Canadian town gears up for Keystone XL

A couple of hours east of Edmonton, the Alberta prairie gives way to a farm of giant oil storage tanks perched on a small hill. This is the starting point of the Keystone XL pipeline to the United States.

In Hardisty, TransCanada is adding oil storage, building oil-measuring and -testing facilities and running pipe for the Keystone XL. Even though TransCanada’s application for a cross-border permit is still being weighed at the State Department, TransCanada has its permits in Canada and is pushing ahead here.

Building before all the permits are in hand might seem optimistic. But TransCanada chief executive Russ Girling, in an interview in his office in Calgary, said, “We’re into this thing $2.5 billion” — the amount TransCanada has spent on engineering, siting, land leases and equipment. “I’m spending money on the basis that logic will prevail,” he added.

One recent afternoon, cranes were lifting segments of pipe and workers were putting down foundations for new pipeline, buildings and pumping stations. TransCanada’s existing Keystone pipeline also begins here, and it also goes to the United States.

“Hardisty is a hub for oil that comes from the oil sands from Fort McMurray,” said Bryan Templeton, the facilities manager.

TransCanada isn’t the only pipeline company in Hardisty; there are a half-dozen others. Oil from parts of northern Alberta and Saskatchewan arrives here via other pipelines.

TransCanada has three big, gleaming white tanks for the existing Keystone line and three more tanks (still dark, reddish brown, unfinished and unpainted) that it’s installing for Keystone XL.Where the new tanks are going in, TransCanada has built a large retaining wall of stone, and it is burying segments of the 36-inch pipe that will link the tanks to the future main line. Bright orange casing is being installed for fiber-optic cables that will carry information alongside the pipe.

Each of the new tanks can hold 350,000 barrels of oil, providing more than a million barrels of storage capacity for each line. The company has other, smaller buildings for testing the viscosity and other qualities of each “batch” of oil (measuring about 140,000 cubic feet) before it is sent down the existing Keystone line.

“As Fort McMurray continues to grow,” Templeton said, “there will be more pipelines built here or in Edmonton.”

Steven Mufson covers energy and other financial news.
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