TransCanada Proposes Second Oil Pipeline
by Art Hovey
|Thursday, June 12, 2008
The project would connect with the Keystone pipeline already being built.
Representatives of TransCanada were expected to brief Fillmore County, Neb., commissioners Thursday on the possibility of building part of a proposed $7 billion oil pipeline through the Geneva area.
The project is meant to connect with a $5.2 billion Keystone pipeline already under construction from the oil sands region of Alberta through eastern Nebraska to delivery points in Illinois and Oklahoma.
Company spokesman Jeff Rauh stressed Monday the second project, originating in the same area in Canada and joining with the first one in Jefferson County, does not have the green light yet from TransCanada management.
However, "we do believe that this is a project that is likely to go forward. And, if it were not, we would not be taking these steps," Rauh said.
The latest proposal to bring more Canadian oil to the U.S. could offer encouraging news to drivers confronting $4 gas.
According to the most optimistic estimates, the Canadian oil sands are believed to contain oil deposits comparable to those in Saudi Arabia, but the resource must be separated from sand deposits and is more difficult to refine.
If the second pipeline proceeds, it would extend beyond Oklahoma to the Gulf Coast and Port Arthur, Texas.
As another preliminary step in Nebraska, open houses have been scheduled in five communities, including York and Fairbury, in early July.
Fillmore County Clerk Amy Nelson said the company didn't provide advance details on its presentation to commissioners in Geneva Thursday, but Rauh characterized that session and others planned with other county governments as "just to provide an overview of activities we're engaged in in their areas."
As was the case with the first project, expected to reach the full construction stage across Nebraska next year, the second carries some big numbers. Among them:
* A 1,980-mile path for a 36-inch pipe buried 4 feet under the ground from Hardesty, Alberta, to an end point near Houston, Texas.
* A permanent easement 50 feet wide entering north-central Nebraska and proceeding diagonally to Jefferson County. The clock starts ticking on the tentative construction timetable for the second project in 2010.
Rauh said contacts with communities in Nebraska and other states suggest "the developers feel comfortable about committing the resources to keep the project moving forward."
"However," he added, "it's still a possibility, given no signature on the bottom line for shippers on the project, that, until the shippers are in place, the project could fall apart."
The first project, now in the construction stage in North Dakota, is scheduled to enter Nebraska near Yankton, S.D., and to go through 10 Nebraska counties on its way south.
Peter Lidiak, director of the American Petroleum Institute's petroleum segment, said TransCanada is one of several Canadian companies strengthening its energy connection with the U.S.
"The important thing is we're looking to secure reliable supplies that provide stability in energy sources," Lidiak said from Washington, D.C. "And increased use of pipelines to bring oil from Canada, which is a close ally and a friendly country to the U.S., is just that. It produces stability and better reliability."
Lidiak said Canada is already a major supplier to the U.S. "The projections I've seen tell me that Canadian oil production could go from 1.1 million barrels (per day) to 4.4 million in 2020."
Rauh said there is no business connection between what TransCanada is doing and plans for a major oil refinery in southeast South Dakota.
However, "it's the same development of oil in Canada that has driven the need for the Keystone pipeline and the evaluation of the second project and is likely influencing the location of the refinery in South Dakota."
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