Rare permit for Keystone pipeline in spotlight after spills

The massive Keystone pipeline has been transporting oil from Alberta to the United States at a higher-than-standard level of pressure since it started operating in 2010, thanks to a special permit granted by U.S. regulators on the condition operator TC Energy Corp. would monitor the line closely.

However, after four significant leaks, including one of the largest of the decade in North Dakota last week, this exemption is in the spotlight and users of the line are concerned it may be at risk.

The coveted permit granted in 2007 allowed TC Energy, then known as Transcanada, to use a higher-than-standard rate of pressure for Keystone in rural areas, according to U.S. regulatory documents reviewed by Reuters, meaning more oil could flow through the pipeline than similar-sized U.S. lines.

Keystone had to agree to more than 50 safety conditions to receive the exemption — given out only twice since by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA).

Risk assessments the company provided to regulators indicated the chance of a leak of more than 50 barrels to be “not more than once every seven to 11 years over the entire length of the pipeline in the United States.”

Instead, over the past decade Keystone has had two leaks of 400 barrels and two leaks of several thousand, according to PHMSA data.

TC Energy spokesman Terry Cunha declined to comment on the timing. He said the company has operated under high maintenance and safety standards. PHMSA declined to comment, citing the ongoing investigation into the spill, the cause of which is still not known.