Investigators, cleanup crews begin scouring oil pipeline spill in Kansas

WASHINGTON, Kansas, Dec 9 (Reuters) – Emergency crews on Friday prepared to work through the weekend to clean up the largest U.S. oil spill in nearly a decade, with workers descending on this farming community from as far away as Mississippi.

A heavy smell of oil hung in the air, according to a Reuters witness, as tractor trailers carried generators, lights and ground mats in a muddy area. Federal investigators were on the scene trying to help determine what caused the leak of about 14,000 barrels of oil from Western Canada, an official said.

Pipeline operator TC Energy ( TRP.TO ) on Friday said it was reviewing plans to restart the line, which carries 622,000 barrels of oil per day to U.S. refineries and export hubs. It did not provide details of the violation or when it would begin.

The outage could affect oil inventories at the Cushing, Oklahoma, storage hub and cut crude supplies to central US and Gulf Coast refining centers, analysts said.

“We’re starting to better understand the cleanup efforts that need to be done in the longer term,” said Kellen Ashford, spokesman for EPA Region 7, which includes Kansas.

Environmental specialists worked in near-freezing temperatures and crews installed equipment to allow operations to continue for several days.

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TC Energy aims to restart on Saturday a part of the pipeline that sends oil to Illinois, and another part that brings oil to Cushing on December 20, Bloomberg News reported, citing sources. Reuters did not confirm the details.

This is the third spill of several thousand barrels of crude oil in the pipeline since it opened in 2010. The previous Keystone spill caused the pipeline to remain closed for about two weeks.

TC Energy remains on site with about 100 workers leading cleanup and refilling efforts, and the EPA is providing oversight and monitoring, Ashford said. The 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 section, 36 inches (91 cm) in diameter, is Keystone’s Phase 2 extension to Cushing that was built in 2011.

Washington County, a rural town with about 5,500 people, is about 200 miles (320 km) northwest of Kansas City.

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The 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 stop the oil spilling into the creek.

“There’s no human potable water coming out of it,” Hubbard said.

Livestock producers in the area have been notified and are taking their own corrective measures to protect their animals, he added.

The EPA is the primary federal agency that oversees oil spills on the ground. If the EPA finds TC Energy responsible for the spill, the company will be responsible for the cost of cleaning up and remediating any environmental damage, as well as potential civil and criminal penalties.

Pipeline operators are often held liable for violations of the EPA through the Clean Water Act (CWA) and the related Oil Pollution Act, among others, according to Zygmunt Plater, a professor of environmental law at Boston College Law. School.

Federal actions prevent the discharge of pollutants such as oil into waterways and hold pipeline operators responsible for costs associated with containment, cleanup and damages from spills.

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A lengthy pipeline shutdown could also lead to Canadian crude being bottlenecked in Alberta, and could lower prices at the Hardisty storage hub, although Friday’s price reaction was muted.

Western Canada Select (WCS), Canada’s benchmark heavy grade, for December delivery last traded at a discount of $27.70 a barrel to the US crude benchmark, according to a Calgary-based broker. On Thursday, December WCS traded as low as $33.50 under US crude, before settling at a near $28.45 discount.

PHMSA must approve restarting the line. Even if the pipeline starts operating again, the affected area will have to flow at reduced rates pending PHMSA approval.

“The real impact could come if Keystone faces any restrictions pressure from PHMSA, even if the pipeline is allowed to 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

Our Standards: The Thomson Reuters Trust Principles.


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