Keystone XL may be rejected: ex-PHMSA chief

OREANDA-NEWS. June 03, 2015. President Barack Obama may not greenlight TransCanada's planned 830,000 b/d Canada-US pipeline Keystone XL, said former Pipeline and Hazardous Materials Administration (PHMSA) administrator Cynthia Quarterman.

"With the amount of crude that's being produced in this country now, I think it's quite possible that the president might not approve the project," Quarterman said today at the Argus Petroleum Transportation Summit in Houston. "I don't know what's going to happen but it's quite possible."

Quearteman said she also thought new crude-by-rail rules issued by the Department of Transportation recently are likely to stand despite efforts by Congress to legislate additional rules and lawsuits filed by opposition groups.

"I think this rule will stand just because the process was so thorough," Quaterman said. "I can't really see any of those pieces of legislation moving forward in this Congress."

Members of Congress have proposed various bills that would shorten the timeline for the phase-out of older tank cars, regulate vapor pressure of crude being transported by rail and expand speed limit restrictions on crude trains. There's been strong industry opposition to the new crude-by-rail rules, which require sturdier tank cars and all high-hazard flammable trains to have new braking technology after 2023. It also requires the oldest, non-jacketed DOT-111 cars to be removed from crude and other packing group I materials service or be retrofitted by 1 January 2018.

The American Petroleum Institute has sued over the new rules, saying the timeline is too short, while environmental groups have sued to say the timeline is too long.

"In regulator speak we say, ‘Okay, I think we must have gotten it just about right if everybody hates it,' but we will see what will happen in the lawsuits going on," Quarterman said.

Regulators and the industry also need to focus on prevention strategies such as rail inspections and operational issues, she said.

"There has been a lot of focus on tank cars, an undue focus in my view, because it is not a silver bullet to safety. It is only part of a broader mitigation strategy," Quarterman said.