Federal scientists: Diluted oil sands crude poses no higher pipeline risk

The heavy oil sands crude that would flow through Keystone XL is no more likely to cause pipelines to corrode and fail than other crudes, according to a government study Tuesday that could give a boost to the controversial TransCanada Corp. project.

But the report by the National Academy of Sciences did not examine the challenges in cleaning up any spills of dense Canadian bitumen that can only be transported through U.S. pipelines after it is diluted with lighter oils.

And critics said the study focused too much on the risks of pipeline transmission of diluted bitumen in comparison with other heavy crude — not lighter oils and petroleum products that historically have been the mainstay of the U.S. pipeline network.

As a result, environmentalists said, the 114-page report released Tuesday doesn’t shed enough light on potential risks of bringing more of the Canadian oil sands crude into the United States, whether by TransCanada’s proposed Keystone XL or other pipelines.

Although heavy Canadian crude has been transported in the United States for more than three decades, safety concerns have spiked in response to recent spills and the large uptick in imports. The U.S. is now importing about 2 million barrels per day of heavy crude and diluted bitumen from Canada, up from about 200,000 barrels in the late 1990s.

Oil industry representatives cast the NAS study as a vindication of Canadian crude.

“All crude oils have to meet the same criteria when put in a pipeline, which protects the pipeline and communities along its route, as well as the quality of all transported crudes,” said Peter Lidiak, pipeline director for the American Petroleum Institute. “Since the U.S. Office of Pipeline Safety began keeping detailed statistics in 2002, not a single corrosion-related pipeline release from pipelines carrying any Canadian crude has been reported.”

The academy’s study concluded that “diluted bitumen does not have unique or extreme properties that make it more likely than other crude oils to cause internal damage to transmission pipelines from corrosion or erosion.” Because diluted bitumen — also known as “dilbit” — is comparable in viscosity and density to other crude oils, it moves through pipelines in a similar manner, the scientists found.

Additionally, organic acids in diluted bitumen are not corrosive to steel under pipeline operating temperatures, the researchers said.

They also found that diluted bitumen does not have any unique properties making it more likely to cause damage to transmission pipelines, either by external corrosion and cracking or from mechanical forces:

“There is no evidence that operating temperatures and pressures are higher or more likely to fluctuate when pipelines transport diluted bitumen than when they transport other crude oils of similar density and viscosity. Furthermore, the transportation of diluted bitumen does not differ from that of other crude oils in ways that can lead to conditions that cause mechanical damage to pipelines.

Mark Barteau, a professor of chemical engineering at the University of Michigan, who headed the committee that wrote Tuesday’s report, said that once lightened for transport, the density and viscosity of diluted bitumen “are comparable with those of other crude oils.”

Diluted bitumen “moves through pipelines in a manner similar to other crude oils with respect to flow rate, pressure, and operating temperature,” Barteau added. “There’s nothing extraordinary about pipeline shipments of diluted bitumen to make them more likely than other crude oils to cause releases.”

Barteau emphasized that the study examined dilbit in comparison to the properties represented by dozens of other crudes.

“Recognizing there are a variety of different crudes that are in the syste, including conventional heavy crudes, it is fair to say that diluted bitumen is most comparable to heavy crudes that are in commerce than the light crudes,” Barteau told reporters in a conference call. “But it is certainly within . . . the envelope of properties represented by conventional materials in the pipeline system.”

The study was compelled by legislation enacted in early 2012 that required pipeline regulators to assess whether transporting diluted bitumen translates into higher risks of spills. As part of its work, the National Academy of Sciences  committee studying the issue — including representatives from Houston and San Antonio — examined information from previous pipeline incidents and data on the chemical and physical properties of diluted bitumen and other crude oils.

But the scope of the study was narrow. In commissioning the investigation, the Pipeline and Hazardous Materials Safety Administration asked for it to focus on whether dilbit poses higher pipeline corrosion and failure risks — not what happens to the hydrocarbon when spills happen. The final report also did not examine whether current federal regulations and pipeline oversight was sufficient.

And Barteau acknowledged that existing incident reporting requirements don’t shed a great deal of light on whether problems — be they corrosion or cracking — are associated with pipeline contents.

Carl Weimer, executive director of the Pipeline Safety Trust, faulted the “limited scope of the study” and said major questions remain unanswered.

“The report issued today only tells us that the probability of a failure of a pipeline carrying dilbit is no different than the probability of the failure of an oil pipeline carrying other types of heavy oils,” Weimer said. “PHMSA has so far failed to analyze whether the consequences of dilbit pipeline failures are greater than those of conventional oil spills.”

Anthony Swift, with the Natural Resources Defense Council, stressed that the NAS study “ignores the behavior of diluted bitumen once it has spilled.”

When diluted bitumen poured from an Enbridge pipeline into Michigan’s Kalamazoo River three years ago, the heavy sticky hydrocarbon sank and did not break down like conventional crudes.

The report bolsters arguments by TransCanada and its supporters who insist that even though the proposed Keystone XL project would transport diluted bitumen, synthetic crude oil and other Canadian crudes across the United States, it would not translate into higher spill risks for communities in the pipeline’s path.

That $7 billion project — now under review at the State Department — would be a key avenue for oil sands crude harvested in Canada to reach refineries along the Gulf Coast. In the meantime, the southern leg of the Keystone XL pipeline is already under construction, and, trains are delivering bitumen to the region.

As hard as a hockey puck at 50 degrees, bitumen is an extra-heavy crude oil that generally cannot flow unheated. To ready the harvested hydrocarbon for pipeline transport, it is typically blended with condensate or other diluents — for a blend that ultimately contains 50 percent to 75 percent bitumen by volume.

Last year, the National Transportation Safety Board faulted both Enbridge Inc. and federal regulators for the failure of the oil pipeline that ruptured in southwestern Michigan, causing 843,000 gallons of heavy crude to flow into the Kalamazoo River.

The safety board said there was a lack of oversight by federal regulators at the Pipeline and Hazardous Materials Safety Administration, especially when it came to vetting oil spill response plans. At the time of the spill, just one and a half employees were dedicated to reviewing some 450 emergency plans covering nearly 3 million miles of U.S. pipelines, according to the board. The result, in the case of the Enbridge spill, was the pipeline administration’s approval of “a deficient facility response plan.”