TransCanada Corporation (USA) (TRP): Why A Spill Like This Could Be A Disaster

Page 1 of 2

If the numerous protests against Keystone XL — the proposed TransCanada Corporation (USA) (NYSE:TRP)-operated pipeline that would link production from Alberta’s oil sands to refiners along the US Gulf Coast — haven’t already made clear by now, a lot of environmentalists and other groups are staunchly opposed to the line’s construction.

In addition to their argument that allowing the pipeline to be constructed would lead to accelerated development in Alberta’s oil sands, which would spew materially greater quantities of greenhouse gases into the atmosphere, environmentalists are against Keystone XL for two additional reasons.

The first is because of the environmentally sensitive areas the pipeline would cross. One of the key areas pinpointed as the most environmentally sensitive is in Nebraska, where Keystone would cross more than 200 miles of the Ogallala aquifer. Some say that a spill near this region could be far more devastating than a spill in virtually any other area, since it would pollute the region’s groundwater, perhaps irreversibly.

TransCanada CorporationThe second cause for concern has to do with the physical qualities of the bituminous crude oil Keystone XL would move. Bitumen is a thick, viscous substance that doesn’t flow unless it’s heated or diluted. For it to be transported via pipeline, it has to be diluted with specialty chemicals that yield diluted bitumen, or “dilbit” crude. Some commentators argue that dilbit crude is much harder to clean up than lighter crude variants, such as those produced in the Bakken or Eagle Ford shales, especially when it spills into water.

For instance, consider the rupturing of an Enbridge Inc (USA) (NYSE:ENB) pipeline in July 2010, which spilled more than a million gallons of dilbit crude into Michigan’s Kalamazoo River in what was the largest bituminous crude spill into a U.S. waterway.

Enbridge’s woes highlight dilbit cleanup issues
Nearly three years later, the cleanup effort isn’t over. When all that dilbit crude was released into the river, the dilutive chemicals rose to the surface and evaporated but left behind bitumen, which began sinking to the riverbed.

Though Enbridge has already been fined $3.7 million for the spill, which it paid in September, according to the federal Pipeline and Hazardous Materials Safety Administration, the Environmental Protection Agency isn’t satisfied yet. It notified the Canadian pipeline operator in October that further cleanup is required in the Kalamazoo River, upstream of the Ceresco and Battle Creek Dams, as well as in the delta upstream of Morrow Lake.

And last month, it gave the company an additional order, which requires it to dredge submerged oil and oil-contaminated sediment that still exists across some 40 miles of the Kalamazoo River. After factoring in these additional costs, the company now estimates the total costs of cleanup to approach $1 billion. That’s more than the company’s entire net income last year.

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 Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

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!