May 28, 2014

Keystone pipeline construction defects stir worry

U.S. safety regulators add requirements regarding the pipeline’s construction after learning of potentially dangerous construction defects.

Safety regulators have quietly placed two extra conditions on construction of TransCanada Corp.’s Keystone XL oil pipeline after learning of potentially dangerous construction defects involving the southern leg of the Canada-to-Texas project.

The defects — high rates of bad welds, dented pipe and damaged pipeline coating — have been fixed. But the federal Pipeline and Hazardous Materials Safety Administration wants to make sure similar problems don’t occur during construction of the pipeline’s controversial northern segment, which is on hold pending a decision by the Obama administration.

One condition requires TransCanada to hire a third-party contractor chosen by the safety agency to monitor the construction and make reports to the U.S. government on whether the work is sound.

The second requires TransCanada to adopt a quality management program to ensure “this pipeline is — from the beginning — built to the highest standards by both Keystone personnel and its many contractors.”

The new conditions were added four months after the agency sent TransCanada two warning letters last year about defects and other construction problems on the Keystone Gulf Coast Pipeline, which extends from Oklahoma to the Texas Gulf Coast.

Over 72 percent of welds required repairs during one week. In another week, TransCanada stopped welding work after 205 of 425 welds required repair.

Inspections by the safety agency found that TransCanada wasn’t using approved welding procedures to connect pipes, the letter said.

TransCanada spokesman Davis Sheremata cautioned against drawing a connection between construction problems found on the southern leg between Cushing, Okla., and Nederland, and conditions placed on the northern leg, which will extend from Alberta, Canada, to Nebraska’s southeast corner.

“TransCanada had identified and addressed these issues prior to any product being introduced into the pipeline and reported them voluntarily” to the government, Sheremata said.

But energy analyst Kevin Book said the timing “would seem to suggest [the pipeline safety agency] was uncomfortable with the construction of Keystone south and that was part of their reasoning” for imposing additional conditions on the northern leg.

Agency spokesman Damon Hill said the additional conditions were the result of “observations in the field during construction projects from several pipeline operators over the past few years,” as well as the agency’s general knowledge and experience.

Keystone is intended to transport oil from Canadian tar sands to oil refineries on the Gulf Coast.

The project has become a major flashpoint alongside the larger debate over carbon emissions, drilling policies and tax breaks for energy companies.

The administration said in April that it was postponing indefinitely its decision on whether to approve the pipeline. A decision now isn’t expected until after the November elections.

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