US imposes extra conditions for potential approval of Keystone XL pipeline
US safety regulators have placed two new conditions on the construction of the controversial TransCanada Corp.’s (TSX:TRP) Keystone XL oil pipeline after finding dangerous construction defects involving the southern leg of the Canada-to-Texas project.
Buried close to the end of 26 appendices in a lengthy environmental impact statement on Keystone XL, the extra conditions can be found in the document released by the State Department on Jan. 31.
Although defects such as high rates of bad welds, dented pipe and damaged pipeline coating have been fixed, AP reports the federal Pipeline and Hazardous Materials Safety Administration wants to prevent similar problems in the construction of the controversial northern segment, which has been put on hold pending a decision by the Obama administration.
One of the new requirements pushes TransCanada to hire a third-party contractor chosen by the pipeline safety regulator to monitor the construction and report on whether the work is rigorous.
The second one asks the Canadian pipeline firm to adopt a quality management program to ensure the pipeline is built to the highest standards.
The extra clauses were added four months after the pipeline safety agency sent TransCanada two warning letters last year about defects and other construction problems on the Keystone Gulf Coast Pipeline, which extends from Oklahoma to the Texas Gulf Coast.
Supporters have said it would be a boon for job creation and domestic energy production, but opponents have warned that oil extraction from them —considered among the most carbon-intensive methods of energy production— would likely increase should the project be approved.
President Barack Obama has signalled that a decision on the debated pipeline should be made before summer, which leaves his administration about a month to decide whether to grant the final permit for the project.
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