MONEY

5 things to know about the Diamond Pipeline protest

The subject of the protest is the Diamond Pipeline, something that hasn't been discussed much in Memphis although it could factor in someday for most Memphis motorists and FedEx pilots.

Ted Evanoff
USA TODAY NETWORK – Tennessee

Anti-pipeline protests drew a heavy response from Memphis police and firefighters on Monday.

Demonstrators rolled out 55-gallon drums outside the Valero Energy Corp. refinery off Interstate 55 just south of Downtown. Nearly 50 police and fire vehicles responded, a large showing out of concern the barrels could explode.

The subject of the protest is the Diamond Pipeline being built across Arkansas. It would provide fuel for most Memphis motorists and many FedEx Corp. pilots. The pipeline had been little discussed in Memphis until Monday. Here’s a look at what the demonstration is about:

What is the Diamond Pipeline?

Most cars in Memphis and many FedEx jetliners burn fuel supplied by Valero Energy Corp.’s refinery near Presidents Island.

Tanker trucks refill at the Valero Refinery facility at Rivergate Industrial Port in south Memphis .

For decades, the mid-size refinery processed Gulf Coast crude oil known as Louisiana light sweet. In 2013, the refinery began running less expensive Bakken crude. It is shale oil taken from below North Dakota, railed to St. James, Louisiana, and pumped to Memphis in Marathon Petroleum Corp.'s Capline pipeline.

In August 2014, Plains All American Pipeline LP of Houston confirmed plans to construct the Diamond Pipeline. It would move shale oil 440 miles to Valero Memphis from Cushing, Oklahoma. Cushing contains one of the world’s largest intersections of oil pipelines.

Why protest in Memphis?

Environmental groups in Arkansas have opposed the Diamond Pipeline’s construction for more than a year.

"Arkansas can't afford another pipeline spill," Jessica Brown, a chapter leader with the Natural State Water Guardians, told the Northwest Arkansas Democrat Gazette during a rally near Fayetteville on Dec. 10. "I'm doing this for my daughter. We're doing this for future generations."

Brown cited the July 2013 break at Mayflower, Arkansas. An Exxon Mobil pipeline failed, spilling 147,000 gallons of crude oil and displacing residents from 22 homes. Protesters also question Plains All America’s safety record and note a 2015 spill into the Pacific Ocean.

What about permits from government agencies?

The Arkansas Public Service Commission approved plans in August for five waterway crossings:the Arkansas River in Franklin County, the Illinois Bayou in Pope County, the White River in Prairie County, the St. Francis River in St. Francis County and the Mississippi River at Memphis.

The Corps of Engineers' Little Rock district examined 491 water crossings on the pipeline's route and approved permits for 443 of them in May. The other crossings either didn't need a permit, or the agency didn't have jurisdiction over them, the Democrat Gazette reported.

At Memphis, the Corps approved the route taking the 20-inch-diameter pipe under the river at West Memphis and emerging on the northwest edge of Presidents Island. The Commercial Appeal earlier reported the route on Presidents Island appears to be without a layer of clay protecting the massive aquifer the city relies on for drinking water.

Earl Hatley, an environmental activist from Oklahoma, told the Democrat Gazette some pipelines are permitted without public comment or environmental impact studies. "There's no democracy. That's what we're fighting," Hatley said. "It's corporate power with the use of government against the people."

Why does Valero want a pipeline?

The pipeline is the cheapest way to bring oil to the Memphis refinery, which can process 7.5 million gallons of oil per day. It would cut out the step of sending the oil down to Louisiana and bringing it back to Memphis.

Why does Valero want crude oil from North Dakota?

Shale oil is less expensive than oil pumped from the Gulf Coast or imported from the Middle East or the North Sea. Shale oil refers to oil squeezed from sand, rock and old oil fields. Americans developed the process within the last five years. It has produced so much oil that U.S. oil prices have plunged and American oil imports have declined, sending the global oil industry into a recession as prices fell worldwide.

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