Pegasus Spill Should not Affect Keystone Decision: Former PHMSA Official on Platts Energy Week

Also Sunday: Former EPA Chief on Nuclear Energy; A New Shale Alliance

Washington - April 8, 2013

A late March oil pipeline leak in Arkansas should have no effect on the Obama administration's decision of whether to approve the Keystone XL pipeline, a former senior official with the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) said Sunday on Platts Energy Week, an all-energy news and talk television program.

Brigham McCown, a deputy PHMSA administrator under George W. Bush, said the heavy crude oil leak on ExxonMobil's Pegasus pipeline would not change perception of the Keystone XL pipeline. Public perception of Keystone XL is already "pretty solidified either for or against the pipeline," said McCown, a managing director of United Transportation Advisors. He said he believes the Obama administration will approve Keystone XL.

McCown dismissed claims that tar sands oil, which the Keystone XL pipeline would transport, poses a greater risk of corrosion or would be more difficult to clean up than other types of crude oil.

He also pointed to statistics that showed a drop in pipeline releases, the volume of spills, breakage due to corrosion and damages from excavation.

"Really, if you look at the trend lines, I think the regulators have a very good story to tell and so does the industry," he said. "Things have gotten a lot better, and when we do have incidents, most of them are smaller."

David Goldwyn, president of Goldwyn Global Strategies and a former State Department energy official, said the leak in Arkansas, which may have caused as much as 10,000 barrels of oil to flow into a residential neighborhood, may force a closer look at the Keystone XL decision. But the administration will not change its decision based on that leak, said Goldwyn, who also said he believes the pipeline will win approval from the White House.

"I think people will rightly ask the question: 'Can this be repeated? Would this happen to Keystone XL?'" Goldwyn said. "But I think when the regulators take a second look, as I think they will, they'll get some comfort there."

Other Program Highlights

Christine Todd Whitman, a former New Jersey governor and an Environmental Protection Agency administrator during the Bush administration, said that while low natural gas prices have "slowed" nuclear power development in the U.S., it should not stop it. Gas prices are currently low, but they are likely to go back up, she said.

Whitman, who is now co-chair of the pro-nuclear Clean and Safe Energy Coalition, made the case for more U.S. nuclear energy, citing its clean air and climate change advantages over fossil fuels.

"There is no silver bullet, there's no one answer for all our energy needs," she said. "We do need the all-of-the-above strategy that’s been called for and that does include nuclear."

Also on the show, Mark Brownstein, a chief counsel with the Environmental Defense Fund, defended the Center for Sustainable Shale Development (CSSD), a Pittsburgh-based group of environmental organizations and energy companies that is developing standards for shale development.

The CSSD, whose members include the Clean Air Task Force, Chevron and Shell, has been criticized by some green groups, particularly the Sierra Club, for being too lenient toward industry.

"There's reason to be skeptical," Brownstein said. "But, at the same time, when companies step forward and say that they want to try to do things better and want to sincerely constructively engage, we’ll take that opportunity every time."

The group has developed a series of standards for shale development, including barring open pits for flowback water, residual water from hydraulic fracturing that gradually flows back to the earth’s surface, and requiring 90% of water used in drilling to be recycled.

"I think that what you're finding is that you have companies that are very much rooted in the communities in which they are doing business, and they understand that in order to be able to develop the product, they have to be able to assure communities that they can do it safely," Brownstein said.

During Sunday’s “Market Spotlight” segment, Platts Gas Daily Editor Bill Holland discussed the latest casualty of low natural gas prices – GMX Resources, Inc., an independent oil and gas company – which recently filed for bankruptcy.

Platts Energy Week airs on Sundays in Washington on WUSA, a CBS affiliate, and in Houston on KUHT, a PBS affiliate, as well as on other PBS stations in the U.S. The program is also available on the web at

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