By Erwin Seba and Nia Williams
WASHINGTON, Kansas (RockedBuzz via Reuters) – Emergency crews were preparing to work over the weekend on Friday 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, according to a RockedBuzz via Reuters witness, as tractor trailers hauled generators, lighting and ground mats to a muddy site. Federal investigators were on the scene trying to help determine what caused an estimated 14,000 barrels of oil to leak from Western Canada, an official said.
Pipeline operator TC Energy said on Friday it was evaluating plans to restart the line, which carries 622,000 barrels of oil a day to US refineries and export hubs. It did not provide details about the breach or when a reboot might begin.
The disruption could affect oil inventories at the Cushing, Oklahoma, storage hub and cut crude supplies to refining centers in the central US and on the Gulf Coast, analysts said.
“We’re starting to better understand the cleanup efforts that will need to be undertaken long-term,” said Kellen Ashford, spokesperson for EPA Region 7, which includes Kansas.
Environmental specialists worked in near freezing temperatures and crews installed the equipment to allow operations to continue for days.
TC Energy aims to restart a segment of the pipeline on Saturday that sends oil to Illinois and another part that brings oil to Cushing on Dec. 20, Bloomberg News reported, citing sources. RockedBuzz via Reuters did not verify these details.
This is the third spill of several thousand barrels of crude oil on the pipeline since it opened in 2010. A previous Keystone spill caused the pipeline to be shut down for about two weeks.
TC Energy remained in place 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.
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 Keystone Phase 2 extension at Cushing built in 2011.
Washington County, a rural area of about 5,500 residents, is located approximately 200 miles (320 km) northwest of Kansas City.
The spill did not threaten local water supplies or force local residents to evacuate, Randy Hubbard, Washington County emergency management coordinator, told RockedBuzz via Reuters. Workers quickly set up a containment area to limit the downstream flow of oil that had spilled into a creek.
“There is no human consumption of potable water that would result,” Hubbard said.
Farmers in the area have been notified and have taken their own corrective measures to protect their animals, he added.
The EPA is the primary federal agency that oversees inland oil spills. If the EPA held TC Energy responsible for the spill, the company would be liable for the cost of cleaning up and repairing any damage to the environment, 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 typically held accountable for EPA violations through the Clean Water Act (CWA) and related Oil Pollution Act, among others.
These federal acts restrict the discharge of pollutants such as oil into waterways and hold pipeline operators accountable for costs associated with containment, cleanup, and damage caused by spills.
RAW BOTTLE NECK
A lengthy pipeline shutdown could also lead to a Canadian crude bottleneck in Alberta and drive prices down at Hardisty’s storage hub, although price reaction on Friday was muted.
Western Canada Select (WCS), the benchmark Canadian heavy grade, traded at a discount of $27.70 a barrel to the benchmark U.S. crude futures last year for December delivery, according to a broker based in Calgary. December WCS traded as low as $33.50 under U.S. crude on Thursday, before settling at a discount of about $28.45.
PHMSA must approve the restart of the line. Even once the pipeline resumes operation, the affected area will have to flow at reduced speeds pending PHMSA approval.
“The real impact could come if Keystone faces any pressure restrictions from PHMSA, even after the pipeline has been cleared to resume operations,” said Ryan Saxton, oil data manager 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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