EPA Criticizes State Department Keystone XL Draft EIS

The EPA says it has some fairly significant problems with the State Department’s draft environmental impact statement on the Keystone XL Pipeline. The State Department draft supplemental EIS (DSEIS) was based on assessment of a new alternative route proposed by TransCanada.

That route now avoids the environmentally-delicate Sand Hills region of Nebraska but does still pass through the Ogallala Aquifer, which critics claim could be badly fouled in the event of a pipeline spill. The EPA wants the State Department to take a closer look at alternative routes which parallel the existing Keystone Pipeline.

The letter from Cynthia Giles, assistant EPA administrator for enforcement and compliance assurance at the EPA, on April 22 to the two state department officials running the EIS, says the State Department strengthened past analyses but that three areas in the draft EIS needed work. The State Department’s central thesis in the DSEIS is the Canadian tar sands would be carried to the U.S. by railroad if not by pipeline, and therefore no greenhouse gas emissions would be achieved by scuttling the XL project. The EPA questioned the accuracy of that conclusion and said the draft SEIS needed “a more careful review of the market analysis and rail transportation options.”

The EPA also underlined the potential environmental dangers to public health and safety from a pipeline spill, differentiating between an oil spill and a diluted bitumen spill such as the Enbridge oil pipeline spill in the Kalamazoo River in 2010. The diluted bitumen, called dilbit, sank to the river bottom and mixed with the soil there. The river has not come clean in the last three years. The EPA said dredging the river is now required.

Lastly, the EPA argued that the DSEIS did not contain a detailed analysis of Keystone Corridor Alternative routes, which would parallel the existing Keystone pipeline and would “likely reduce further impacts to groundwater resources.”

The State Department, which has the final say on Keystone XL approval, has already said the risks of an environmental disaster along the latest route are minimal, especially given the extra safety steps TransCanada has committed to take. State is probably leaning even more towards approval after a vote of 62-37 by the U.S. Senate in late March in support of the project.

New workplace requirements for cranes in underground construction

Starting May 23, underground construction companies will have to adhere to the rules set by the Occupational Safety and Health Administration (OSHA) on use of cranes and derricks. This means companies who do underground construction or demolition will now have to comply with subpart CC of the general cranes construction standard, which was greatly expanded in 2010, 40 years after it was first established. There had been a separate, limited section in the cranes standard called subpart DD which applied to certain activities done in underground construction and demolition. Subpart DD had limited requirements. Industry groups generally supported that modernization of the standard.

Subpart CC includes operator-certification requirements, for example. OSHA says that applying subpart CC to underground construction work and demolition work benefits contractors who also perform other work because they will be subject to a single standard instead of having some of their activities covered under subpart CC and other work covered by the requirements in subpart DD. Subpart CC applies to power-operated equipment, when used in construction, which can hoist, lower and horizontally move a suspended load.

The 2010 final cranes rule contains many important requirements regarding personnel qualifications and responsibilities, in addition to the operator certification requirements, such as requirements for signal persons, and requirements for operating the equipment. The operator certification requirements take effect on Nov. 10, 2014.

Besides applying subpart CC to underground construction, OSHA at the same time expanded the underground construction standard (which is separate from the cranes standard) to restore the provision allowing employers to use cranes to hoist personnel for routine access to the underground worksites via a shaft without requiring them to demonstrate that conventional means of access are more hazardous or impossible for this purpose.

FERC gives New England electric market gas scheduling latitude
The Federal Energy Regulatory Commission (FERC) took a first, tentative step to give New England utilities more flexibility in arranging for natural gas supplies. But the order issued on April 24 left at least one pipeline executive wondering whether the Commission actually accomplished anything of value.

Bottlenecks in New England mostly during peak periods have been something of a cause célèbre at the commission in the past year, as it has held a number of technical conferences aimed at generating ideas on how natural gas pipelines and electric utilities — and the ISOs which serve utilities — can better communicate and schedule with one another in times of high natural gas demand. New England is the prime troubled spot, with the Midwest also experiencing gas supply shortfalls.

The latest FERC conference was held on April 25. In her opening statement, Commissioner Cheryl LaFleur referred to theoOrder the commissioners had approved the day before allowing the New England Power Pool (NEPOOL) new flexibility with regard to the timing of natural gas purchases. On Feb. 7, ISO New England Inc. (ISO-NE) and NEPOOL jointly submitted two alternative sets of proposed revisions to the day-ahead market activities in ISO-NE’s Transmission, Markets and Services Tariff. ISO-NE is the regional transmission organization (RTO) and essentially the electricity market regulator. The NEPOOL is composed of electric generators and wholesale electric markets operating in the market.

But the FERC Order left Richard Kruse, vice president for regulatory affairs at Spectra Energy, at a loss. Spectra owns the Algonquin Gas Transmission LLC and Maritimes & Northeast Pipeline, L.L.C. which bring gas to New England. Spectra’s capacity to New England is fully booked, which is a problem for New England utilities switching to natural gas, who are desperate for the cheap Marcellus Shale gas Algonquin and Maritimes bring to New England. Kruse says, “Neither proposal really did anything from a gas pipeline standpoint. It was a huge fight over a one-our difference. I don’t understand what they were fighting about. From a gas/electric scheduling standpoint, the oder did not help them at all, either ISO-NE or NEPOOL.”

In fact, Algonquin has been marketing its Algonquin Incremental Market (AIM) expansion project for years, and is in the process of signing precedent agreements. “But the New England electric markets are not stepping up for our capacity,” he states. “In our view, electric generators are not getting a price signal out of ISO-NE to make it worthwhile for them to sign up for firm capacity.”

Both ISO-NE and NEPOOL asked for earlier clearing of the day-ahead energy market and earlier completion of the initial Reserve Adequacy Analysis (RAA). But the ISO-NE proposal began and ended the processes one hour sooner than under the NEPOOL proposal. NEPOOL argued that the extra hour between 9 a.m. and 10 a.m. provided under the NEPOOL proposal is critical, because it enables gas-fired units to benefit from reasonable transparency, robust price discovery, and competition in the natural gas commodity marketplace when formulating day-ahead energy bids.

The FERC Order came down on the side of NEPOOL with the commission arguing it has the potential to not only enhance reliability but also better account for market efficiency.

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