Call for bonds as protection along TransCanada’s XL oil pipeline

Several landowners are calling for TransCanada to post additional bonds for the company’s proposed XL oil pipeline in western South Dakota. The bonds would serve as financial protection against damages from oil spills and for removal of the XL pipeline if the company abandons it someday.

State law currently doesn’t require spill and abandonment bonds for pipelines. However, bonds are required for surface mines in South Dakota.

The pipeline

TransCanada is planning to build the 313 mile stretch of the Keystone XL pipeline across western and south central South Dakota. Keystone XL would deliver up to 900 000 bpd of crude oil through a 36 in. pipe running from Hardisty, Alberta; to Texas terminals near Port Arthur and Houston. The South Dakota portion is estimated to cost US$ 920 million. The company wants to begin construction in 2011.

A public hearing

The Public Utilities Commission heard comments from the public on 3^rd November in Pierre, Canada. It was the fourth public hearing before the PUC as part of the Keystone XL proceeding. Earlier hearings were held in April in Winner, Philip and Buffalo. More than 50 landowners and others attended the public hearing, organised by the South Dakota Public Utilities Commission.

Landowners who live along the route of a crude oil pipeline voiced concern over oil spills and damage to their land, water and roads; as well as a variety of concerns, such as fencing, fossils, company conduct, water protection, spills, foreign ownership and taxes. Several landowners also voiced worries about what would happen to the pipeline after it reaches the end of its useful life – in several decades’ time.

'No property owner wants an abandoned gasoline station under their property,' said Harding County rancher David Niemi, who was among several who urged the commission to require TransCanada to post a bond that would provide money to clean up possible spills, repair damage to land and take care of the pipeline when it is no longer in use.

The landowners' comments will not be submitted as formal evidence, but the three commissioners will consider their remarks at the formal hearing. If they approve the construction permit, the commissioners could also take into account the landowners' comments when setting conditions.

The PUC is considering a US$ 15.6 million road-damage bond as a permit condition for the XL project. TransCanada posted a US$ 12 million bond for roads, as a condition of the PUC permit for its Keystone pipeline being built down the James River Valley. 

Read the article online at: https://www.worldpipelines.com/business-news/09112009/call_for_bonds_as_protection_along_transcanadas_xl_oil_pipeline-/