Keystone pipeline segment begins oil delivery

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.

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.