Dec.9 (Reuters) – Efforts to remove oil from the largest oil spill in the United States in nearly a decade will extend into next week, the US Environmental Protection Agency said on Friday, making it likely that the closure of the Keystone pipeline for at least a few more days.
TC Energy (TRP.TO) shut down the largest oil pipeline to the United States from Canada on Wednesday after it spilled 14,000 barrels of oil into a Kansas creek. It said on Friday it is still determining when it can put the line back into service.
The outage on the Keystone, which carries 622,000 barrels of Canadian crude oil per day (bpd) to various parts of the United States, could affect supplies at the main storage hub in Cushing, Oklahoma and the supply of crude oil to two oil refining centers decrease, analysts said. . Crews in Kansas continued Friday to clean up the breach, the cause of which remained unknown.
“We’re starting to get a better sense of the longer-term cleanup efforts that need to be made,” said Kellen Ashford, spokesperson for the EPA’s Region 7, which includes Kansas.
TC Energy wants to restart a pipeline segment on Saturday that will send oil to Illinois, and another segment that will bring oil to Cushing on Dec. 20, Bloomberg News reported, citing sources. Reuters has not verified those details.
This is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010. A previous Keystone spill had caused the pipeline to remain closed for about two weeks.
TC Energy remained on site with about 100 employees leading the cleanup and containment efforts, and the EPA provided oversight and monitoring, Ashford said. TC is responsible for determining the cause of the leak.
A corrective action order from the U.S. Pipeline and Hazardous Materials Administration (PHMSA) to TC on Thursday said the company shut down the pipeline seven minutes after receiving a leak detection alert. The affected segment, measuring 36 inches (91 cm) in diameter, was Keystone’s Phase 2 extension to Cushing, built in 2011.
Washington County, a rural area with a population of about 5,500, is about 200 miles northwest of Kansas City.
The oil spill did not threaten local water supplies or force local residents to evacuate, Washington County emergency management coordinator Randy Hubbard told Reuters. Workers quickly set up a containment area to prevent oil from flowing into a creek downstream.
“No drinking water for human consumption would come out of this,” Hubbard said.
Livestock farmers in the area have been notified and have taken their own corrective actions to protect their animals, he added.
The EPA is the primary federal agency that oversees domestic oil spills. If the EPA holds TC Energy liable for the spill, the company would be responsible for the costs of cleaning up and restoring any environmental damage, as well as potential civil and criminal penalties.
According to Zygmunt Plater, an environmental law professor at Boston College Law School, pipeline operators are typically held responsible for violations by the EPA through the Clean Water Act (CWA) and the related Oil Pollution Act, among other things.
Those federal laws limit the discharge of pollutants such as oil into waterways and hold pipeline operators responsible for the costs associated with containment, cleanup, and damage from spills.
A prolonged pipeline shutdown could also cause Canadian crude to bottleneck in Alberta, and drive down prices at the Hardisty storage hub, though price reaction was subdued on Friday.
Western Canada Select (WCS), the benchmark Canadian heavy grade, for delivery in December, last traded at a discount of $27.70 a barrel to the US crude futures benchmark, according to a Calgary-based broker. On Thursday, December, WCS traded as low as $33.50 below US crude before settling for a discount of around $28.45.
PHMSA must approve the restart of the line. Even if the pipeline is returned to service, the affected area will have to flow at reduced speeds pending PHMSA approval.
“The real impact could come if Keystone faces pressure restrictions from PHMSA even after the pipeline is back up and running,” said Ryan Saxton, head of oil data at Wood Mackenzie.
Additional reporting by Arathy Somasekhar, Rod Nickel, Stephanie Kelly and Clark Mindock; Edited by Marguerita Choy
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