TransCanada tries to ‘depressurize’ pipeline bid

TransCanada PipeLines (TSX:TCA.PR.X) is offering to lower the pressure on its proposed Keystone XL pipeline in response to plenty of the same from U.S. legislators and environmental groups.

CALGARY — TransCanada PipeLines (TSX:TCA.PR.X) is offering to lower the pressure on its proposed Keystone XL pipeline in response to plenty of the same from U.S. legislators and environmental groups.

The Calgary-based company has withdrawn an application before the U.S. State Department that would have allowed it to pump oil from Alberta’s oilsands to refineries along the Gulf of Mexico at a higher pressure than current regulations allow. Many in the United States were concerned that the higher pressure, combined with thinner steel TransCanada was proposing, would be unsafe.

“After listening to the concerns of various members of the public and also the concerns of various political leaders, we made the decision to withdraw the permit application,” said Robert Jones, TransCanada’s vice-president in charge of the project. “We’re trying to be responsive.”

Jones said the new application will still incorporate the stronger steel and other safety measures promised in the original document. )(?)

Operating the pipeline at a lower pressure will reduce the amount of oil it can deliver to Gulf refineries, Jones said, but the company will still be able to meet the needs of clients under the new proposal.

“We still can our commercial commitments.” (?)

Jones denied the change is a reaction to widespread concern over an oil leak at an Enbridge (TSX:ENB) pipeline in Michigan, which spilled 3.1 million litres of oil into the Kalamazoo River. He said the move to withdraw the permit application was being considered well before that leak.

He acknowledged that TransCanada could reapply in the future to increase pressure in the line, but he called such a possibility “speculative.”

“If we ever needed to get to the ultimate capacity, that would depend on market conditions,” Jones said. “I don’t see that happening in the foreseeable future.”

The Keystone XL bid has come under environmental fire for other reasons as well.

Last month, the U.S. Environmental Protection Agency questioned the need for the pipeline. It also said the original environmental impact assessment didn’t consider the effect of importing oilsands bitumen on U.S. climate change policies.

Such concerns have delayed the permit process by up to three months.

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