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Opponents slam Enbridge’s plans to expand flow of oil sands crude into U.S.

Enbridge Inc.’s pipeline to carry tar sands oil between Oklahoma and Illinois can proceed, a federal judge ruled, as companies expand their capacity to move petroleum in the U.S.

DANIEL ACKER/BLOOMBERG

Plans by Enbridge, a Canadian pipeline company, to increase the flow of Alberta oil sands crude into the United States while – in the view of opponents – avoiding the presidential permitting process, have enraged environmentalists seeking to block development of Canada's vast reserves.

Opponents to the Enbridge plan are threatening legal action and demanding the U.S. State Department reverse the green light given Enbridge.

"We're here to express our outrage and our opposition to what is a scheme by Enbridge to avoid public review and to expand the transport of dirty tar sands oil into the United States," said Michael Brune, executive director of the Sierra Club.

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But Enbridge insists its plan is only a short-term fix while a full permitting application is under way.

For more than five years, environmentalists have managed to block TransCanada Corp's Keystone XL project, turning the $5.5-billion pipeline into a litmus test of President Barack Obama's commitment to battling climate change by cutting greenhouse-gas emissions.

The Enbridge project would use a regulatory loophole to avoid triggering a full State Department review, which is required for all new transborder pipelines.

Enbridge plans to use a smaller, older, under-used pipeline running parallel to its existing Alberta Clipper line to move the additional flows across the 49th parallel.

By using existing lines, Enbridge doesn't need a new permit and avoids the extensive environmental review by the U.S. State Department. Enbridge intends to build a short link three kilometres north of the Canada-U.S. border between the Alberta Clipper pipeline and Line 3, originally built in 1968. Once across the border, the oil sands crude would be funneled back into the Alberta Clipper line which is being upgraded to cope with higher pressure pumps.

The State Department confirmed that the use of an existing parallel pipeline just to cross the border would avoid a full review. "Enbridge's intended changes to the operation of the pipeline outside of the border segment do not require authorization from the U.S. Department of State," Patrick Dunn, deputy director in the Bureau of Energy Resources, confirmed in a July 24 letter.

This "action taken by a low-level bureaucrat threatens to undermine the president's commitment on climate change," Mr. Dunn said.

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Mr. Obama has repeatedly delayed deciding on whether to approve Keystone XL, most recently until after this November's mid-term elections where Democrats in several states desperately need the support of environmental groups as they battle to avoid losing control of the Senate.

Canadian oil sands – dubbed tar sands by opponents – have become iconic as environmentalists fight to stop development of the reserves as part of the campaign to reduce greenhouse gas emissions.

Oil companies have increasing turned to shipping oil by rail as pipeline projects have been thwarted or delayed.

Bill McKibben, founder of 350.org, another group leading the campaign to thwart expansion of Canada's oil sands, called it "nothing short of outrageous" that the State Department had quietly agreed to the Enbridge plan.

"We've spent the last three years slowly and patiently uncovering the collusion between the State Department and the oil industry over the Keystone pipeline," he said in a conference call. "The Obama State Department clearly thinks it's okay to collude with the oil companies behind closed doors and allow tar sands oil to cross our borders without exposing those plans to scrutiny.

But Enbridge says it has followed the rules and the short-term capacity increase will only amount to 120,000 barrels a day.

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"These optimized measures for moving oil across the border with the use of interconnections allows us to meet our customers' requirements in the short term," said Terri Larson, an Enbridge spokeswoman, adding: "they do not address the longer term need to move larger volumes of crude oil."

Eventually, Enbridge hopes to increase the Alberta Clipper line to 800,000 barrels a day, up from the existing 450,000 barrels per day. That is close to the Keystone XL planned capacity of 830,000 barrels per day.

"This blatant scheme to move up to twice the amount allotted in Enbridge's permit (is) ... a clear misinterpretation of both the letter and the spirit of the law," the Sierra Club and other opposed groups said in a joint statement.

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Paul More

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