US environment regulator slams Keystone pipeline review

Mon Apr 22, 2013 10:19pm EDT
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By Timothy Gardner

WASHINGTON, April 22 (Reuters) - The U.S. environment regulator on Monday said the State Department must take a harder look at climate and other impacts of the Canada-to-Texas Keystone XL oil sands pipeline before the Obama administration issues a final decision on the project.

The Environmental Protection Agency rated the State Department's 2,000-page March 1 draft review of the TransCanada Corp pipeline project as "insufficient," in a letter to department officials as a public comment period ended on Monday.

The agency's tough stance signals that unless the State Department addresses its concerns in a final review, it could create more hurdles for a $5.3 billion dollar project which has been pending for more than four years.

Backers say the project would boost North American energy security and provide thousands of construction jobs. Opponents argue that it would lead to higher releases of greenhouse gases.

The EPA said it was concerned about carbon emissions from the oil sands that are energy-intensive to produce, and about the safety of transporting Canadian crude via pipeline following a high profile spill in a Michigan river in 2010.

There was a reminder of the threat last month when an Exxon Mobil pipeline spilled thousands of barrels of Canadian crude in Arkansas, but the EPA letter did not mention that incident.

The agency was also concerned about the State Department's conclusion that the climate would not be affected by approval of the line because rail would be a major transport alternative.

"This analysis should include further investigation of rail capacity and costs, recognizing the potential for much higher per barrel rail shipment costs," the letter said.   Continued...