TransCanada’s Keystone XL Pipeline: Under Cover of Darkness

Prescott said 85 percent of the oil that will be piped to Nederland already is committed to clients who have long-term contracts but he won’t reveal who are the holders.

By Bruce Branick | April 1, 2013

Jim Prescott, TransCanada spokesman

Oil for Export, or American Prosperity?

We still don’t know the answer to that question, but a critical segment of the Keystone XL Pipeline is mighty close to conclusion. The map segment referred to as the “Gulf Coast Project” is nearly complete, as a finite pipeline capable of carrying Canadian oil sands from Hardisty, Alberta to Nederland, Texas. The Gulf Coast Project is that portion of the Keystone XL Pipeline connecting Cushing, Oklahoma to refineries in the Beaumont-Nederland-Port Arthur area west of Sabine Lake, where the refineries are situated.

While ours is a free-market economy, Americans should not have to sacrifice their lands and their constitutional rights to permit a foreign company of any kind to find an export market through the heartland of the United States, especially if the product is going to benefit other nations, as there’s good reason to believe is the case with the Keystone XL Pipeline.

Jim Prescott “spokesman” for TransCanada, which is building the Keystone XL Pipeline, recently told Nederland Rotary members and newsman Dan Wallach of the Beaumont Enterprise that “85% of the oil that will be piped to Nederland already is committed to clients who have long term contracts.” I asked Mr. Wallach if he knew who those long-term buyers were? He told me he had asked that same question of Prescott at Rotary earlier last month and his response was that the information was “proprietary” and couldn’t be discussed because of “competition?”

Now, is that transparency?

The Keystone Pipeline, not to be confused with the Keystone XL Pipeline, has existed for some time now running from the massive oil sands of Hardisty, Alberta, Canada eastward through the province of Saskatchewan skirting the city of Regina until it turns abruptly south just outside of Winnipeg, Manitoba crossing the U.S. border north of Fargo, North Dakota. Heading directly south, Keystone veers east-southeast at Steele City, Nebraska terminating at Wood River-Patoka, Illinois, where it is presently carrying oil to at least two refineries for actual rendition to SAE 30 WT, and public sale.

On the Canadian side of the border, the Keystone Pipeline from near Medicine Hat-Regina-Winnipeg skirts the northern edge of the Bakken Formation, an area laden with shale oil and gas wealth also covering northeast Montana and northwest North Dakota.

Routing and maps of the proposed Keystone XL Pipeline indicate a starting point at the oil sands of Hardisty, Alberta running south-southeast through the southern portion of the Bakken Formation on the U.S. side of the Canadian border through that ‘rarin’ cowboy town of Baker, seat of Fallon County, Montana, skips onward, where it metamorphoses into a Prudhoe-Alaskan style pipeline – all above ground – over the sand hills of western Nebraska closely skirting the Ogallala Aquifer before ending up at Steele City. Once completed, the Keystone XL Pipeline connects with the Cushing Extension. Then, with the Gulf Coast Project leg to the Nederland, Texas Sun Oil Logistics receptor, surrounded by huge Texas oil refineries, especially formulated for oil sands, sitting on the Sabine shipping channel and estuaries along the lake and only 15 miles from the Gulf of Mexico, from whence oil and gasoline cargoes have been shipped off to sea for a hundred years.

Not a shadow of doubt, the Gulf Coast Project segment of the Keystone XL Pipeline has provided perhaps a maximum of ten-thousand temporary jobs to Texans, spent millions of dollars in the state, for which newly hired Texans are grateful, as are state, county, and city officials frenziedly looking for Obama-lost revenues caused by enormous unemployment over the nation.

But, when frustrated by the stubborn who refused to cut up special pieces of their income earning land, TransCanada’s XL freely used eminent domain as a cudgel to whip those recalcitrant American landowners into submission.

The question of whether energy companies in the Lone Star State may, as instruments of the state, apply the coercive government power of eminent domain depends on Texas law, if an entity is considered a ‘common carrier.’ In the Denbury-Green Pipeline case, the Texas Supreme Court determined eminent domain could not be applied because the company was not considered a common carrier, having moved product to a wholly owned subsidiary. On the other hand, in the case of Texas landowner Julia Trigg Crawford, Lamar County Court at Law Judge Bill Harris initially ruled in favor of TransCanada as a common carrier because in addition to Alberta oil sands its pipeline will carry Bakken oil and it doesn’t own the Nederland refineries.

Surely, unemployed Americans are happy about the jobs provided by the Keystone XL Pipeline, as are some landowners with windfall loot. But, if “85% of the oil piped to Nederland is already committed to clients who have long-term contracts,” as Dan Wallach discovered, and long-term contracts involve China or any other country, how does this help Americans become energy independent, lower the price of gasoline and diesel at the pump that is killing the U.S. economy?

John Kerry and his State Department will have to give an unequivocal “Yes, or No” very soon, as to whether the Keystone XL Pipeline may cross the U.S. border out of Hardisty, Alberta into Montana and begin coursing through the heartland of America to Texas refineries for shipment to anxiously waiting foreign customers.

Unless we are told otherwise, having TransCanada lift the veil of darkness on this important question is more a matter of our constitutional property rights and national security than their proprietary rights and concern over a little competition. This is our country – it’s our land – and we as Americans have a right to know, who are the holders of those long-term oil sand contracts?

Bruce Branick served his nation for over 5 decades at sea. After three years of North Atlantic convoy duty as a Radioman in the U.S. Coast Guard’s Greenland Patrol and a fourth year attached to the Richmond Naval Air Station, a Florida Blimp Base concerned with Anti-submarine Warfare, he spent 50 years in the U.S. Merchant Marine as a Radio Officer, voyaging the world over from the Arctic to Antarctica, from Galveston to Istanbul, from Suez to Hong Kong. Mr. Branick, a contributor to

SFPPR News & Analysis, is author of Memoirs of a Loose Cannon and Two If By Sea (1970).