ESG & Industry Updates

Mayflower Arkansas Highlights Keystone XL Environmental Concerns

Posted by Ed Burke on Jul 30, 2013 1:33:00 PM

It's not often that specific Energy Policy issues are topics for discussion at the average American dinner table, but a notable exception to this is the Keystone Pipeline XL. From the nationally televised Presidential primaries and debates of 2012 to dinner tables around the nation, people are divided on the issue and they are definitely talking about it.

On the one hand, the percieved positives are enormous - from thousands of jobs at various skill levels to national energy security benefits from importing oil from Canada versus say Venezuela, Nigeria, etc. On the other hand are those with serious environmental concerns, the largest of which is the potential for spills or pipeline leaks that could devastate environmentally sensitive areas. Several incidents this year have intensified environmental objections, perhaps the most significant being the Mayflower Arkansas spill caused by a rupture in the Pegasus pipeline. The Pegasus, built in 1940, runs 850,000 miles across the United States - it was reversed in 2006 to carry 95,000 barrels of crude to Texas from Illinois.

One of the contentions regarding the pipeline rupture that has relevance to both sides of the Keystone Project has to do with the conclusions reached by the investigation of the event. It was determined that an original manufacturing defect contributed to the rupture, meaning it was not a maintenance or corrosion issue that could have been forseen and prevented. Why is that important?

The Pegasus was built in the 1940s. The Keystone, proponents argue, will be manufactured and built with today's cutting edge technologies and will actually exceed recommended requirements for safety issued by the federal government. It will be the safest and most technologically advanced pipeline in existence. 

Opponents argue that a reason for the rupture in the Pegasus may be tied to the fact that the pipeline was designed to handle standard crude oil, not the "oil sands" crude that has a different composition. They argue that the composition of "oil sands oil" is a factor in safety and that the Mayflower spill illustrates that standards used for light sweet crude are not sufficient to ensure safety. Essentially - if those same standards are those being used to model the Keystone XL, they will not be sufficient to ensure that a disaster like this does not occur going forward.

Additionally the issue has been clouded with arguments for alternative energy sources versus "expanding dependence on oil" - some opponents see the pipeline as an issue not for its immediate environmental concerns per se, but as an issue of the US continuing down the 'wrong path' in continuing to focus on fossil fuel derived energy sources versus alternatives.

Representative (now Senator) Ed Markey (D- MA) stated that "The pipeline spill in Arkansas serves as a reminder that oil companies aren't doing a good job of transporting Canadian crude safely". What ought to be the focus moving forward on discussion, in my opinion, is a thoughtful consideration of both sides of the concern to get a true cost-benefit analysis, versus the stubborn "side taking" that seems to characterize the issue in Washington presently. While Ed Markey has a valid point, so does the CEO of TransCanada looking to expand the Keystone XL. He said, "The US needs 10 million barrels a day of imported oil. The proposed pipeline is not a question of oil versus alternative energy. It is a debate about whether you want to get your oil from Canada or Venezuela"  

 

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Topics: Mayflower, Pegasus Pipeline, Keystone XL

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