TransCanada Corporation (USA) (TRP), Magellan Midstream Partners, L.P. (MMP): How Safe Will the Keystone XL Pipeline Really Be?

According to experts interviewed by InsideClimate News, installing external sensor cables, a concrete cap, and deploying additional patrols to the environmentally sensitive areas of Nebraska would cost less than $10 million – pocket change compared to Keystone XL’s monstrous $5.3 billion budget.

But according to a TransCanada Corporation (USA) (NYSE:TRP) spokesman, external sensing technology would not be the ideal method to use for Keystone XL, because it is “subject to localized conditions such as water table and soil conditions and therefore reliability and maintenance can be an issue.” Perhaps. Or maybe TransCanada just doesn’t want to shell out the extra millions of dollars to install external sensors.

As for TransCanada’s claim that it will be following 57 guidelines that exceed standard pipeline requirements, an analysis conducted by the Natural Resources Defense Council (NRDC) in 2011 suggests otherwise. The NRDC study concluded that the majority of the 57 conditions are part of minimal standards set forth by the Department of Transport, with just 12 of the 57 conditions being materially different in any way from the minimum standards enforced by the department.

Final thoughts
As you can see, TransCanada Corporation (USA) (NYSE:TRP)’s claims don’t always match up with claims made by other credible sources. The company also has a few major blotches on its safety track record, including more than a dozen leaks along its first crude oil pipeline – Keystone I – and a major accident along its Bison natural gas pipeline, which exploded in a remote location in Wyoming just six months after going into service.

If Keystone XL is approved – a scenario that looks increasingly likely – concerned parties, including regulatory bodies, landowners along the line’s proposed route, and anybody worried about the environment, should continue to demand that the most stringent safety requirements be enforced and followed. I think we all deserve at least that much for jeopardizing our environment.

The article How Safe Will the Keystone XL Pipeline Really Be? originally appeared on

Motley Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Magellan Midstream Partners, L.P. (NYSE:MMP).

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