Texas Leg of Controversial Keystone Pipeline Starts

TransCanada Corp has started operating on Wednesday the Texas leg of its controversial Keystone XL pipeline.

Alex Pourbaix, president of energy and oil pipelines, announced at a news conference that the company had started delivering U.S. light, sweet oil to customers in Nederland, Texas from a hub in Cushing, Oklahoma on early Wednesday.

This particular $2.3 billion part of the pipeline will initially carry 300,000 barrels of oil a day, later progressing to 520,000 barrels a day at the end of the year, Mr Pourbaix said. It could increase to 700,000 barrels a day.

The longer $5.4 billion segment of the Keystone XL project has yet to be approved due to fierce opposition from American environmentalists. TransCanada needs to secure a U.S. presidential permit no less from President Barack Obama to build the controversial and longer Keystone XL link, which would transport heavy tar sands crude from Canada and oil from North Dakota's Bakken shale.

But Mr Obama needs to decide this year whether to approve or not the remaining 1,897 kilometres "missing link" northern leg that would connect Canada and some environmentally sensitive parts of the United States.

Environmentalists worry over that since Canada's tar sands oil is heavier and dirtier, a spill in the future meant difficult and longer to clean up. Plus its refining process is much dirtier, possibly increasing global greenhouse gas emissions.

"It will be the safest pipeline in the U.S. to date," Russ Girling, TransCanada's president and chief executive officer, said. "The U.S. Gulf Coast, for the most part, desires heavy barrels, not light barrels."

According to the Canadian Association of Petroleum Producers, the country's oil-sands production expanded to 1.99 million barrels a day, a jump of 10.5 per cent.

Canada is the U.S.'s largest supplier of crude.