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Fargo questions company request for petroleum pipeline certificate

BISMARCK -- The city of Fargo is questioning a Texas company's request for a certificate to operate a 50-year-old petroleum pipeline that runs from the Mandan (N.D.) Tesoro Refinery through Fargo.

BISMARCK -- The city of Fargo is questioning a Texas company's request for a certificate to operate a 50-year-old petroleum pipeline that runs from the Mandan (N.D.) Tesoro Refinery through Fargo.

NuStar Pipeline Operating Partnership recently acquired the line from Kaneb and has asked the North Dakota Public Service Commission for a "certificate of public convenience and necessity."

The pipeline, built by Amoco in the 1950s, has changed hands several times in recent years. Its most visible infrastructure is a tank farm along Interstate 94 west of Jamestown, N.D. It crosses the Sheyenne and Red rivers, both of which are municipal water supplies for Fargo and other cities in eastern North Dakota.

Public Service Commissioner Kevin Cramer said Monday it's doubtful the company needs a PSC certificate because it already is a federally OK'd common carrier. Apparently, he said, none of NuStar's predecessors, including Kaneb, Valero, Tesoro and Amoco, ever sought such a PSC certificate.

Intervention

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Nevertheless, the PSC will act because "the fact of the matter is, they requested one," Cramer said. He hopes that a hearing would be in Fargo.

Fargo asks the PSC to let the city intervene in NuStar's case and also wants the PSC to hold a public hearing.

If NuStar can't show that it would protect Fargo's -- and other cities' -- water supply and soil from possible leaks, the PSC should deny the certificate, the city wrote.

NuStar Pipeline Operating Partnership "has only a short history operating this particular pipeline," Fargo City Attorney Erik Johnson and special counsel John Dingess, Denver, wrote. "NuStar POP may itself be a new entity with little or no significant history operating pipelines containing hazardous liquids ... (and) also appears to lack significant history operating pipelines which are at, near or past their projected useful life."

Johnson and Dingess question NuStar's "financial ability to fund the potential adverse consequences of operating an aged hazardous liquid pipeline."

NuStar, based in San Antonio, has until July 31 to respond to Fargo's petition. Then, the commission would meet within days to decide on intervener status and set a hearing.

The company said in an

e-mail response to questions from Forum Communications that it has operated since 2001, previously as Valero L.P., and is a "very strong publicly traded company."

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"Regarding questions about our experience in operating pipelines, we have over 9,000 miles of crude oil and refined product pipelines and we have operations throughout the United States, the Netherlands, Antilles, Canada, Mexico and the United Kingdom," wrote spokesman Greg Matula.

The company just tested all its pipelines and has numerous safety measures in place, such as regular inspections and monitoring for leaks, Matula wrote.

The North Dakota pipeline has "the best coating in the industry, and it should last a very long time," he wrote.

Previous request

This is the second time in less than a year that Fargo has asked to intervene in the PSC's approval of a petroleum pipeline.

Last fall, the city belatedly requested involvement in the permitting of the

TransCanada Keystone Pipeline, a 30-inch line being built north-to-south through eastern North Dakota to bring Canadian crude oil through the state on its way from Alberta tar sands fields to refineries and hubs in Illinois and Oklahoma. The city asked to intervene a month after the PSC had completed five days of hearings in three cities and closed the case to further input. The commission reopened the case for Fargo on a 2-1 vote.

The city later reached its own settlement with Keystone officials.

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Cole writes for Forum Communications Co., which owns the Herald.

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