Bloomberg News

Enbridge Project’s Oil, Terrain Increase Spill Risk, Groups Say

November 30, 2011

Nov. 29 (Bloomberg) -- Enbridge Inc.’s proposed 1,172- kilometer (728-mile) Northern Gateway oil pipeline may be more vulnerable to rupture because of the type of crude it would carry and the rocky terrain it would cross, according to a study by three environmental groups.

The C$5.5 billion ($5.34 billion) project faces risks from bitumen that may be more corrosive to pipelines as well as landslides on “unstable, steep” slopes through the Rocky Mountains, according to a report released today by the Natural Resources Defense Council, Pembina Institute and Living Oceans Society.

Landslides, earthquakes and forest fires are among conditions that pipeline developers face in British Columbia, the groups said. Those conditions increase the chance of pipeline ruptures and put local ecosystems in danger of contamination, according to the report.

Enbridge, based in Calgary, is proposing to build a twin pipeline system between Alberta and the coast of British Columbia to help bring crude from oil-sands projects to market. The project, which would be mostly underground, would carry 525,000 barrels a day of crude to Canada’s West Coast and bring back liquids to dilute petroleum products for shipment.

“We are committed to constructing and operating Northern Gateway to the highest environmental and safety standards to ensure environmental protection,” Enbridge said on its project website. The company, which transports about 2 million barrels of oil a day, has “decades of experience in pipeline construction and environmental protection.”

Keystone Delay

The study highlights potential hurdles and opposition faced by Enbridge and Kinder Morgan Energy Partners LP, which are seeking new markets for Alberta’s oil sands. TransCanada Corp.’s proposed Keystone XL pipeline to U.S. Gulf Coast refineries was delayed this month after officials in Nebraska fought its route through the state.

The Northern Gateway system would cross more than 785 streams and rivers, putting commercial and recreational salmon fishing industries with a combined C$800 million in annual revenue at risk in the event of an oil spill, according to the study. Spills in marine areas threaten whales, sea lions and other animals that attract tourists.

The system’s route must also be selected to avoid landslide-prone areas because “pipelines cannot be built to withstand serious landslides,” the report concludes.

In addition, diluted bitumen from the oil sands is “more likely to cause corrosion” in pipelines because it is more acidic, thicker and more sulphuric, the groups said.

Once bitumen from the pipeline reaches the coast it would be shipped via tankers through narrow channels and “dangerous seas” where spill clean-up would be difficult, according to the study.

Canada should reject the Northern Gateway proposal because of the risks it poses to the environment, the groups said. The government should restrict further development of oil-sands pipeline projects until it can evaluate the corrosive effect of the bitumen, according to the report.

--Editors: Jessica Resnick-Ault, Tina Davis

To contact the reporter on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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