July 15, 2011 / 9:49 PM / in 6 years

US senators want more study of Canada oil pipeline

* Recent leaks show need to examine safety of Keystone XL

* Enviro groups argue oil sands more corrosive to pipes

* State should study alternative routes for Keystone

By Ayesha Rascoe

WASHINGTON, July 15 (Reuters) - The U.S. State Department needs to study what corrosive effects Canadian oil sands crude may have on pipelines before the department decides on a $7 billion project that would transport the heavy crude to the Gulf coast, a group of senators said on Friday.

More than half a dozen Democrats said they remain concerned about TransCanada’s (TRP.TO) proposed Keystone XL pipeline, which requires State Department approval because it crosses the Canada-U.S. border.

The planned 700,000 barrel-per-day pipeline has run into fierce opposition from green groups and land owners along the proposed routes.

The senators said recent leaks from Exxon Mobil’s (XOM.N) Silvertip oil pipeline and TransCanada’s existing Keystone pipeline underscore the need for a “careful assessment” of spill risks and the route of the Keystone XL.

“We believe several remaining questions must be addressed before the permitting process can proceed,” the Senators said in a letter to the State Department.

The department should work with the U.S. pipeline regulator to study the impacts of diluted bitumen on the environment and pipelines, the lawmakers said.

Environmental groups argue that diluted bitumen, extra-heavy crude wrung from the oil sands and blended with condensate or other lighter hydrocarbons so it can flow in pipelines, is more corrosive and toxic than conventional crude oil.

Oil industry and pipeline companies contend that there is no evidence that diluted bitumen is more corrosive than other types of crude, however.

Following criticism of its original environmental review of the pipeline project, State issued additional analysis of the duct. The Environmental Protection Agency still called for more study of potential project impacts, however. [ID:nN07101222]

The group of lawmakers, which included Senators Patrick Leahy and Barbara Boxer, also urged the department to analyze alternative routes for the pipeline that would bypass the Ogallala aquifer.

The aquifer, one of the world’s largest, spans eight states in the Great Plains and yields nearly a third of the country’s water used for irrigation. (Editing by David Gregorio)

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