WASHINGTON, Kansas, Dec 9 (Reuters) – On Friday, emergency crews were preparing to work through the weekend to clean up the largest U.S. crude oil spill in nearly a decade, with workers descending on this farming community from as far away as Mississippi.
A strong smell of oil hung in the air, a Reuters witness said, as tractor trailers hauled generators, lighting and floor mats to a muddy site. Federal investigators were on the scene trying to help determine what caused about 14,000 barrels of oil to leak from western Canada, an official said.
Pipeline operator TC Energy ( TRP.TO ) said on Friday it was evaluating plans to restart the line, which carries 622,000 barrels of oil per day to U.S. refineries and export hubs. He did not provide details of the breach or when a reset might begin.
The outage could affect oil inventories at the storage hub in Cushing, Oklahoma and cut crude supplies to refining hubs in the central U.S. and the Gulf Coast, analysts said.
“We’re starting to get a better idea of the cleanup efforts that will need to take place over the long term,” said Kellen Ashford, a spokesman for EPA Region 7, which includes Kansas.
Environmental specialists worked in near-freezing temperatures and crews set up equipment to allow operations to continue for days.
TC Energy aims to restart a segment of the pipeline that sends oil to Illinois on Saturday and another part that brings oil to Cushing on Dec. 20, Bloomberg News reported, citing sources. Reuters has not verified these details.
This is the third spill of several thousand barrels of crude oil in the pipeline since it opened in 2010. A previous spill from Keystone had caused the pipeline to remain closed for about two weeks.
TC Energy remained on site with about 100 workers leading cleanup and containment efforts, and the EPA was providing oversight and monitoring, Ashford said. TC is responsible for determining the cause of the leak.
The US regulator Pipeline and Hazardous Materials Administration said the company shut down the pipeline seven minutes after receiving a leak detection alarm. The affected segment, 36 inches (91 cm) in diameter, was the Phase 2 extension of Keystone to Cushing built in 2011.
Washington County, a rural area of about 5,500 people, is about 200 miles (320 km) northwest of Kansas City.
[1/6] Emergency crews work to clean up the largest U.S. crude oil spill in nearly a decade, after the leak at a pipeline operated by TC Energy in rural Washington County, Kansas, U.S., December 9, 2022. REUTERS /Drone Base
The spill has not threatened local water supplies or forced local residents to evacuate, Washington County Emergency Management Coordinator Randy Hubbard told Reuters. Workers quickly set up a containment area to prevent oil that had spilled into a creek from flowing downstream.
“There’s no drinking water for human consumption that would come out of it,” Hubbard said.
Ranchers in the area have been warned and have taken their own corrective measures to protect their animals, he added.
The EPA is the main federal agency that oversees domestic oil spills. If the EPA finds TC Energy responsible for the spill, the company will be responsible for the cost of cleanup and remediation of any environmental damage, as well as potential civil and criminal penalties.
According to Zygmunt Plater, a professor of environmental law at Boston College Law School, pipeline operators are often held liable for EPA violations through the Clean Water Act (CWA) and the related Oil Pollution Act, among others
These federal laws restrict the discharge of pollutants such as oil into waterways and hold pipeline operators responsible for the costs associated with spill containment, cleanup, and damage.
RAW BOTTLE NECK
A prolonged pipeline shutdown could also cause Canadian crude to become a bottleneck in Alberta and push prices down at the Hardisty storage hub, although price reaction on Friday was muted.
Western Canada Select (WCS), the benchmark Canadian heavy grade, for December delivery last traded at a discount of $27.70 a barrel to benchmark U.S. crude futures, according to a broker based in Calgary. WCS traded as high as $33.50 against US crude on Thursday, before settling around a discount of $28.45.
PHMSA must approve the restart of the line. Even once the pipeline is back up and running, the affected area will have to flow at reduced rates pending approval from PHMSA.
“The real impact could come if Keystone faces any pressure restrictions from PHMSA, even after the pipeline can resume operations,” said Ryan Saxton, head of oil data at Wood Mackenzie.
Reporting by Erwin Seba in Washington, Kansas; Additional reporting by Arathy Somasekhar, Rod Nickel, Stephanie Kelly and Clark Mindock; Editing by Marguerita Choy and Daniel Wallis
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