TransCanada begins Keystone pipeline in Texas

HOUSTON – A Canadian company on Wednesday started delivering oil through the Texas portion of a proposed cross-border pipeline that has stirred controversy and tension between the United States and its northern neighbor.

TransCanada began delivering oil from a hub in Cushing, Okla., to customers in Nederland, Texas, early Wednesday, Alex Pourbaix, president of energy and oil pipelines, said at a news conference. The company expects to complete a smaller pipeline that will transport oil from Nederland to refineries near Houston later this year.

The $2.3 billion pipeline from Cushing to Texas is the Gulf Coast — or southern portion — of TransCanada's proposed Keystone XL pipeline. This shorter leg will begin transporting on average about 300,000 barrels of oil daily and should end the year at an average of about 520,000 barrels, Pourbaix said.

The longer Keystone XL, which would transport heavy tar sands crude from Canada and oil from North Dakota's Bakken shale, requires a permit from President Barack Obama because it crosses an international border. That $5.4 billion segment has not yet been approved. Obama fast-tracked the shorter, southern portion of the pipeline with the hope of relieving a bottleneck in Oklahoma.

The pipeline has been mired in controversy. Opponents and landowners argue that tar sands oil is heavier and dirtier than other forms of crude, meaning that any spill would be harder to clean up and that the refining process will be dirtier.

TransCanada, determined to push ahead with the larger pipeline project, touted the thousands of jobs created by the construction of the Gulf Coast portion, and countered opponents' claims that the tar sands are dirty and could increase global greenhouse gas emissions — a concern Obama has also mentioned.

"It will be the safest pipeline in the U.S. to date," Russ Girling, TransCanada's president and chief executive officer, said, adding that this project "is good for America and good for Americans." He said it is a modern pipeline that is better built than any other in U.S. history.

"This is the same kind of benefit the Keystone XL will deliver," he added.

But landowners and residents in Texas and in areas that would be traversed by Keystone said their fight is not over.

Texas landowner Julia Trigg Crawford has been fighting the construction of the pipeline across her family's farm. She argues that Calgary-based TransCanada did not have the right to take her land through eminent domain, and her case is currently in the Texas Supreme Court.

Furious that the pipeline now snakes under her land, Crawford vowed in a conference call Wednesday to walk her farm daily looking for leaks or other problems.

"It's a very sad day for me," Crawford said.

Crawford met with other pipeline opponents earlier this month and officials from the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration to discuss a variety of problems the agency found while the pipeline was being built. The agency has said the pipeline is safe and that all problems have been resolved.

But Crawford said that when she asked whether an agency inspector had looked at the portion of pipeline on her property, the agency was unable to answer her question. At the moment, she said, it appears that only TransCanada's inspectors have been on her land, which is "like me owning a restaurant and having the health department inspector on my payroll."

Jane Kleeb, of Bold Nebraska, a group that has opposed the Keystone pipeline, said the Gulf Coast segment presented a "huge risk" to people along the route noting problems flagged by the federal pipeline regulator during construction.

"Citizens are watching this pipeline like a hawk," Kleeb vowed.