Gulf Coast pipeline complete

TransCanada, government officials celebrate milestone in Beaumont

Marking a milestone for the Keystone Pipeline System, on Jan. 22, TransCanada announced that the Gulf Coast Project, a 487-mile leg of the Keystone Pipeline beginning in Cushing, Okla. and ending locally in Nederland, began delivering crude oil to Texas refineries.

At Ford Park on Feb. 26, TransCanada CEO and President Russ Girling, along with Canadian Consul General Paula Caldwell St-Onge and Texas Railroad Commission Chairman Barry Smitherman, visited Beaumont to celebrate the endeavor’s completion, a giant step forward for the much-anticipated and controversial Keystone project. 

After four years of intense scientific and regulatory scrutiny and more than 15,000 pages of environmental reviews, TransCanada proudly announced that the Gulf Coast Project, touted by the company as “the safest pipeline ever built on U.S. soil,” has begun delivering crude oil from Cushing, Okla., to state-of-the-art refineries in Texas on behalf of TransCanada customers. The completion of this $2.3-billion crude oil pipeline provides a direct connection between the important oil hub in Cushing and delivery points on the U.S. Gulf Coast.

“This is a very important milestone for TransCanada, our shippers and Gulf Coast refiners, who have been waiting for a pipeline to supply crude oil directly from Cushing,” said Girling. “This project is a critical, modern piece of American energy infrastructure that allows producers to safely connect growing production with the world’s most efficient refiners on the U.S. Gulf Coast. It also provides those American refineries the opportunity o use more of the crude oil produced in both Canada and the United States for decades to come.”

Construction of the 487-mile crude oil pipeline involved more than 11 million hours of labor, completed by 4,844 workers from across the United States on more than 50 contracts with manufacturers, equipment suppliers and companies building the pipeline. It also includes the addition of 2.25 million barrels of new crude oil storage capacity at Cushing.

"The workers who helped build this project are in addition to 8,969 men and women who constructed the initial Keystone Pipeline system, and we are waiting for approval of Keystone XL so we can employ more than 9,000 more Americans who are waiting to put their skills and experience to work,” added Girling.

The Gulf Coast Project not only meant jobs for the men and women who worked on what TransCanada is calling a world class infrastructure project, but it also had a considerable economic impact on the communities along the route. The project gave local businesses a boost in sales, and provided opportunities for growth and community investment, according to TransCanada and local businessmen.

At the celebratory luncheon, Jefferson County Judge Jeff Branick acted as master of ceremonies. Branick also expressed thanks to TransCanada on behalf of Jefferson County for the positive impact he believes the “extremely important” endeavor has had and will continue to have on the area economy.

Branick also read a letter from Beaumont Mayor Becky Ames, who was unable to attend the event. In the letter, Ames congratulated TransCanada for completing the Gulf Coast Project, adding that the petrochemical industry is “critical” to the economy of Southeast Texas.

“We couldn’t be more proud to support this important project,” Ames wrote.  

Calvin Harlan, TransCanada tribal liaison and an enrolled member of the Omaha Tribe instrumental in developing the business relationship between the Alabama Coushatta Tribe and TransCanada, gave a blessing in his tribe’s traditional language and then translated the prayer into English. Harlan acted as a tribal monitor, answering any questions the group posed regarding the pipeline and its effects on the surrounding areas. According to TransCanada, its process of reaching out to a tribe is treated as a priority. For example, if a project crosses a sacred area or a tribe has a specific interest in an area, TransCanada works with the tribe to mitigate potential impacts, according to information provided by the company.

Texas Railroad Commission Chairman Barry Smitherman addressed the group and talked about the instability of many oil-producing regions from which Texas refineries and others import oil. He mentioned Venezuela, one of the top five exporters to the United States every year, and its current political uproar with protests turning destructive and deadly.

“Like I’ve said for many years,” Smitherman said, “I would rather do business with Canada than Venezuela.”

Smitherman said that safety is another aspect he considered when throwing his support behind the pipeline. Although he is a railroad man, he said shipping certain material via rail is just not stable.

“Moving liquid petroleum via pipeline is safer than by rail,” he said.  

Kenneth Edwards, Pipefitters Local Union No. 211 District 3 vice president, touted TransCanada’s training of welders on the project and for the “minimal environmental impact” the project would have along the pipeline.

“According to the envirnmental impact statement, (moving oil via pipeline) will have a smaller environmental impact than shipping in tankers or rail cars,” Edwards said. “Not to mention tankers and rail cars have a 9 to 10 percent higher explosion risk than pipelines.”

Canadian Consul General St-Onge echoed Smitherman’s sentiments regarding instability in other oil-producing regions and potential “disruption” in oil production.

“Every North American’s energy future is more secure,” she said in relation to the completion of the Gulf Coast Project and its ability to deliver 700,000 to 800,000 barrels a day to Gulf Coast refineries.

“To date, since 2010, the Keystone Pipeline has delivered 560 million barrels of crude oil,” Girling announced at the gathering.

Girling said he was “frustrated” by opposition to the project based on environmental and economic concerns.

In an interview with The Beaumont Business Journal, the TransCanada CEO and president talked about safety protocols in place to prevent potential disasters when emergencies inevitably arise, the economic impact of the project, and he addressed concerns about the effects a Nebraska court ruling could have on the Keystone Pipeline System.

Girling said the pipeline is monitored on a “second-by-second” basis through satellite imaging. Pressure changes are monitored at control facilities, and anytime there is a change in pressure, the affected section of the pipe is shut down immediately. In addition to advanced technological measures in place to prevent leakage and stop leaks if they do happen, safety personnel actually “walk the line,” physically observing the area. If something does go wrong, area first responders have all been provided with safety protocols from TransCanada and will have all the specifics regarding what needs to be done in the event of an emergency.

“If you do have an emergency, in my experience, those people are ready,” Girling said of first responders.

Regarding the economic impact the project could continue to have on Southeast Texas, Girling said he believes it will be “profound.”

“It’s hard to quantify the benefits to the community,” Girling said. 

He explained that with such a monumental project, not only will construction jobs be created, but also service jobs. Hotels, restaurants, retail stores and other local businesses will see money roll down from project workers into their pockets. And city governments will benefit from tax revenues, he said.

“Significant tax revenues will be generated from these communities for decades to come; they are ongoing payments,” said Girling. “What we find is that, in these communities, we become the largest taxpayers. That’s what supports the local school districts, teachers’ jobs, the local hospitals, the road construction — those are the spin-off benefits. And this is a $2.5 billion piece of equipment that needs to be maintained, so there are more jobs there.”

Exactly one year before TransCanada announced the completion of the Gulf Coast Project, on Jan. 22, 2013, Nebraska Governor Dave Heineman approved the corporation’s proposed route for the Keystone XL Pipeline through the state. On Feb. 19 of this year, District Judge Stephanie F. Stacy struck down a law, Nebraska Legislative Bill 1161, allowing the governor to approve the route, calling the statute “unconstitutional.” The attorney general has appealed that ruling.

According to Girling, the ruling should not affect the Gulf Coast Project leg.

“We’ve had a number of lawsuits and challenges with the pipeline, and this is just the latest,” Girling said. “We work our way through it. In this case, it is not an issue with TransCanada. It is an issue with the legislature of Nebraska and the courts in Nebraska. ... I think the statute is very clear, and that the law is in full force. LB 1161 is still in full force and effect, which means that the project continues and the Department of State still continues their review of the pipeline.”

He said if necessary, they will make a change to a “different process” in Nebraska. He said the Nebraska Department of Environmental Quality approved the route, and the environmental review has been done.

“If we have to go through some other process, we will,” he said. “They just need to tell us what needs to be done.”

He said there are no plans to move the pipeline away from the proposed route or location. He added that rumors that TransCananda would divert the pipeline and ship their product from the Pacific Coast to China or ship to China from the Gulf Coast are “ludicrous.”

“Canada’s largest export market for energy has been the United States,”Girling explained. “Ninety-nine percent of our exports of energy have been to the United States through the North American Free Trade Agreement. That has been called into question, from the Canadian government prospective.Their view is we can no longer rely 100 percent on that. The U.S. is still our most important market, but you can’t put all your eggs in one basket, so it needs to look for alternative markets and it will. But our project to the Gulf Coast is not one of those. That is to supply our biggest and most important trading partner, which is the United States.”

He said the Gulf Coast will still be importing 3.5 to 4 million barrels a day in addition to the 700,000 to 800,000 barrels they ship.

“Those who are opposed to our project claim that it is a through-conduit to export to China,” said Girling. “That is the most ludicrous thing. All of this oil will go to Gulf Coast refineries to feed Gulf Coast refineries.”

He said the 560 million barrels already shipped through Keystone to the United States “displaced” the same amount of oil that could have been imported from Venezuela.

Girling added that the delays on the Keystone XL Pipeline project have been detrimental.

“The delay has just created more greenhouse gas emissions, exposed the public to greater safety risks; we’ve been denied the ability to put people to work and we’re still importing more oil from places that aren’t as friendly. So the delay hasn’t been a win, even for the environmental groups. That’s the frustrating part. Nobody’s winning.”

He said he is proud of the project and is committed to TransCanada’s relationship to the United States.

“The Keystone Project is in the best interest of the United States,” Girling concluded. “It is a good project for America and for Americans themselves."