Wednesday, February 8, 2012

Keystone XL ships oil despite permit denial

TransCanada is already shipping close to 100,000 barrels of crude oil per day to the Cushing storage and trading hub regardless of President Barack Obama's denial of the Keystone XL Pipeline permit two weeks ago, according to reports.

Energy information service Genscape estimated that 18% of the oil moving through the Keystone last month went to Cushing, the largest US terminal and trading hub about 60 miles west of Tulsa, according to Bloomberg.

The Keystone XL's 300-mile leg from Steele City, Nebraska to Cushing has been in operation since last March.

‘I'm not sure if that by itself is significant, but what interests me is the point that plenty of Canadian oil already is flowing to Cushing via a Keystone line, while environmentalists are attacking the perceived danger of the XL,’ says Norm Szydlowski, CEO of SemGroup and Rose Rock Midstream - two companies that have significant terminal and pipeline assets in and around the hub.

President Barack Obama blocked the TransCanada permit to build the Keystone XL leg from the Canadian border to Steele City, citing potential environmental dangers if the route went through the Sand Hills region of western Nebraska, which is just above the massive Ogallala Aquifer. The Calgary, Alberta-based pipeline firm had vowed to construct a takeaway leg from Cushing to the Gulf Coast once the cross-border permit was approved.

‘I don't know whether the decision on the XL permit can or will be reversed, but it's incredibly disappointing that political concerns are keeping us from doing the right thing,’ Szydlowski says. ‘Pipelines are built and operated in safe and environmentally protective ways every day.’

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