TPT May 2009

From the AmericaS

He wrote, “These blasts, killing three and injuring one, have served as a reminder of the dangers associated with the massive underground pipe system tunnelling beneath streets and delivering a flammable product to nearly 1.5 million customers in the state. The system’s 21,000 miles of gas main would be nearly enough to travel around the circumference of the Earth. More than a third of the system relies on old, antiquated pipes.” ( ‘After the blasts, a cloud of questions,’ 15 March). The recent rash of explosions is under investigation, and there is no evidence that poor oversight, shoddy maintenance, or aging infrastructure played a direct role. But the state tracks the number of old bare steel and cast-iron pipes in the ground and requires gas companies to have plans to phase them out. According to company officials interviewed by Mr O’Brien, Bay State Gas Co launched a programme four years ago to replace 570 miles of old steel pipe by 2020. National Grid expects to replace up to 50 miles this year. And NStar has been replacing about 16 miles of old pipe per year, even though many old pipes are aging well. According to Thomas Hart, NStar’s director of gas engineering, “Some large- diameter cast iron pipes are still very thick and still performing very well. And there are studies that show they will still be performing well for decades.” The Globe noted that Massachusetts, with eight state inspectors, has twice as many as required by federal guidelines. The most recent federal audit of the state Department of Public Utilities gave its pipeline safety team a nearly perfect score. And state regulations are often more stringent than federal standards, requiring thicker walls on some pipes and greater volumes of odour-inducing

chemicals in the gas. Residents typically smell leaking gas long before it becomes a threat. Even so, with 7,900 miles of antiquated gas pipes in the ground in Massachusetts, probably suspicions about the infrastructure are inevitable. › Federal corrosion control regulations enacted in 1970 stopped US gas companies from installing cast iron pipes, either initially or as replacements. Around the same time, Mr O’Brien pointed out, gas companies started moving away from bare steel pipes, as well. In their place came plastic pipes – more pliable in shifting soil – and cathodically protected coated steel pipes that carry a slight electrical charge for better corrosion resistance. A comment by Charles Batten, a former chief of pipeline accident investigations for the National Transportation Safety Board, illustrates the trade-off between better and best in the matter of high-pressure natural gas transport through bare steel and cast-iron pipes. “It’d be nice to go through and rip out all the old pipes and put in new pipes,” Mr Batten told the Globe. “But that’s not going to happen.” Petro-Canada and Suncor Energy, both active in the Canada oil sands, will join forces A proposed merger of two of the largest operators in Canada’s oil sands industry is of more than usual interest, even for an all-stock deal worth about $15 billion. The plan, announced 24 March, to combine the oil giants Petro-Canada and Suncor Energy would form a new company with a market capitalization of about C$43 billion (US$35 billion). It also would erase the last visible traces of former Prime Minister Pierre Elliot Trudeau’s audacious programme of the 1960s for bringing Canada’s energy resources under government control. Petro-Canada, which earned C$3.8 billion (US$3.1 billion) last year, was in fact controlled by Ottawa until 1995. The company operates refineries and a nationwide chain of service stations. But its more significant presence is as an operator of conventional and oil sands production sites in Canada. Also in 1995, Suncor, then a subsidiary of Sun Oil, was sold by its American owners and has become the third-largest oil and gas company in Canada. Suncor began investing in oil sands after World War II, and was the first company to produce synthetic crude oil from the sands deposits. While this extraction method is condemned by some environmental groups, oil sands technology has helped make Canada the largest supplier of crude oil to the United States. The Petro-Canada component of Mr Trudeau’s National Energy Program met with strong opposition in the province of Alberta, oil sands country and the centre of Canada’s energy industry. Among other objectionable provisions, the idealistic – some said Utopian – prime minister assigned Petro-Canada a number of responsibilities that hampered its market performance. › Investors in Petro-Canada are now to have a delayed satisfaction. The merger with Suncor Energy is expected to save about $300 million a year. Richard L George, the president and chief executive

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M ay 2009

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