Reuters reports:

The top U.S. environmental regulator on Thursday said her agency would soon comment on the proposed $7 billion Canada-to-Texas Keystone XL oil sands pipeline, adding she was concerned about emissions and potential leaks that could result from the project.

“We have comments we are just about completing on the current environmental impact statement,” U.S. Environmental Protection Agency Administrator Lisa Jackson said at a Howard University event with youth environment leaders.

Jackson listed concerns about the pipeline including additional greenhouse gas emissions from producing the oil sands; the possibility of leaks on the line; and harmful emissions from refineries in communities along the Gulf Coast that could result from the project.

“This isn’t a little tiny pipeline, this is a pipeline that cuts our country literally in half,” she added. The $7 billion project would take 700,000 barrels per day or more from Canada through six states to refineries in Texas.

The EPA was highly critical of the first two drafts of the EIS that the State Department released, forcing the agency to go back and revise their analyses. Environmental groups have revealed close ties between TransCanada and officials in the State Department and accuse the agency of acting as a cheerleader for the project rather than an independent and objective decision maker.

Friends of the Earth filed a federal lawsuit after the State Department denied their Freedom of Information Act request for emails that went back and forth between that agency and Paul Elliott, a former deputy campaign manager for Sec. of State Hillary Clinton and now chief lobbyist for TransCanada.

FOE says those emails show that “officials at the State Department provided information about the agency’s internal thinking and coached TransCanada on what to say during the legally mandated environmental review process.”

The most troubling documents indicate that State Department officials sought to help TransCanada by providing information about State’s internal thinking and by coaching TransCanada on what to say as it responded to a Draft Environmental Impact Statement for the oil company’s controversial tar sands pipeline…

In an email exchange from May 19, 2010, Elliott told Nora Toiv (a former campaign colleague who had become special assistant to Secretary Clinton’s chief of staff) that then-State Department Special Envoy and Coordinator for International Energy Affairs David Goldwyn gave TransCanada’s then-president and CEO Hal Kvisle “insight on what he’d like to see by way of on the record comment during this public comment period of this Keystone KXL draft environmental impact statement.” Elliott wrote: “We are working with our stakeholders, shippers and vendors to deliver on the insight David shared with us and to do so by the June 15 deadline.”

The State Department is set to decide on whether to approve the project in the next couple months.

The move comes as Upton has been touting his conservative credentials in an effort to win the chairmanship of the House Energy and Commerce Committee. Republicans have criticized Upton for being too moderate on environmental issues, with one of his opponents, Rep. Joe Barton (R-Texas), leading the “not-conservative-enough” charge.

Environmentalists and a number of lawmakers have mounted a massive campaign to oppose the pipeline project, known as Keystone XL. And they have set their sights on recent remarks by Clinton that suggest the State Department will approve the project. But it’s not just Democrats who oppose the project; at least one Republican, Sen. Mike Johanns (Neb.), opposes it because it would go through his state.

In a letter to Clinton, Upton said:

Government is currently standing in the way of this $7 billion privately funded project, which is expected to stimulate $20 billion in new spending for the U.S. economy and spur the creation of 118,000 jobs. Our number one priority must be job creation, and this is a prime example of the over-burdensome regulatory system that is killing the private sector.  Government must stand back and allow the U.S. economy to rebound. If not we will continue to see our jobs go overseas.

The petition — signed by a slew of environmental groups in the U.S. and Canada like the Natural Resources Defense Council and Greenpeace — appears to target a massive proposed pipeline project that would run from Alberta, Canada to Texas. Environmental groups have mounted a campaign to stop the project, known as Keystone XL.

The petition reads:

We are calling, with one voice, for the Alberta and the Federal government to address the growing and at times deadly impacts tar sands tailing lakes have by immediately denying all proposals that would require the creation of new tailings lakes and by legislating the complete phase out of existing tailings lakes because of the on-going and potential danger they pose to bird, animal, plant, aquatic and human populations.

More than 350 birds that landed on a Canadian tar sands pond were found dead last week. In a blog post on the issue, NRDC’s Susan Casey-Lefkowitz wrote:

The tar sands tailings ponds are one of the most dangerous and absurd facets of this industry. Dangerous because tailings ponds are some of the largest dams in the world, constructed for the toxic waste that remains after strip-mining the tarry bitumen from the sand that lies deep under Alberta’s Boreal forests and wetlands. Absurd because the tar sands oil industry is wasting precious natural resources and migratory bird habitat for waste storage.

The State Department is currently in the midst of a review of the Keystone XL proposal. Secretary of State Hillary Clinton, speaking in San Fransisco last week, suggested that the State Department would eventually approve the project, though her comments were a bit unclear.

Environmental leaders and lawmakers from the states through which the pipeline would run have pounced on the comments. Eleven Senate Democrats sent a letter to Clinton last week calling on her not to “prejudge” the outcome of the State Department review. And just yesterday, the heads of seven major environmental groups called on Clinton to “recuse” herself from the pipeline review, citing her comments on the project.

Clinton, speaking in San Fransisco last week, suggested that the State Department, which is currently reviewing the Keystone XL pipeline project, would eventually approve it, though her comments were a bit unclear.

In the letter, the 11 Senate Democrats said, “Approval of this pipeline will significantly increase our dependence on this oil for decades.” Environmentalists have been railing against the project because it would import oil from tar sands, the production of which emits huge amounts of greenhouse gases into the atmosphere.

The letter continues:

We believe the Department of State (DOS) should not pre-judge the outcome of what should be a thorough, transparent analysis of the needs for this oil and its impacts on our climate and clean energy goals.

Clinton, speaking in San Fransisco earlier this week, suggested that the State Department, which is currently reviewing the massive pipeline project, would eventually approve it. But her comments were a bit unclear. The questioner asked about the Alberta Clipper pipeline, which has already been approved. But Clinton appeared to talk about the Keystone XL pipeline, which is still pending.

“So as I say, we’ve not yet signed off on it,” she said. “But we are inclined to do so.”

Here are Clinton’s full remarks on the issue:

Question: Another international issue that you signed in on last year was the Alberta Clipper, a pipeline from Alberta that brings tar sands, oil sands directly into Wisconsin to the U.S. Midwest. This is some of the dirtiest fuel in the world. And how can the U.S. be saying climate change is a priority when we’re mainlining some of the dirtiest fuel that exists. (Applause.)

Secretary Clinton: Well, there hasn’t been a final decision made. It is -

Question: Are you willing to reconsider it?

Secretary Clinton: Probably not. (Laughter.) And we – but we haven’t finish all of the analysis. So as I say, we’ve not yet signed off on it. But we are inclined to do so and we are for several reasons – going back to one of your original questions – we’re either going to be dependent on dirty oil from the Gulf or dirty oil from Canada. And until we can get our act together as a country and figure out that clean, renewable energy is in both our economic interests and the interests of our planet – (applause) – I mean, I don’t think it will come as a surprise to anyone how deeply disappointed the President and I are about our inability to get the kind of legislation through the Senate that the United States was seeking.

Clinton’s remarks have caused at least two lawmakers to speak out. Sen. Mike Johanns (R-Neb.), who has already said he doesn’t support the pipeline project that would cut through his state, wrote a letter to Clinton yesterday asking for clarification on her comments. “Your comments inspire further doubts as to the validity of the review process taken on by the department,” he said.

Johnanns, in an interview with The Hill yesterday, suggested that the State Department could have a lawsuit on its hands if it predetermines the outcome of the Keystone XL review. “One would imagine that this decision will be challenged,” he told The Hill. “And if the net result is the ultimate decisionmaker … had already prejudged this then you have a problem where this would be determined to be arbitrary and capricious.”

Sen. Ben Nelson (D-Neb.) followed suit yesterday with his own letter raising similar questions.

The proposal, an advance notice of proposed rulemaking, lays out a number of potential issues the Pipeline and Hazardous Materials Safety Administration, or PHMSA, may address in final regulations. Under the proposal, the public has until Jan. 17, 2011 to provide its input.

The proposal lays out a number of issues I’ve identified in my ongoing series on pipeline safety and the lack of oversight at PHMSA. For example, the proposal raises the possibility of requiring pipeline in rural areas to be subject to more inspections. It also floats the idea of requiring better emergency shutoff valves (as I’ve noted, the segment of pipeline that exploded in San Bruno last month had to be shut off manually) and strengthening standards to prevent pipe corrosion.

The PHMSA proposal comes as Congress is considering a number of pipeline safety proposals, from both the Obama administration and various lawmakers.

A natural gas pipeline exploded in San Bruno, Calif., Sept. 9. (Flickr, Thomas Hawk)

Once PG&E discovered that a natural gas pipeline had exploded in San Bruno, Calif., earlier this month, employees from the utility company had to drive in rush-hour traffic to manually turn off two separate safety valves in order to stop the flow of gas that was fueling the blaze. It took the employees more than an hour to reach the valves and shut them off.

[Environment1] Lawmakers and pipeline safety advocates said today at a hearing of a Senate Commerce, Science and Transportation subcommittee that this is unacceptable. Utilities that operate pipelines in so-called high consequence areas — or areas near dense populations — should be required to install remote or automatic shutoff valves that will immediately stop the flow of gas in the event of an emergency.

This is not a new idea. Rick Kessler — vice president of the Pipeline Safety Trust, a non-profit group that advocates for pipeline safety — said his group has been calling for federal regulations that require the use of remote shutoff valves for about a decade. And Sen. Frank Lautenber (D-N.J.), chairman of the subsurface transportation subcommittee that held the hearing, has been calling for the valves since a massive 1994 natural gas pipeline explosion in Edison, N.J., killed one person and left 100 people without homes.

The San Bruno explosion killed eight people, injured many more and destroyed dozens of homes. The disaster has refocused attention on the issue of pipeline safety, an issue that was thrust into the spotlight earlier this year when a pipeline break in Michigan spilled 1 million gallons of oil into a tributary of the Kalamazoo River. As The Washington Independent reported in  its series on pipeline safety, regulation, both at the state and federal levels, is severely lacking.

Now, Congress is moving forward to take action. The Obama administration offered its own proposal to reform pipeline oversight (the administration is also developing new leak detection rules), a proposal that Kessler said was woefully inadequate. The administration “put out a proposal that doesn’t address any of the issues raised by San Bruno,” he said, adding that it’s “too little, too late.”

Kessler recommended that any pipeline safety proposal require the installation of remote shutoff valves in high consequence areas, require companies to upgrade pipelines that cannot accommodate the best inspection equipment and mandate a complete review of the federal government’s requirements that the public be made aware of the existence and location of pipelines.

There are two other pipeline safety proposlals on the table in Congress. The first comes from California’s senators — Sens. Dianne Feinstein (D) and Barbara Boxer (D). The proposal is largely based on the Obama administration’s plan, but it would also require the use of remote shutoff valves, mandate advanced inspection technology, and require that the Obama administration write leak detection regulations. Lautenberg, along with full committee Chairman Jay Rockefeller (D-W.Va.),  introduced their own pipeline safety bill today that requires remote shutoff valves.

Meanwhile, in the House, the Transporation and Infrastructure Committee is in the process of reviewing the administration’s pipeline proposal and developing its own plan. As I’ve reported, it’s unlikely that any of these proposals will pass any time soon, since Congress is focusing on the mid-term elections.

Boxer, noting the potential for the legislation to take some time to move through Congress, pressed California Public Utilities Commission Executive Director Paul Clanon to require PG&E, the owner of the San Bruno pipeline, to begin installing more remote shutoff valves. Clanon said he had asked PG&E to identify the areas that it makes the most sense to install the valves.

PG&E President Christopher Johns, pressed by Boxer on the issue, said, “I will work with the PUC to put them in wherever it makes sense to put in.” Boxer said the valves should be put in all high-consequence areas. There are 3,600 miles of natural gas pipeline in high-consequence areas in California alone.

Installing the new valves across the whole country would be a massive undertaking that would require significant additional resources. As it stands now, the Pipeline and Hazardous Materials Safety Administration, the federal agency in charge of overseeing pipeline safety, is already significantly under-resourced.

PHMSA Administrator Cynthia Quarterman, pressed by Boxer on what the agency is doing to improve pipeline safety in light of the San Bruno disaster, said she is looking into the possibility of requiring more remote shutoff valves, but added that she was waiting to make significant decisions until the National Transportation Safety Board finished its investigation into the explosion.

Boxer said Quarterman should not wait. “It’s on our collective shoulders now. We have been warned,” she said. “I think you need to be proactive on this one and not wait for new information to come out.”

The settlement comes just weeks after a massive pipeline break in Michigan dumped about 1 million gallons of oil into a tributary of the Kalamazoo River. In light of this oil spill, I’ve been looking into the agency that is responsible for pipeline safety. I’ve found that the agency lacks an adequate mandate and the staff to require comprehensive inspections of the country’s massive pipeline system. Read my first story on the issue here and the second, which ran today, here.

Plains All American Pipeline and its subsidies violated the Clean Water Act in ten oil pipeline spills from 2004-2007. In addition to the $41 million the company agreed to pay to upgrade their pipelines, the company is also required to pay $3.25 million in civil penalties under the act.

“These spills – and the recent pipeline spill in the Kalamazoo River – remind us that we must be diligent in our enforcement efforts and work to ensure that companies are meeting their environmental obligations,” Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance, said in a statement today.

Under the agreement Plains All American Pipeline agreed to “take steps to replace or install corrosion control equipment, perform pipeline inspections, assess the integrity of newly acquired pipelines, improve leak detection practices and capabilities, and provide proper training for personnel,” according to the statement.

EPA has more information on the settlement on its web site.

A spokeswoman for TransCanada confirms that the company is “withdrawing” the special permit request, though she would offer no further details, adding that a formal announcement would be made later this afternoon. Environmentalists say TransCanada is expected to withdraw its request to operate its pipeline at higher than recommended pressures, but will let stand their request to build the pipeline with steel that is thinner than federal regulations require.

While the details and reasons for the withdrawal remain unclear, environmentalists were quick to applaud the development. They note that the process for extracting so-called oil sands from the earth emits high levels of greenhouse gases and, pointing to a recent pipeline burst in Michigan, the environmentalists argue that pipelines are unsafe.

At the same time, environmentalists remain skeptical about TransCanada. Jim Lyon, vice president of the National Wildlife Federation, said in statement:

As pleased as we are to see TransCanada abandoning its plan pump oil at dangerous pressures, this move doesn’t erase the industry’s lousy accident and safety record. This pipeline will still be built with thinner steel that threatens communities, water  and wildlife habitat across the American landscape.  If anything, this raises more questions about why TransCanada proposed such an irresponsible approach at the outset. We should not be duped by TransCanada. They will do everything to maximize profit at the expense of safety.