US Senator pushes for oil sands pipeline approval

Wed Feb 16, 2011 11:08pm GMT

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* Senator says pipeline critical for energy security

* Pipeline project pushed back due to permitting delays

* Enviro groups say pipeline raises safety concerns

By Ayesha Rascoe

WASHINGTON, Feb 16 (Reuters) - A leading Republican Senator on Wednesday called for the White House to approve the Keystone pipeline that would transport crude from Canadian oil sands to the Gulf coast.

Senator Dick Lugar, the top Republican on the Senate Foreign Relations Committee, said the State Department should move to quickly approve TransCanada's (TRP.TO) application to build the 2,000-mile Keystone XL pipeline.

"Boosting trade with Canada offers tremendous opportunity to improve our energy security," Lugar said in a speech to the Alliance to Save Energy.

"This pipeline is critical to American efforts to enhance the reliability of our oil supplies," he added.

Lugar said the United States is too dependent on oil from hostile nations and the government must work to decrease vulnerability to supply shocks from the Middle East.

TransCanada on Tuesday said permitting delays have pushed the timeline for the start-up of the pipeline back by about three months, with the line now unlikely to be in service before the second-quarter of 2013. [ID:nL3E7DF1GA]

The State Department is still reviewing its draft environmental analysis of the project. The department said this week it plans to complete this review during the first quarter of 2011 and then will decide whether supplemental analysis is needed.

The pipeline has run into stiff opposition from green groups and some lawmakers who say the pipeline poses an environmental threat and would lock the United States into dependence on "dirty oil" from Canadian oil sands.

Oil sands pipeline companies are putting a product through their lines that raises the risks of leaks and spills, a report by the Natural Resources Defense Council and other green groups said Wednesday.

The report, "Tar Sands Pipelines Safety Risks," said increasingly pipelines transporting oil sands crude into the United States are carrying diluted bitumen. They say that is more corrosive and acidic than average crudes. Pipelines should take special precautions until regulators address the risks, it said.

Terry Cunha, a TransCanada spokesman, said the company transports a mixture of heavy crude and light bitumen from the oil sands but he denied that it was any different that crude oil that is currently being distributed across the United States. "Any information about our crude being any different is false," Cunha said. (Additional reporting by Timothy Gardner; Editing by David Gregorio)

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