State Dept accused of accelerating Canadian company's pipeline approval

The U.S. State Department has accelerated the approval of a cross-border pipeline, apparently allowing an Alberta-based Canadian energy company to sidestep the normal regulatory process applied to other cross-border projects including Keystone XL, according to emails made public Monday as part a case filed against the department by the Sierra Club and other environmental groups.

“The president and the State Department made it clear on Keystone that this is an important review process they need to stick to,” Sierra Club staff attorney Doug Hayes told Al Jazeera. “And Obama has said it’s important to look at the climate impacts from these expansions — meanwhile we have the State Department basically working with Enbridge to sidestep that.”

Enbridge Energy, the Canadian company responsible for a massive pipeline rupture in 2010 near Michigan's Kalamazoo River, applied last year for an amended presidential permit for its planned Alberta Clipper, or Line 67 — a cross-border pipeline that would double the capacity of its pipeline bringing Canadian tar sands oil from Alberta to American refineries.

Presidential approval is required for such cross-border projects, like Keystone XL. In February, U.S. President Barack Obama vetoed a Republican bill approving the Keystone XL oil pipeline. Obama has said that the project's approval is based on a combination of factors including national security, energy needs and impact on the environment. Critics of Keystone argue that the pipeline might have exacerbated climate change by contributing to an increase in Canadian tar sands production and eventually carbon emissions.

Enbridge had planned to increase the capacity of Line 67 from 450,000 barrels per day to over 800,00, Hayes said. But the 2010 State Department permit for Line 67 was clear in limiting the line’s capacity to 450,000. Any expansion beyond that would require a new presidential permit from the State Department as well as a new analysis of potential environmental impacts, according to Hayes.

But that approval process, started in 2012, “is taking longer than anticipated,” according to an emailed statement from Enbridge’s U.S. spokeswoman Terri Larson.

And “in view of the presidential permit delay, Enbridge is deploying a number of interim system optimization actions to accommodate any shortfall in capacity relative to shipper requirements,” Larson said.

Instead of relying on Line 67 to increase its capacity to transport oil to the United States, the company would instead construct a “Bypass Project” to divert 800,000 barrels per day from Line 67 north of the border into an older Enbridge cross-border pipeline called Line 3 — and then divert the oil back to Line 67 south of the border, according to the legal brief submitted by environmental groups.

The State Department hastened approval of those measures, according to emails submitted into the record in the environmental group’s case against the State Department.

“All of the land acquisitions for the border segment (of Line 3) had been made and they expect to break ground in a month. So we have to wrap this up,” State Department Attorney-Adviser Ona Hahs wrote on March 18, 2014, in an email made public Monday. 

Just over a week later, Hahs informed her colleagues in another email that they were “running out of time” to offer Enbridge the department’s approval.

“Enbridge needs to do the horizontal directional drilling under the 2 rivers in the border segment for Line 3 while the ground is still frozen, so they are planning to do that in mid-April, i.e., 2 weeks from now,” Hahs wrote.

“So we’re running out of time on that one,” Hahs added.

The Line 3 replacement plan — which included construction of a “New Border Segment”  — was approved less than a month later.

Unlike Keystone, the project was not made public for comment, nor was it subjected to a new environmental assessment based on the nearly doubled capacity of the line — as is the norm, Hayes said and further emails showed.

Enbridge’s Bypass Project with Line 3 is a “scheme” to avoid the regulatory process, Hayes said.

Under the guise of “maintenance,” Hayes said, Enbridge has constructed an “entirely new” pipeline next to Line 3. When it is finished, Line 3 will purportedly be able to transport about 800,000 bpd from Canada into the U.S. — the same amount Enbridge hoped to transport through Line 67.

Enbridge has been able to circumvent the process applied to Line 67 because Line 3 was built in the 1960s under a different presidential permit. That permit is so vaguely worded that Enbridge can increase capacity of oil transported through the line without having to apply for an amended presidential permit as it had to with Line 67, Hayes said.

David Coburn, legal counsel for Enbridge, wrote to the State Department on March 17, 2014, in a memo initially marked “confidential,” that the replacement of Line 3 was “outside of the jurisdiction of the Department.” The memo added that the larger replacement project was intended to “improve system reliability” and was scheduled to be completed in 2017, according to climate change information website DeSmogBlog.

“We know they built the extension to Line 3 and are already pumping 570,000 bpd but the second phase of construction would jack it up to 800,000 bpd. They just need new pump stations in Minnesota, and they’ve started that already but we don’t know how far along it is,” Hayes said.

According to Enbridge's Larson, the approach is "in keeping with the terms of the presidential permits previously issued by the State Department for Lines 3 and 67 and also consistent with the State Department’s authority over cross-border crude oil pipelines.”

“The State Department was fully briefed on the interconnection plans and provided Enbridge with a letter on July 14, 2014, concluding that ‘Enbridge’s intended changes to the operation of the pipeline (Line 67) outside of the border segment do not require authorization from the U.S. State Department,” Larson wrote.

But Hayes condemned the State Department’s actions as essentially partaking in a dereliction of duty. The State Department had not responded to Al Jazeera's request for comment at the time of publication.

“I think the State Department should respect its own process and say you can’t expand the Alberta Clipper until the environmental review is complete like they had always planned on doing,” Hayes said.