Water concerns grow over Canada-U.S. mega oil pipe

Wed Oct 20, 2010 2:38pm EDT
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By Timothy Gardner

WASHINGTON (Reuters) - Nebraskan officials are urging the State Department to ensure a proposed $7 billion pipeline that plans to send Canadian crude to refineries along the Gulf of Mexico would avoid a massive water reservoir that irrigates agriculture in the nation's breadbasket.

Calgary-based TransCanada Corp had hoped to start building the 2,000 mile Keystone XL pipeline next year, which would send crude from the country's oil sands.

The project could bring 510,000 barrels per day of crude from one of America's closest allies to refineries in Texas and Louisiana reducing the U.S. dependence on oil from Venezuela and the Middle East.

But environmental concerns on issues such as greenhouse gas emissions from producing, refining and burning oil sands, have delayed the project.

The concern about water contamination follow recent high-profile pipeline leaks in Illinois and Michigan on Enbridge Inc ducts that deliver Canadian oil.

Nebraska's Governor Dave Heineman wrote a letter to Secretary of State Hillary Clinton that said the proposed pipeline route would run 300 miles over Nebraska and the Ogallala aquifer. The aquifer, one of the world's largest, spans eight states and yields nearly a third of the country's water used for irrigation.

"Nebraskans are concerned that the proposed pipeline route could contaminate the Ogallala Aquifer and I share that concern," Heineman wrote in a letter dated October 11, a copy of which was obtained by Reuters on Wednesday.

Nebraska's farm sales in 2008 hit $17 billion, Heineman, wrote.   Continued...