Green Right Now Reports

A story posted by Reuters today quotes an oil company chief saying his firm no longer considers Keystone XL a viable way to transport crude oil from the Bakken Shale in North Dakota to refineries in Texas.


Keystone XL pipeline would take tar sands oil from Canada, as well as US crude oil from North Dakota, to refineries in Texas.

Harold Hamm, CEO of Continental Resources, which has pledged to ship crude oil on the planned 1,700 transcontinental pipeline, says his company is now adequately served by rail transport. Continental now ships about 90 percent of its oil from North Dakota fields by rail, a more expensive but controllable method of transport, and Hamm is no longer waiting on the pipeline. He told Reuters that his company doesn’t need the much-delayed and controversial pipeline, “and is it needed for the industry? I don’t think so … not in the U.S.”

Hamm’s remarks raise a question about whether any US producers need the pipeline, which will mainly serve Canadian oil producers shipping tar sands from Alberta.

From Reuters:

“It may be several years yet, you know, before you find out if it (Keystone XL) is going to be built,” Hamm said. “It’s no way to run your business.”

Keystone XL’s developer, Canadian pipeline giant TransCanada, said the line has broad support, and there is a waiting list of customers interested in securing capacity on the line. Keystone XL should be operational two years after TransCanada receives a U.S. permit to complete it.

A Keystone spokesman also maintained that pipelines are a safer way to transport oil.

This year has seen several oil spills related to rail car accidents (a major one in Quebec), and also from pipeline breaks. Many large and small environmental groups oppose Keystone XL because they believe it poses a threat to the water in aquifers and streams it will traverse and is more likely to leak because of the corrosive tar sands oil it will carry from Canada. The Tars Blockade group, which has staged several protests of the pipeline, has reported seeing defective pipes that were laid into the ground in the Southern section of the pipeline across Texas and Oklahoma.

Reuters reports that “the largest U.S. railroads will likely transport about 400,000 carloads of crude oil in 2013, versus just 9,500 in 2008, according to estimates from the Association of American Railroads.”