AP Interview: CEO says pipeline debate may persist

December 16, 2011 - 9:05 PM

LINCOLN, Neb. (AP) — The chief executive of a company trying to build a pipeline to carry oil through six states from Canada to Texas said the national debate over the plan has "gone off on tangents" that touch on larger issues of U.S. energy and environmental policies.

TransCanada CEO Russ Girling said the proposed 1,700-mile Keystone XL pipeline has become mired in debates over topics ranging from global warming to U.S. presidential politics. The U.S. State Department delayed the $7 billion project last month largely because of concerns about its route, particularly though environmentally sensitive areas in Nebraska.

"It's mushroomed into this debate about all these social issues, which I don't deny we have to address," Girling said in a telephone interview with The Associated Press from his office in Calgary.

"We're obviously in a migration from fossil fuels to alternative energy, which is why we've invested in the largest wind farm in Canada and one of the largest wind farms in Maine," he said, referring to a 132-megawatt wind farm in Maine with the capacity to serve about 50,000 homes and two similar projects in Canada. "But it's not going to occur tomorrow. It's going to take decades."

Environmental groups have argued that tapping the vast tar sands in Alberta would lead to a vast increase in the burning of carbon-intensive fossil fuels at a time when it should be trying to reduce the release of gases that contribute to global warming.

"The one thing that has nagged me is how this debate has gone off on tangents," Girling said. "Those aren't the questions that need to be asked here. We should be asking, 'Is the United States going to need fossil fuels for decades to come? Do you want to get it from Venezuela?'"

Members of Congress, especially Republicans, and GOP presidential candidates have criticized President Barack Obama for his administration's decision to delay the project for a year. They argue that the pipeline would produce thousands of jobs and lessen the nation's dependence on oil produced in nations that are often hostile to the United States.

Some also accused of Obama of intentionally delaying the project until after the 2012 elections.

The pipeline would pass through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Officials in most states support the project, but the pipeline ran into intense opposition in Nebraska from environmentalists, landowners, lawmakers and others who were worried because the pipeline would cross the Sandhills region. The expanse of sandy-soil hills sits atop the massive Ogallala aquifer, a major irrigation water source that sits beneath parts of eight states.

Girling predicted that resistance to the Keystone XL would ease once Nebraska approves a new route that avoids the Sandhills region, but he said some opponents would never be satisfied.

"Our intent is to work on alleviating those issues that were of primary concern to Nebraskans," Girling said. "I do believe the opposition could dissipate. That said, there are going to be those opposed to the burning of fossil fuels who will continue to oppose the project on that basis. I would hope that opposition would dissipate as well, but I'm not hopeful."

Nebraska lawmakers convened for a special session that Republican Gov. Dave Heineman called last month to address pipeline issues. Two laws were approved to provide greater state oversight of major oil pipelines, including the Keystone XL. TransCanada agreed to move the route away from the Sandhills and submit to a state environmental review.

Some environmental advocates remain skeptical.

Jane Kleeb, director of the anti-pipeline group Bold Nebraska, said research hasn't shown the effects of the tar sands oil on land, water or human health if a pipeline were to leak. Kleeb noted that the state hasn't enacted laws to shield landowners from oil-spill liability or dealt with the prospect of eminent domain if they oppose a company's offer to buy land for a project.

"Our concerns have not been addressed, and the opposition is not going away," Kleeb said. "We do not know the proposed route. We have no idea if the pipeline will cross the heart of the Ogallala aquifer, or areas where the pipe sits in the water table."

Kleeb and others also have noted there is no guarantee that the oil extracted in Canada and refined in Texas would remain in the U.S.

Girling said companies expected to send oil through the line have no intention to deliver to anywhere but refineries in Texas. Some oil may go abroad once it's refined, he said, but the U.S. remains a net importer and will trade on global markets whether the pipeline wins approval or not.

He said TransCanada has started talking with the State Department and the Nebraska Department of Environmental Quality about a new route. The review process is expected to last six to nine months.

Alex Pourbaix, TransCanada's president of pipelines, told a congressional panel this month that the U.S. produces 5 million barrels of oil each day and consumes 20 million gallons a day of refined oil.

"The U.S. is by far the largest consumer of refined products on the planet," he said. "It is natural that the vast majority of this product will stay in the region with the highest demand."

Girling acknowledged that after last year's oil spills in the Gulf of Mexico and Michigan's Kalamazoo River, the public has grown distrustful of companies that produce and transport oil. He said TransCanada and the entire industry need to improve communication with the public.

Project opponents have "created this perception that we were going to poison drinking and irrigation water," he said. "We would still say that's inaccurate, but water is a very sensitive issue for some people. If someone said to me that this was going to be contaminating my water, I'd be concerned as well."