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If you transport petroleum products through a pipeline in the U.S.A. you have to pay 8-cent per barrel excise tax to the Oil Spill Liability Trust Fund.
If the Keystone XL goes through and they transport about 700,000 barrels a day, TransCanada would have to pay about $56,000 into the fund every day. That would be about $20 million a year.
TransCanada’s Clarification: Keystone XL will transport up to 830,000 barrels per day of crude oil from Canadian and American producers, which will allow the United States to reduce its dependence on oil imported from OPEC nations such as Venezuela, Nigeria and Saudi Arabia. Much of this crude oil will be bitumen from Canada’s oil sands. To learn more, view an overview on Keystone XL Pipeline.
But here’s some breaking news. The Internal Revenue Service, the agency who has to collect these taxes, has ruled that TransCanada’s Keystone XL won’t have to pay the tax.
What? These high pressure tar sand pipelines are spilling all over the place and they don’t have to pay into the Oil Spill Trust Fund? Yes, you read it right. That is correct.
TransCanada’s Clarification: The eight-cent-per-barrel levy on crude oil produced or imported into the United States for the U.S. Oil Spill Liability Trust Fund is paid for by oil producers and refiners, not pipeline companies. Learn more about the Oil Spill Liability Trust Fund at the Environmental Protection Agency (EPA).
Why? The IRS has ruled the tar sand or diluted bitumen as it’s called after they dilute it with poisonous chemicals, is not oil!
The IRS says it is not even a petroleum product! If I was reading this like you are, I would say, “Greg, you have been sniffing too many pipeline fumes! You must have your information wrong!”
Lying on my desk as I write this I am looking at the Internal Revenue Service TAM (Technical Advice Memorandum), dated January 12, 2011.
In this document they cite a House Ways and Means Committee ruling from years ago that “crude oil” does not include shale oil liquids from coal, tar sands, or biomass, or refined oil. They also describe what constitutes “petroleum products.”
The IRS report concludes by stating, “The House Report clearly indicates Congress’s intent to exclude tar sand from the definitions of crude oil and petroleum product … accordingly, tar sands imported to the United States are not subject to the excise tax …”
TransCanada calls it oil when they want to sell us on their dangerous idea. They call it an oil pipeline when they overstate the number of jobs this will create. They call it an oil pipeline when they exaggerate the amount of property taxes they will actually pay.
The Senators and Representatives who have bought into this lunacy call it oil. But now, when they realize it will be taxed, suddenly it’s not oil any longer!
So (pardon me) what the hell is it? Well, I am going to tell you for two reasons. One, TransCanada won’t, and two I think you need to know exactly what will be going right through our drinking water.
It is dilbit, diluted bitumen. We don’t worry too much about the bitumen. It is a mixture of clay and sand and petroleum product and has the consistency of peanut butter. You can’t pump that through a 36-inch pipe, so they have to dilute it.
That’s the part to worry about. About 40 to 70 percent of what’s in the pipe is bitumen. That leaves 30 to 60 percent of something else. Those are the diluents, and they can kill you!
TransCanada’s Clarification: Oil to be shipped on Keystone XL Pipeline will include bitumen from the oil sands in Canada that has been diluted with lighter oils. Most often, these lighter oils used as diluents will be natural gas liquids. Additional information is available in Section 6.3 of the Nebraska Department of Environmental Quality’s (NDEQ) “Draft Evaluation Report on the Keystone XL Pipeline Nebraska Reroute,” available from the NDEQ. Information is also available in the Final EIS, Section 3.13.
A dilbit safety data sheet says: Smells like rotten eggs because of the hydrogen sulfide; contains benzene which causes cancer in humans along with serous blood disorders including leukemia, and can damage nervous systems including fingers feet and arms.
TransCanada’s Clarification: It is very easy for people to point to materials found in oil and express concern. However, that is how it was formed in the ground and the materials that are in it – lead, benzene, etc. – are not added to the oil for transportation. That’s the way oil producers find it, and then at the refinery, these materials are taken out of the oil. This is the case for all oil sources, and with the oil sands it just happens to be oil located in compressed sand. It is the same for any grade of oil, including those produced in California, Texas or in the 17 of 18 counties in Nebraska that produce oil.
Dilbit contains PNA’s, polynuclear aromatic hydrocarbons, which if it comes into contact with skin can cause skin cancers. Inhalation of PNA’s can cause lung cancer.
The safety data sheet goes on to say about dilbit: Don’t inhale the vapors as the hydrogen sulfide may cause irritation, breathing failure, coma and death without any warning odor being sensed.
If spilled on land, the safety sheet says, “Keep public away. Vapors or dust may be harmful or fatal.” If spilled in water, “Product will submerge after a few days of weathering.”
Folks, that means it sinks in water. TransCanada says it floats. We know that is not true as Enbridge is still cleaning the bottom of the Kalamazoo River after a million gallons spilled in 2010.
So what is it? It’s tax free according to the House of Representatives because it is not “oil.” It is oil according to TransCanada. Oh, something else Congress did.
TransCanada’s Correction & Clarification: Everything that is in Keystone and Keystone XL Pipelines is crude oil; there are just different grades of oil. Each grade of oil that will go through the pipeline must meet strict specifications for water, sediment and viscosity.
They set a $350 million liability limit on each oil spill, so if the company goes over that amount to clean it up, the Oil Spill Trust Fund kicks in. (But TransCanada won’t be paying into the fund for the Keystone XL, so who pays? The Michigan spill has cost more than $800 million so far and is still rising!)
So Congressman Adrian Smith, whose Third District is about to be sliced open so all this poison can run right over and through our water, why didn’t you tell us about tar sand not being “oil” and not subject to the tax to clean up spills?
We have asked you about the Keystone XL numerous times, and not once did you bring this up. It all comes from the House of Representatives, your body, and this pipe is going to spill on your Third District.
Why aren’t you screaming at the top of your lungs to force Keystone XL to pay into the Oil Spill Liability Trust Fund?
Since this pipe is coming within three miles of York, Neb., the York News-Times would like to know. But if you are one of those who still think this will create 200,000 jobs, end our dependence on unfriendly oil and will never spill, then I submit it’s actually you who might have been sniffing too many pipeline fumes.
To view the complete editorial, click on the following link: North York Times — Editorial: Published August 12, 2012.
I am writing to express concern regarding the information (misinformation) that is being presented about all the jobs that will be created by the Keystone XL Pipeline. From what I've read and the following quoted material, they all seem to be saying just the opposite, as well as increasing American's price for Canadian oil.
TransCanada’s Clarification: This is not just Canadian oil, Keystone XL will transport up to 830,000 barrels per day of crude oil from Canadian and American producers to refineries in the U.S. Midwest and Gulf Coast. To learn more about Keystone XL visit our Keystone-XL-.com.
The following quote is found on page 14, Feb-March 2012 issue of “Poder Magazine” by Frances Beinecke, president of the National Resources Defense Council:
“By diverting Canadian oil that would otherwise go to the Midwest, TransCanada has admitted the pipeline would increase the price Americans pay for Canadian oil by $3.9 billion.
“The job prospects from the pipeline are equally grim. Supporters will tell you the pipeline could create ‘tens of thousands’ of jobs. But TransCanada's own representatives said in sworn testimony the project will only generate ‘hundreds’ of permanent jobs. The State Department thinks the number of permanent jobs is closer to 20. The department also estimated the pipeline would create between 5,000 and 6,000 temporary construction jobs. That's typical for a major construction project, but it is not a national jobs plan. The pipeline won't deliver lower prices or good jobs, but it will bring more climate change and more environmental risk.
TransCanada’s Clarification: Building the 1,179-mile Keystone XL pipeline will require an estimated 9,000 pipefitters, welders, electricians, heavy equipment operators and other highly-skilled trades people over two years of construction. Most of the materials and equipment for these $7.6-billion projects have already been produced, benefitting some 7,000 manufacturing workers in almost every state in the U.S.
“Not only does extracting tar sands oil produce three times as much global warming pollution as regular crude, but carrying this corrosive fuel across six states and the Ogallala Aquifer, the source for fresh water for the American Heartland, is inviting disaster."
TransCanada’s Clarification: Pipelines are the safest and most efficient way of moving petroleum products over long distances and the North American pipeline industry is one of the safest and most regulated in the world. As well, TransCanada’s Nebraska re-route has made sure that the pipeline will not run through the Sand Hills region, which means it will avoid the Ogallala Aquifer. View the new route on TransCanada.com, or view the Nebraska Department of Environmental Quality’s Draft Evaluation Report, Chapter 1, section 1.2.4 Reconfigured Keystone XL Pipeline.
The oil shipped on the Keystone XL is not corrosive to the pipeline. Although some of the oil will be derived from the oil sands, only oil is shipped. The sand is separated at the source. A recent Battelle study (July 2012), confirms that the oil is not corrosive.
It seems Beinecke is citing material given in congressional testimony regarding TransCanada's own admission as to what will or will not happen with their tar sands oil as well as the number of permanent jobs to be created and spread over the six states through which their pipeline will pass.
To view the complete letter to the editor, click on the following link: Billings Gazette — Letter to the Editor: Published August 26, 2012.
I would like to debunk the myth that building TransCanada’s Keystone XL pipeline from Alberta to Texas would somehow lower prices at the gas pump.
TransCanada’s Clarification: Allowing Gulf Coast refiners to purchase cheaper North American crude could also lead to the competitive pressure needed to lower gasoline prices for Americans.
If the entire pipeline were built, Canadian heavy crude oil would be routed through the United States to Port Arthur, Texas. Port Arthur is a foreign-trade zone that allows tax-free transactions.
And TransCanada has always intended that all of the oil carried by the pipeline would be sold to foreign markets, principally Asia, where the highest price can be obtained.
The net effect of building the pipeline would be that the United States would bear the all of burden of ongoing environmental risk and reap none of the rewards from the sale of the oil.
TransCanada’s Clarification: Receiving more production from Canada and fields in Montana, North Dakota and South Dakota provides Americans with the opportunity to greatly enhance your energy security by taking better advantage of safe, secure and reliable supplies of oil. The alternative is to continue importing higher-priced, ‘conflict oil’ from the Middle East, Venezuela and Nigeria — where American values and interests are not shared or respected.
The pipeline won’t be much of a job creator, either. Knowledgeable sources estimate that building it would provide, at most, about 20,000 mainly temporary construction jobs and a few hundred permanent jobs. And to add insult to injury, the pipeline would be constructed using foreign steel and aluminum.
TransCanada’s Clarification: Most of the pipeline will be built in North America, but not all of it. Seventy-five per cent of the Keystone XL steel will be made in North America; 50% will come from the U.S., 25% from Canada, 16% from Italy and 10% from India. For more information on this topic, view our news release.
But building Keystone XL would be very profitable for at least a few Americans. Koch Industries — a conglomerate owned and run by Charles and David Koch, major tea party financiers — owns and operates facilities at both ends of the proposed pipeline. They and their stockholders would profit mightily from the pipeline’s construction.
TransCanada’s Clarification: Koch Industries is not one of our customers.
To sum up, helping to lower gas prices in the U.S, or for that matter benefiting U.S. citizens in any substantive way, really isn’t part of TransCanada’s plan.
Peggy L. Trivilino
To view the complete letter to the editor, click on the following link: The Nashua Telegraph — Letter to the Editor: May 9, 2012.
What Keystone XL is really about is getting the oil to the port refineries on the Gulf Coast and the profits oil companies stand to make by refining their oil and putting their refined product on the international market. Keystone XL is, in essence, an export pipeline.
Canada is United States' biggest oil supplier and when compared to international prices, the crude oil we get from Canada isn't quite as expensive as oil that has access to the world market. The biggest factor holding down the price for Canadian crude is also the most basic — tar sands producers don't yet have a convenient way to ship their product overseas, so the only demand comes from the U.S. and Canada. Demand for oil in the U.S. has been declining, while Canada's oil production is growing. Oil companies want to increase demand for their Canadian products by gaining access to markets in Europe, Asia and South America, driving up the price for Canadian oil.
No Guaranteed Energy Security
Keystone XL would not increase oil supply or improve energy security in the United States. There is no guarantee this oil will remain in the U.S. for sale. TransCanada admitted that one of the main goals of the project is ship the refined oil from the Gulf overseas.
TransCanada’s Clarification: Receiving more production from U.S. fields and Canada provides Americans with the opportunity to strengthen energy security by taking better advantage of safe, secure and reliable supplies of oil. The alternative is to continue importing higher-priced, ‘conflict oil’ from the Middle East, Venezuela and Nigeria – where American values and interests are not shared or respected. To read more on this, look at CAPP’s Response to Keystone XL concerns.
Several pipelines already run from Canada to refineries in the U.S. that service America's Midwestern states. The Department of Energy has concluded that there is already enough excess pipeline capacity to carry all the oil Canada can produce for the foreseeable future.
TransCanada has admitted to reporters and Congress that Keystone XL will raise gas prices in the Midwest, even though politicians claim that it will reduce prices.
TransCanada’s Clarification: While prices can be volatile in the short term, in an average year, the cost of gasoline in the Midwest is higher than the cost in the Gulf Coast with a difference that corresponds to transportation costs. Keystone XL will allow Gulf Coast refiners to buy cheaper American and Canadian crude instead of higher priced foreign imports (WTI versus Brent), which should lead to the competitive pressure needed to lower gasoline prices, certainly not increase those prices.
Again, it all comes back to exports, and it's revealing to look at what the industry is already doing: Gasoline exports have actually tripled in the last year to 600,000 barrels per day, even though gas has increased by 42 cents a gallon in the same time frame. America is becoming the middle man in the global oil business — drilling and importing lots of crude oil but exporting more and more refined diesel and gasoline products. The U.S. inherits the risk and gets no reward.
Tar sands oil pipelines aren't safe. Keystone 1 has already leaked 14 times since starting operations in June 2010.
TransCanada’s Clarification: The oil shipped on the Keystone XL is not corrosive to the pipeline. Although some of the oil will be derived from the oil sands, only oil is shipped. The sand is separated at the source. A recent Battelle study (July 2012), confirms that the oil is not corrosive. Rather, according to the study, it is comparable to other heavy crude oils, “such as those produced in Venezuela, Mexico, and California, which have been transported and refined in U.S. for decades.”
TransCanada’s Keystone XL and Gulf Coast projects have undergone well over three years of environmental review by numerous federal and state agencies. The review was the most comprehensive process ever for a cross-border pipeline.
Additional information is available in Section 6.3 of the Nebraska Department of Environmental Quality’s Draft Evaluation Report on the “Keystone XL Pipeline Nebraska Reroute” available from the NDEQ homepage. Information is also available in the Final EIS, Section 3.13.
One of the 14 spills dumped 21,000 gallons of tar sands crude. In summer 2010, another tar sands pipeline in Michigan spilled 800,000 gallons in the Kalamazoo River impacting water supplies for 40 miles downstream.
Wrong Direction on Energy
Building the tar sands pipeline is going backward and will perpetuate the production of one of the dirtiest, most polluting fuels ever. The energy industry and Congress should be promoting clean, low-carbon fuels and energy-saving technologies. The risk to our water, health, wildlife and great open spaces is too high.
TransCanada’s Clarification: TransCanada is not just a pipeline company. We also promote hydro, wind and soon, solar power. We understand what renewable energy technologies can do, and that fossil fuels will remain part of our energy mix for decades to come. This is a part of the honest discussion that North American consumers, producers, protestors and policy makers need to have about energy. To learn more about our other projects, visit TransCanada.com.
Lew Carpenter is the National Wildlife Federation's Regional Representative for Nebraska, Wyoming and Nevada.
EDITOR'S NOTE: This is an online-only column and has not been edited.
To view the complete guest commentary, click on the following link: Denver Post — Guest Commentary: Published June 13, 2012.
Despite Republican claims to the contrary, President Obama has not unequivocally rejected the Keystone XL oil pipeline that would run from Canada to the Gulf Coast.
Yes, Obama turned down TransCanada’s initial permit application last January. He had no responsible choice to do otherwise after House Republicans insisted the controversial project be decided under an unrealistic and politically motivated deadline and inserted it into must-pass legislation in an attempt to force his hand.
The president was right to accept the recommendation of the State Department, which has jurisdiction over the proposed 1,700-mile pipeline that would cross through environmentally sensitive areas in the Midwest. In denying the permit, Obama emphasized that his judgment was based not on the project’s merits but on a “rushed and arbitrary deadline” that did not allow sufficient time for analysis. He also made clear that TransCanada, the pipeline’s sponsor, could submit a proposal to build along another route, but warned that proposal also would require time for a comprehensive environmental review.
Such subtleties were lost on Republicans who used Obama’s decision as a political cudgel. They declared that he had cost the country “tens of thousands of job” — a ridiculous claim that not only mischaracterized the president’s decision, but also vastly overstated the number of jobs the project is expected to generate. Republicans also conveniently chose to ignore that the president in March approved the southern part of the project, drawing fire from environmentalists who adamantly oppose the entire Keystone project, in part because of the damage it would cause to Canadian boreal forests and threats to Midwest water supplies.
Now TransCanada has returned with a new application that proposes a new route for the pipeline’s northern portion through Nebraska, one that would avoid more of the sensitive Sandhills region that administration officials had cited as a concern.
Congressional Republicans are predictably demanding that the president cut off the State Department review and immediately approve the revised application. “Today there is just one person standing in the way of tens of thousands of new American jobs: President Obama,” declared Republican House Speaker John Boehner.
From a purely political perspective, Obama might be tempted to quickly approve the project and deprive Republicans of an election-year issue they intend to use to accuse of him slowing the nation’s economic recovery. But he should resist that temptation and give the State Department the seven to 10 months it says it needs to review the new proposal.
Even if the new routes adequately protect water supplies in the Ogallala aquifer, the nation’s largest source of drinking water, Obama should consider a wide range of factors, not just “jobs,” before approving the pipeline.
Those factors include the production of tar sands oil in northern Alberta, which would cause far more greenhouse gas emissions than drilling for conventional crude.
TransCanada’s Clarification: TransCanada is an energy infrastructure company, not an oil producer. Our primary role is to safely deliver oil, natural gas and power to customers. However, it is worth noting that the oil produced from the Canadian oil sands is very similar in chemical composition and greenhouse gas intensity to heavy oil from California and Venezuela — oil that is currently refined in Texas. And when it comes to greenhouse gas emissions, the power currently produced through the U.S. coal fleet generates 30-times more emissions than the entire Canadian oil sands industry.
To learn more about Canadian oil sands and the environment, take a look at CAPP’s oil sands environmental information page.
While Republicans insist that the project is necessary to reduce U.S. dependence on Middle Eastern oil, the bulk of the oil carried by the pipeline would be destined for foreign export.
TransCanada’s Clarification: Receiving more production from fields in Canada, Montana, North Dakota and South Dakota provides Americans with the opportunity to strengthen energy security by taking better advantage of safe, secure and reliable supplies of oil to keep U.S. refineries running at full capacity. The alternative is to continue importing higher-priced, ‘conflict oil’ from the Middle East, Venezuela and Nigeria — where American values and interests are not shared or respected.
Obama also should consider that the approval of the Keystone project would create a costly new energy infrastructure that fails to recognize the importance of developing renewable and alternative energy sources.
TransCanada’s Clarification: At TransCanada we understand the importance of renewable energy. We are not just a pipeline company, but also work in wind, hydro and soon, solar power. To learn more about our diverse portfolio, visit TransCanada.com.
The president hasn’t said a final “no” to Keystone, but he should think long and hard before saying a final “yes.”
To view the complete editorial, click on the following link: The Oregon Register-Guard — Editorial: May 7, 2012.
What are you really selling? Why would you accept TransCanada's terms and their timeline? We can do better together.
1) Abandonment of Pipe: TransCanada is saying they will simply abandon the pipe in the ground when they are finished transporting tarsands and diluents. Instead, the contract should have clear terms on when the tarsands are all gone, it is TransCanada's responsibility to take out, dispose of and clean up the pipeline.
TransCanada’s Clarification: Prior to decommissioning in Nebraska, Keystone would identify the decommissioning procedures it would use along each portion of the route, identify the regulations it would be required to comply with, and submit applications for the appropriate environmental permits. Keystone expects to operate the Keystone XL Pipeline in excess of 50 years. If the pipeline were to be taken out of service, the pipe will be purged of its contents, filled with an inert gas, such as nitrogen, and left in place and intact with appropriate warning signs. Cathodic protection would likely remain functional as would other integrity measures such as periodic inspections under the integrity management plan.
Additional information is available in Section 2.6 of the (NDEQ) Nebraska Department of Environmental Quality’s “Draft Evaluation Report on the “Keystone XL Pipeline Nebraska Reroute” available from the NDEQ homepage. Information is also available in the Final EIS, Section 3.13.
2) Oil Spill Liability: TransCanada likes to tell folks federal law takes care of all the liability around oil spills, not true.
TransCanada’s Clarification: TransCanada's Keystone XL pipeline falls under Federal Jurisdiction. In terms of liability, TransCanada is responsible for damages caused during construction and operation of the pipeline, including during any pipeline incident, such as a leak or spill. However, consistent with rights each of us has to protect our personal property, in the case of willful, reckless or negligent damage to the pipeline; TransCanada could seek to hold responsible parties accountable. However, we will always be responsible for the clean up of any spill.
3) Access to Land: In TransCanada's contract, they can come and go as they please on your land for maintenance, surveying and more. Instead, there should be clear guidelines and timing notifications of when they need and can have access to your land.
TransCanada’s Clarification: This is not our policy at TransCanada. In reality, the easement agreement allows Keystone Operations staff to access the easement for inspection, operation and maintenance; all activities are limited to the easement area only. TransCanada and Keystone Pipelines provide notification to landowners of scheduled inspection and maintenance activities.
4) Ownership of Pipe: Right now TransCanada could sell the pipeline to another company and that new company would just assume ownership of the easement on your land.
5) Money: TransCanada is trying their best to lure folks in with dollar signs. They want your land. They need your land. You have the upper hand. They have lots more money to pay out for easements, so now is not the time to sign with their contract and for money that is certainly lower than what they can and should pay.
85% of Nebraskans get their drinking water from the Ogallala Aquifer. Neither TransCanada nor our government has a fail-proof system for cleaning up tars sands — very different than traditional oil — from our land and water.
TransCanada got the majority of their steel on the Keystone 1 pipeline from India. Most steel for Keystone XL comes from India and Canada. Its only "coated" in the USA, not made in the USA- not the best "pro-America" or "pro-US jobs" message Look at their actions not their words!
TransCanada’s Clarification: Seventy-five per cent of the Keystone XL steel will be made in North America; 50% will come from the U.S., 25% from Canada, 16% from Italy and 10% from India. For more information on this topic, take a took at our press release.
TransCanada’s Clarification: The Keystone XL Pipeline is not an export pipeline, but rather will provide the United States with energy. The crude will be going to refineries on the Gulf Coast and American Midwest, not to a refinery owned by Saudi Arabia. This is a major benefit of the Keystone XL pipeline to Americans as it provides energy independence. To read more about this, view the Canadian Association of Petroleum Producer’s (CAPP’s) take on the issue.
All of Nebraska and our economy is dependent on access to a reliable and safe water source and the value of our land — a tar-sands pipeline threatening both is not something you can afford to ignore. Get the facts and make your own decisions — your grandchildren will thank you for it!
To view the complete blog post, click on the following link: N.E.A.T. Flyer — Community Flyer: Published June 29, 2012.