Canadian firm plans Boone County oil pipeline

An oil pipeline is coming to Boone County. The 30-inch pipe is snaking its way from Alberta, Canada, across Wisconsin and down to the Illinois line. The pipeline is being built by Enbridge, Inc., headquartered in Calgary, Alberta, Canada.

Enbridge is a subsidiary of Embridge, Inc. Enbridge is based in Houston and has right-of-way offices in Stevens Point, Wis., and Sycamore, Ill. Regional offices are in Superior, Wis., And Griffith, Ind.

The company’s Southern Access Program will carry heavy crude oil from the Alberta oil sands down across Boone County, DeKalb County, LaSalle County and Livingston County to a pipeline terminal at Flanagan, Ill.

“We’re in the very early stages of this project,” said Dave Henderson, community relations spokesman for the company. “There are two phases. The first one started last year from Superior to the Delavan pumping station north of Whitewater, Wis. We’ve just begun work on stage two.”

The pipeline is meant to carry 400,000 barrels a day of crude oil from the Alberta oil sands to a point near Chicago where the pipeline will connect with another line called the Spearhead Pipeline, which will carry the oil south to Wood River near St. Louis.

Officials of the affected counties were given information on the proposed right-of-way in February, Henderson said. The company is seeking land surveys along the proposed route and talking with land owners.

Henderson said actual construction will begin in 2008 with oil flowing by 2009. “We have to start this early,” he said, “because of all the surveys and time it takes to get all the permits. We’re trying to avoid developed areas.”

The pipeline would enter Boone County at Beaverton and Stateline roads, according to Henderson, and run down the eastern part of the county into DeKalb County.

Belvidere Mayor Fred Brereton said he had heard little about the project. The city was not notified because the pipeline will be well east of Belvidere. “I heard some of the particulars,” he said. “The city was not notified.”

Dan Cain, director of the Boone County Conservation District, said he was also lacking detailed information. “The only thing I’ve got is what’s on the Internet,” he said. “We’re concerned. Our board is not aware of this. I’m aware of it, but that’s all.” Cain said the matter likely will be presented to the board later this month.

Cain is worried about possible environmental problems with the pipeline, which will be underground. Survey markers already in place show the line may run along the Piscasaw Creek and, perhaps, other waterways.

The oil extracted from the Alberta deposits, also known as tar sands, is found among sand fields. The bitumen yields a heavy, viscous oil that must be processed to convert it to an upgraded oil before it can be refined into gasoline and other products.

Bitumen is 10-12 percent of the oil sands in Alberta. Deposits there are said to be second in size only to the Saudi Arabia oilfields. In 2003, Petro-Canada, which oversees operations in Alberta, called a halt to oil sands development because of rapidly accelerating costs of extracting the oil. Technology has improved since then; and by 2005, oil sands production were expected to go up to about 50 percent of Canada’s total output.

Oil sands must be mined in place, rather than pumped from the ground. The oil is so thick and sticky, it must be diluted before it will flow through a pipeline. The Alberta reserves are estimated at 2,500 Gb (billion barrels).

In addition to the pipeline route mentioned, the company has proposed a future expansion from Flanagan, Ill. to Patoka,Ill., where a major pipeline hub is located. That would allow distribution of crude in several directions through various other pipelines.

The first stage of expansion will add 44,000 barrels per day of capacity next year and an additional 146,000 barrels per day early in 2008. The total cost of the U.S. portion of the expansion was estimated in 2005 at $815 million.

Patrick Daniel, president and CEO of Enbridge, commented: “We’ve worked closely with customers to arrive at the optimum pipeline solution to meet their needs to access markets of choice. The Southern Access expansion is one of the cornerstones of a broader market access strategy undertaken by Enbridge and the Partnership to provide timely, economical, integrated transportation solutions to connect growing supplies of production from Alberta’s oil sands to key refinery markets in the U.S. and beyond.

Daniel added: “The mainline expansion will ensure capacity to Chicago, at favorable tolls, through 2009. With the mainline expansion component of the strategy now under way, our next priority will be to finalize discussions with shippers and CAPP (Canadian Association of Petroleum Producers) on the Southern Access extension. Together, the Southern Access expansion and extension form a pipeline network that will provide lower tolls than any other alternative for transportation of Canadian crude to U.S. destinations beyond Chicago, including Patoka, Wood River, Cushing (Okla.) and the U.S. Gulf Coast.”

Henderson said there will be employment opportunities as construction of the northern Illinois link begins. “The way these projects are done, we have a finite range of time,” he said. “Most of the people we need would be non-employees. The lion’s share would be hired by the construction contractors. A sizeable percentage of people would be hired from local sources.”

He said the project would furnish “a nice economic stimulus” for the area, not only through construction jobs but also by purchases made by workers on the pipeline from local businesses.

From the April 5-11, 2006, issue

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