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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
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

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!