August 20, 2009 / 7:57 PM / 8 years ago

U.S. approves Alberta Clipper pipeline project

CALGARY, Alberta (Reuters) - The United States approved Enbridge Inc’s (ENB.TO) $3.3 billion Alberta Clipper pipeline project on Thursday, granting the project, which will deliver Canadian oil to U.S. refineries, a presidential permit, and raising the ire of some environmental groups.

The U.S. State Department said that allowing construction of the 450,000 barrel per day line serves U.S. interests by adding secure oil supplies from outside the OPEC nations at a time when political tensions in some producing regions threaten to interfere with oil shipments.

“The department found that the addition of crude oil pipeline capacity between Canada and the United States will advance a number of strategic interests of the United States,” it said in a statement.

The department also said construction of the line would create jobs for U.S. workers in what it called a difficult economic period.

Enbridge, which hopes to have the 1,000-mile (1,600-kilometer) line up and running by mid-2010, said it expects to begin construction soon, creating more than 3,000 U.S. jobs.

“We’re pleased we’ve reached this latest milestone and are in the process of mobilizing well over 3,000 workers and will begin construction within hours or days,” said Denise Hamsher, a spokeswoman for Enbridge.

Most of the oil shipped on the line will come from Canadian oil sands producers, which have been under attack from some U.S. environmental groups and legislators for boosting greenhouse gas emissions because of expanding production in the oil sands -- a Florida-sized region of northern Alberta that contains the largest oil reserves outside the Middle East.

The State Department said it took greenhouse gas emissions into account when deciding to issue the permit, saying that the issue is best addressed through the domestic policies of the United States and Canada and through international agreements.

However, some environmental groups said the State Department should have shown greater concern about rising greenhouse gas output, the impact of oil sands production on northern Alberta’s boreal forest, and the impact of boosting imports of a fuel that they consider to be more polluting than conventionally produced oil.

“It means large amounts of more air pollution, large amounts of water pollution and extra (greenhouse gases) because more energy is required to convert this (heavy oil) into a refined, usable petroleum product,” said Sarah Burt, a lawyer at Earthjustice. “None of that was taken into account ... in determination of whether or not this would be in the national interest. That is problematic.”

Burt said Earthjustice, a nonprofit law firm, planned to file suit next week in court in the Northern District of California asking that the State Department look at the cumulative environmental impact of building new pipelines from the oil sands. It will also seek a motion to keep Enbridge from starting construction while the case is heard.

Enbridge shares fell 39 Canadian cents to C$40.93 on Thursday on the Toronto Stock Exchange.

($1=$1.09 Canadian)

Reporting by Scott Haggett and Sue Pleming; editing by Peter Galloway

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