 2019.

The ruling is negative for TransCanada, since it adds uncertainty to timing, said RBC analyst Robert Kwan, and it was important that the pipeline be constructed during the current U.S. presidential cycle.

President Donald Trump is keen to see the building of the pipeline, which was axed by former President Barack Obama in 2015 on environmental concerns relating to emissions that cause climate change.

The White House did not respond to a request for comment. The State Department is reviewing the court’s order, a spokesman said.

The ruling was “a rejection of the Trump administration’s attempt to … force Keystone XL on the American people,” said Jackie Prange, a lawyer for the Natural Resources Defense Council, an environmental group.

Trump pushed to approve the pipeline soon after he took office, and a State Department official signed a so-called presidential permit in 2017 allowing it to move forward.

However, Morris declined the plaintiff’s request to void that permit, which was based on the 2014 review.

Last year, Nebraska regulators approved an alternative route for the pipeline, which will cost TransCanada millions of dollars more than the original path.

In a draft environmental assessment last month, the State Department said Keystone XL would not harm water supplies or wildlife. That review is less wide-ranging than the full environmental impact statement Morris ordered.

By Reuters 

[SOURCE]

 

Coke, Meth and Booze: The Flip Side of The Permian Oil Boom

Oil rig hands work on the floor of an oil and gas drilling rig in the Permian Basin near Farmington, New Mexico. (Image Encana Corp)

The fastest-growing oil region in the US is fueling not only the second American shale revolution—it’s fueling a subculture of drug and alcohol abuse among oil field workers.

The Permian shale play in West Texas is once again booming with drilling and is full of oil field workers, some of which are abusing drugs and alcohol to help them get through long shifts, harsh working conditions, and loneliness and isolation.

Drugs are easily accessible in the Permian, which is close to highways and to Mexico. For oil field workers making six-figure salaries, money is not a problem to buy all kinds of illegal substances to shoot, snort and swallow to get through 24-hour-plus shifts. The physically exhaustive work also sometimes causes aches for workers, making them susceptible to getting hooked on prescription painkillers.

The drug and alcohol abuse subculture in the Permian is a known—yet rarely reported or discussed—issue in the most prolific US shale play, where oil production is booming, and relentless drilling attracts oil field workers from all over Texas and all parts of the United States.

In Midland, in the very heart of the Permian oil boom, The Springboard Center—a drug and alcohol addiction treatment facility—has many clients from the oil fields, Christopher Pierce, director of marketing for center, tells Rigzone’s Valerie Jones in an interview.

“We get a lot of clients who work in the oilfield because of where we’re located,” says Pierce, 35, a former oil field worker, and a former addict.

Pierce and The Springboard Center in Midland are now working on building a gated living camp community free of drugs or alcohol for people who want to be in a safe place.

Oil workers are not speaking up at work about their addiction for fear of getting fired, Pierce said, adding that he doesn’t have anything negative to say about the oil industry, which is the backbone of the economic growth in the Permian.

Some oil field workers and contractors use drug cocktails or various substances depending on the condition they seek to achieve during their 24-hour-plus shifts. At the beginning of a long or overnight shift, they would use ‘uppers’ like cocaine and methamphetamines, and finish the shift with ‘downers’ such as prescription medication or alcohol, Kayla Fishbeck, regional evaluator for Prevention Resource Center Region 9, a data repository for 30 counties in West Texas, told Rigzone.

“In Region 9, the most screened drug last year was amphetamines and that was largely in the oilfield,” she said.

Thanks to the oil boom, the unemployment rate in Midland is at a record low 2.1 percent, and the unemployment rate in Odessa is also a historically low of 2.8 percent.

According to Fishbeck, Midland and Odessa are the top two Texas cities for drunken-driving fatalities.

“We hear stories of guys getting off their shift, getting a six-pack or 12-pack on their way home and start drinking in their truck,” Fishbeck told Rigzone.

The Permian’s drug of choice is crystal meth, a stimulant increasingly supplied by Mexican drug cartels, according to law enforcement officials who spoke to the Houston Chronicle in May.

There is a strong correlation between the rise of drilling activity and the number of crystal meth seizures by authorities in the Permian area, Houston Chronicle’s cross-analysis of data from the Texas Department of Public Safety and the rig count shows.

Eddy Lozoya, a former oil field trucker and a recovering addict at 23, has recently found a job at a local department store selling shoes. At least for the next few months, he doesn’t plan to return to the oil field.

“I don’t see myself being able to work 100 hours a week sober,” he told the Houston Chronicle. “The oil field is tough.”

This article was originally published on Oilprice.com

[SOURCE]

Failure to find buyer makes Federal government sole owner of Trans Mountain pipeline

Kinder Morgan sold the Trans Mountain Pipeline to the Government of Canada.

The federal government is set to become the official owner of the Trans Mountain pipeline expansion after failing to quickly flip the project to another private-sector buyer.

Pipeline owner Kinder Morgan had been working with the government to identify another buyer before July 22.

But with that date set to pass without a deal, it was expected the pipeline company will now take Ottawa’s $4.5-billion offer to purchase the project to its shareholders.

The government had previously indicated that there were numerous groups interested in purchasing the controversial project, including pension funds and Indigenous groups.

Finance Minister Bill Morneau’s spokesman, Daniel Lauzon, said Ottawa still intends to sell the pipeline, if and when a suitable partner is identified and it’s in the best interests of Canadians.

“We have no interest in being a long-term owner of a pipeline, but we will be the temporary caretaker,” Lauzon told The Canadian Press on Sunday. “We won’t rush that.”

News of the failure to find another partner by July 22 came one day after protesters opposed to the Trans Mountain expansion took to Parliament Hill in hazardous-materials suits and carrying a fake pipeline.

It was the latest in a string of such rallies by environmental and Indigenous groups, which also included the erection of a similar cardboard pipeline outside the Canadian High Commission in London in April.

Lauzon on Sunday defended the decision to purchase the pipeline, saying the project, whose aim is to get Canadian oil to Asian markets, remains in the national interest.

The Trans Mountain expansion will build a new pipeline roughly parallel to the existing, 1,150-km line that carries refined and unrefined oil products from the Edmonton area to Burnaby, B.C.

It will nearly triple the line’s capacity to 890,000 barrels a day. Trans Mountain is the only pipeline carrying Alberta crude to the West Coast and the hope is that most of the oil will end up in tankers bound for Asia.

Ottawa approved the expansion project in November 2016 and British Columbia’s then-Liberal government followed suit two months later.

But four months after that, the provincial Liberals were replaced by the NDP under John Horgan, who has a coalition of sorts with the Green party that includes an agreement to oppose the expansion in every way possible.

The federal government has said its hand was forced by Horgan, who has gone to court for judicial approval to regulate what can flow through the pipeline — a measure of opposition that made Kinder Morgan Canada, the project’s original owner, too nervous to continue.

The company halted all non-essential spending on the pipeline expansion in April pending reassurances from Ottawa that the project would come to fruition.

The federal government had said Canada would cover any cost overruns caused by B.C.’s actions, but in the end that wasn’t enough.

Following the government’s announcement that it planned to purchase the pipeline, Kinder Morgan agreed to start construction this summer as planned.

Lee Berthiaume, The Canadian Press

[SOURCE]

TransCanada to move materials, prep sites for Keystone XL

TransCanada stockpiling pipe south of Shaunavon for the Keystone XL pipeline, July 8, 2011. Photo By BRIAN ZINCHUK

PIERRE (AP) — The Keystone XL oil pipeline developer said in a letter this week to a Native American tribal chairman that the company will start moving materials and preparing construction sites for the project in Montana and South Dakota.

TransCanada Corp. said in the letter to Cheyenne River Sioux Chairman Harold Frazier, of South Dakota, that the work would start in July and go through the fall. The chairman on Thursday tweeted copies of TransCanada’s message and his response on the tribe’s letterhead: “We will be waiting.”

Frazier wasn’t immediately available on Friday to comment to The Associated Press. Keystone XL faces intense resistance from environmental groups, Native American tribes and some landowners along the route.

The project would cost an estimated $8 billion. The 1,179-mile pipeline would transport up to 830,000 barrels a day of Canadian crude through Montana and South Dakota to Nebraska, where it would connect with lines to carry oil to Gulf Coast refineries.

TransCanada spokesman Terry Cunha said in an email that the preparatory work will ramp up over the year to position TransCanada for construction in 2019. He said it would include moving pipe and equipment to start clearing activities to prepare for getting final permits and approvals for construction.

But the project faces legal hurdles. Nebraska landowners have filed a lawsuit challenging the Nebraska Public Service Commission’s decision to approve a route through the state.

A separate federal lawsuit brought by Montana landowners and environmental groups seeks to overturn President Donald Trump’s decision to grant a presidential permit for the project, which was necessary because it would cross the U.S.-Canadian border.

South Dakota’s Supreme Court in June dismissed an appeal from pipeline opponents — including the Cheyenne River Sioux — of a judge’s decision last year upholding regulators’ approval for the pipeline to cross the state.

By Associated Press

[SOURCE]

Minnesota Public Utilities Commission Approves Enbridge’s Line 3 Replacement Project

According to Enbridge, the multibillion-dollar Line 3 replacement represents the largest project in the company’s history. Here, contractors work near Superior, Wis. MPR News

Minnesota regulators have approved Enbridge’s proposal to replace its Line 3 pipeline across the northern part of the state.

According to media reports, the Minnesota Public Utilities Commission unanimously approved the $9-billion Enbridge Line 3 replacement project on Thursday afternoon.

MPR News says the decision came with several conditions, including a decommissioning trust fund to ensure the new pipeline will be retired responsibly decades from now. Enbridge will also be required to follow through on a promise to landowners to remove portions of the old Line 3 upon request.

The Globe and Mail reports, a narrow 3-2 decision approved Enbridge’s preferred route for the pipeline, south of the existing corridor, with only slight modifications, meaning the company dodges the potential for lengthy delays and added costs of alternatives.

Indigenous tribes and environmental groups vowed immediately to appeal the decision and maintain their resistance to the project.

In a sign of potential clashes ahead, the commission was interrupted midway through Thursday’s deliberations in St. Paul, Minn., by shouts that it had “declared war on the Ojibwe.”

Native american activists and environmentalists oppose the project, saying it’s unnecessary and would risk spills in pristine areas of the state.

Line 3 also requires 29 additional permits from local, state and federal levels, Minnesota Governor Mark Dayton said in a statement. “Approvals are by no means assured,” he said.

Appeals of the commission’s decisions go to the Minnesota Court of Appeals.

The Minnesota Legislature also could intervene when it reconvenes next year. Dayton vetoed a bill last session that would have let Enbridge bypass the commission and proceed with replacing Line 3. But voters will elect a new governor and a new Legislature in November.

The total length of the Line 3 replacement is 1,031-mile (1,660-km) from Alberta in western Canada to Wisconsin.

Estimated 230,000 gallons of crude oil spills into Iowa river after Train derailment 

Tanker cars carrying Alberta crude oil are shown derailed in Lyon County, Iowa, Friday. (Photo Sioux City Journal via AP)

Train carrying tanker cars of tar sands oil from Alberta to Oklahoma derails along flooded Iowa river

A train derailment has spilled an estimated 230,000 gallons of Alberta crude oil into the floodwaters of the Rock River, in Iowa, resulting in a disaster declaration from the governor and a massive clean-up operation.

The train derailed around 4:30am Friday, near Doon, in Lyon County. There were no injuries.

Oil spilled into the river after 32 tanker cars derailed. The train’s operator BNSF said 14 of the derailed cars had leaked oil, according to Lyon County Daily News.

The derailment forced evacuations of nearby homes and raised concerns about drinking water contamination. Rock Valley, a small city just to the southwest of Doon shut off all its drinking water wells.

Crews spent Saturday containing the spill and building a temporary road to move equipment to the crash site to make it easier to remove the piled-up train cars and advance the cleanup, the Sioux City Journal reported.

Crews work to clean up the BNSF railway after a 32-car derailment along banks of the Rock River south of Doon, Iowa.

BNSF spokesman Andy Williams said the cleanup and recovery were still in the early stages.

A disaster proclamation issued by Iowa Gov. Kim Reynolds for Lyon and three other counties in response to the train derailment placed the blame on rain-fueled flooding.

The nearby Little Rock River rose rapidly after heavy rain Wednesday and Thursday. The Little Rock River flows into the Rock River which caused overflow on its banks along the route of the train tracks.

Some officials have speculated that floodwaters eroded soil beneath the train track. The cause has not been confirmed.

According to The Associated Press, the train was carrying tar sands oil from Alberta, to Stroud, Oklahoma, for ConocoPhillips. ConocoPhillips spokesman Daren Beaudo said each tanker can hold more than 25,000 gallons (20,817 imperial gallons) of oil.

CTV News is reporting almost half of the oil spill – an estimated 100,000 gallons (378,530 liters) – has been contained at the site using booms close to the derailment site. An additional boom has been placed about five miles (8.05 kilometers) downstream.

BNSF did not respond to questions on Sunday about the progress of the cleanup.

The Sioux County Sheriff posted a video depicting the aftermath of the derailment near Doon on Facebook:

Spill at Trans Mountain pipeline station in B.C. larger than initially reported

A spill from Kinder Morgan’s Trans Mountain pipeline late last month was 48 times larger than initially reported, officials said.

The spill volume reported from the company’s Darfield station north of Kamloops on May 27 was revised to 4,800 litres from 100 litres, the B.C. Ministry of Environment said Sunday.

It said 100 litres is the minimum threshold under the company’s spill reporting obligations, so that’s why the ministry estimated 100 litres at the time.

Trans Mountain spokeswoman Ali Hounsell said the company didn’t tell regulators how much medium crude oil escaped at the time of the spill.

“Trans Mountain had not provided an estimate of the volume spilled, other than to confirm with regulators that it was over the reportable threshold, until cleanup had sufficiently progressed to a stage where an accurate estimation could be provided,” she said in an e-mail.

Following an on-site investigation, she said Trans Mountain has provided the updated volume estimate to regulators.

Trans Mountain is in the final stages of completing the cleanup, she said.

Under British Columbia’s spill reporting regulation, Trans Mountain was required to report the spill immediately. The regulation says the quantity spilled should be among the information included in that report, “to the extent practical.”

The company turned off the pipeline for several hours the day of the spill, which the ministry said came from a leaking flow metre.

The spill was contained to the station property and no waterways were affected, the ministry said.

Two days later, Prime Minister Justin Trudeau announced the federal government will spend $4.5-billion to buy the Trans Mountain expansion and Kinder Morgan Canada’s core assets.

Kinder Morgan had ceased all non-essential spending on the Trans Mountain expansion in April, vowing to cancel it unless it received assurances it can proceed without delays and without undue risk to shareholders by a deadline of May 31.

After the federal government’s announcement, the company said work would be restarted soon, with the government funding construction. The sale is expected to close in the second half of the year.

The Canadian Press

[SOURCE]

Liberal government to buy Kinder Morgan’s Trans Mountain pipeline for $4.5 billion

Finance Minister Bill Morneau arrives at the National Press Theatre in Ottawa on Tuesday, May 29, 2018.

The Federal Liberal government is spending $4.5 billion to buy the Trans Mountain pipeline from Kinder Morgan.

The deal includes all of Kinder Morgan Canada’s core assets. The purchase ensures that the Trans Mountain pipeline, which carries oil from Alberta to the west coast of British Columbia will begin a planned expansion this summer.

According to CBC News, Finance Minister Bill Morneau announced details of the agreement reached with Kinder Morgan at a news conference with Natural Resources Minister Jim Carr this morning.

Morneau said the project is in the national interest, and proceeding with it will preserve jobs, reassure investors and get resources to world markets. He could not say exactly what additional costs will be incurred by the Canadian public to build the expansion, but suggested a toll paid by oil companies could offset some costs and that there would be a financial return on the investment.

The purchase price does not include the construction costs of the Trans Mountain expansion so the final bill to Canadian taxpayers will be significantly higher once labour and materials are included.

Kinder Morgan had estimated the cost of building the expansion would be $7.4 billion, but Morneau insisted that the project will not have a fiscal impact, or “hit.”

Alberta will also provide emergency funding to cover unforeseen costs.

The government does not intend to be a long-term owner, and at the appropriate time, the government will work with investors to transfer the project and related assets to a new owner or owners.

However, Kinder Morgan will be paid regardless of whether a new suitor is found.

Until then, the pipeline project will proceed under the ownership of a Crown corporation.

The agreement, which must still be approved by Kinder Morgan’s shareholders, is expected to close in August.