TransCanada Corporation (USA) (TRP): Safety Absolutely Must Be a Key Factor in the Keystone XL Debate

Page 1 of 2

TransCanada Corporation (USA) (NYSE:TRP)As the oil and gas industry anxiously awaits President Obama’s final decision on TransCanada Corporation (USA) (NYSE:TRP)‘s Keystone XL — the controversial pipeline that would bring hundreds of thousands of barrels of oil from Canada’s oil sands to refiners along the U.S. Gulf Coast — commentators have drawn attention to its operator’s less than stellar track record with respect to pipeline safety.

Some even view it as a strong enough reason to reject the pipeline. Do these skeptics have a point? Or are they embellishing the company’s safety-related transgressions simply to push their own agenda? Let’s take a look.

TransCanada’s claims
As expected, Calgary-based TransCanada Corporation (USA) (NYSE:TRP) remains adamant about its safety record, which it characterizes as “industry-leading.” In a section of its website, the company states:

TransCanada Corporation (USA) (NYSE:TRP) has an industry-leading safety record building and operating pipelines across North America for more than 60 years. Our first priority is the safety of our employees and the public. … Safety is built into the full life cycle of a pipeline, starting with design, construction, operation and eventually abandonment or retirement.

These claims may be convincing when read on a fancy, professional-looking website or when backed by leading experts. But even a cursory review of the company’s track record suggests otherwise.

Issues with Keystone I and Bison pipelines
Consider Keystone I, the company’s first crude oil pipeline, which transports mainly oil sands crude from Alberta to Cushing, Okla., as well as to refiners in Illinois. As with Keystone XL, the company was initially highly confident about the pipeline’s construction quality and adherence to safety standards, claiming that it would “meet or exceed world-class safety and environmental standards.”

TransCanada Corporation (USA) (NYSE:TRP) also expressed confidence in its estimates for potential spills arising from Keystone I, as well as other environmental risks posed by the project. The company said Keystone I would leak less than twice a decade and highlighted 51 special conditions that it had followed to ensure utmost safety — very similar to its claims about Keystone XL. But shortly after the pipeline went into service in 2010, TransCanada was proved wrong.

In its first year alone, Keystone I started to experience major issues and reported numerous leaks. The most serious of these occurred in May 2011, when the pipeline spilled roughly 500 barrels of oil at a pump station in North Dakota. That accident marked the Keystone system’s 10th spill, all of which were related to equipment failures at pump stations .

Shortly thereafter, federal pipeline regulators decided to intervene and slapped TransCanada with a Corrective Action Order (CAO). The company was forced to temporarily shut down the pipeline, after regulators determined that it was an imminent threat to life, safety, and the environment. That made Keystone the newest pipeline ever to be given such an order.

Similarly, consider TransCanada Corporation (USA) (NYSE:TRP)’s Bison natural-gas pipeline, which exploded in a remote location near Gillette, Wyo., in July of 2011 — just six months after going into service. According to documents obtained by CBC News, Canada’s largest news broadcaster, the Bison pipeline suffered from a litany of problems related to improper welding and substandard safety inspections that became apparent during construction.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!