Enbridge Inc. plans to construct a link between the Alberta Clipper and an adjacent pipeline known as Line 3. By transferring oil from the Clipper to Line 3 before it crosses the border and then back again after the oil is in the U.S., Enbridge doesn’t need a U.S. presidential permit that is required for new lines.
Enbridge Inc. said it found a way to ship more Alberta oil [Ed note: the industry often use the terms Alberta oil, domestic oil, heavy crude for tar sands derived bitumen] to the U.S. that doesn’t require a review similar to the one faced by Keystone XL: switching crude from one pipeline to another before it crosses the border.
The global oil industry is gripped with the cost-cutting fever amid shareholder pressure, but the oil sands are particularly vulnerable given their baked-in higher development costs, high wages, remote location and infrastructure challenges.
The State Department, responsible for approving cross-border energy projects like the Alberta Clipper and the proposed Keystone XL line to the U.S. Gulf Coast, said in a statement that Enbridge can go forward with its plan under authority granted by previously issued permits.
The plan drew criticism yesterday from environmental groups, including the National Wildlife Federation, opposed to new imports from Canada’s oil sands because mining and processing the fuel releases more climate-warming carbon than other types of crude.
“The president’s promise to decide Keystone XL based on its climate impacts is completely meaningless if the State Department is simultaneously permitting other tar sands pipelines behind closed doors,” Sierra Club attorney Doug Hayes said in a statement.
In filings with the State Department, Enbridge said the plan was necessary to meet the needs of Alberta’s oil producers as a planned expansion of its Alberta Clipper line that requires U.S. approval is delayed.
The Calgary-based company plans to construct a link between the Alberta Clipper and an adjacent pipeline known as Line 3. By transferring oil from the Clipper to Line 3 before it crosses the border and then back again after the oil is in the U.S., Enbridge doesn’t need a U.S. presidential permit that is required for new lines.
“Very little work is required,” Terri Larson, a company spokeswoman, said.
The transfer of oil from Alberta Clipper would happen in Gretna, Manitoba, 1.5 miles (2.4 kilometers) north of the U.S. border. The oil would get transferred back about 16 miles south of the border and be transported onto Superior, Wisconsin.
The Alberta Clipper line is now operating and can carry as much as 450,000 barrels of oil a day into the U.S. In November 2012, Enbridge applied to the State Department to expand the capacity to 880,000 barrels a day. That proposal remains under a State Department review.
According to documents submitted to the department and made public this week, Enbridge considers the transfer of the oil from the Alberta Clipper to Line 3 a temporary solution until the expansion application is approved. It told the department the transfer would permit it to increase Alberta Clipper’s capacity to 570,000 barrels a day by later this year.
TransCanada Corp., another Calgary-based pipeline company, applied in 2008 to the State Department for permission to construct the Keystone XL pipeline to link Alberta’s oil sands to the U.S. Gulf Coast. The project has galvanized environmental groups who say it will worsen climate change.
The State Department’s review has been put on hold pending the outcome of a court case before the Nebraska Supreme Court challenging that pipeline’s path in that state. The court will hear the case on Sept. 5. A ruling may not come until next year.