After building some momentum since the rejection of its initial application early this year, the Keystone XL Gulf Coast Access oil pipeline has hit another stumbling block in the form of an injunction from a Texas court.
The Los Angeles Times reports that Texas farmer Michael Bishop has challenged that TransCanada, the company behind the much-discussed and highly contentious pipeline, is failing to meet the terms of its contract with him.
Bishop, who Bloomberg reports owns a farm outside the East Texas town of Nacogdoches, previously claimed that TransCanada coerced him into signing an agreement to allow the company to build the pipeline through his land.
Now he insists that the company's plan to use the Keystone to ship bitumen, the heavy, tar-like petroleum mined in vast quantities in Alberta, would breach the contract that would allow TransCanada to transport "crude oil" over his lands.
"What they're calling tar sands oil is not oil by anyone's definition," Bishop told The Times. "I'm very concerned about a leak. They need to pull the permit, go back and re-register this on the federal level as a hazardous-material pipeline and see if they can get it permitted then."
Initially a non-starter when a federal judge found Bishop failed to properly file the lawsuit, Texas County Court Judge Jack Sinz nevertheless issued a temporary restraining order preventing TransCanada from going forward with construction on Bishop's land for at least two weeks.
Safety concerns are not a new issue for the Keystone pipeline, with the initial rejection of its application largely coming down to fears about its course over the Ogallala aquifer in Nebraska, one of the most important fresh water sources in the Great Plains.
President Barack Obama suggested that the decision could be attributed to the strict timeline imposed primarily by Republican legislators, rather than problems inherent in the application. Many observers were surprised at the vehemence of opposition and some analysts suggest the deadline largely represented a convenient excuse to sidestep a thorny issue.
However, InsideClimate News suggests that TransCanada has failed to implement many of the newest pipeline safety measures, including advanced monitoring equipment and a concrete "cap" designed to prevent punctures.
Despite numerous objections, TransCanada officials suggest that the pipeline is on schedule to be completed by late 2013.
The 700,000 bpd Keystone XL pipeline is also under some considerable scrutiny by market participants. It would play a considerable role in reducing the swelling stockpiles at Cushing, Oklahoma, and relieving more of the US's dependency on foreign crude oil imports by reallocating cheaper crude oils to the Gulf Coast where the majority of the country's refining infrastructure resides.
Genscape, Inc. plays a key role in monitoring these developments, not only real time, but provides transparency in construction progress. This pipeline will play a major role moving forward in establishing a better pricing mechanism for the American people and the fuel they get from these refiners to fill up their car with. This pipeline will also play a major part in how the economic recovery progresses. Cheaper inland oil or more completions amongst producers with a ceiling on refiner capacity means lower input prices and translates into not only more jobs, but lower cost of living for the average American family.