Keystone leak: Canada-US pipeline's closure sends oil prices surging, raises environmental concerns

The continued closure of the Keystone Pipeline between Canada and the US due to an oil spill in Kansas has sent crude prices surging apart from raising environmental concerns.

Canada’s TE Energy Corp which owns the pipeline says that it has cleaned up almost 2,600 barrels of oil that spilled into a creek in Washington county in the US state of Kansas, Reuters reported. It added that the affected pipeline segment had been “isolated” and the oil contained at the site with booms, or barriers.

The major pipeline was shut last week after 14,000 barrels of oil leaked into the creek. The exact cause of the rupture is not known yet.

TE Energy is yet to give a timeline for the resumption of the services.

Third major oil spill in five years

Notably, this is the third leak from the pipeline in five years.

TC Energy said it shut down its Keystone system Wednesday night following a drop in pipeline pressure.

“People are sometimes not aware of the havoc that these things can wreak until the disaster happens,” said Zack Pistora, who lobbies the Kansas Legislature for the Sierra Club’s state chapter.

Concerns that spills could pollute waterways spurred opposition to plans by TC Energy to build another crude oil pipeline in the Keystone system, the 1,200-mile (1,900-kilometer) Keystone XL, which would have cut across Montana, South Dakota and Nebraska. Critics also argued that using crude from western Canada’s oil sands would worsen climate change, and President Joe Biden’s cancelation of a U.S. permit for the project led the company to pull the plug last year.

In 2019, the Keystone pipeline leaked an estimated 383,000 gallons (1.4 million liters) of oil in eastern North Dakota.

Jane Kleeb, who founded the Bold Nebraska environmental and landowner rights group that campaigned against the Keystone XL, told AP that there have been at least 22 spills along the original Keystone pipeline since it began service in 2010. She added federal studies have shown the type of heavy tar sands oil the pipeline carries can be especially difficult to clean up in the water because it tends to sink.

“All oil spills are difficult, but tar sands, in particular, are very toxic and very difficult, so I’m awfully concerned,” said Kleeb, who is also the Nebraska Democratic Party’s chair.

But the US. Environmental Protection Agency said there were no known effects yet on drinking water wells or the public, and the oil didn’t move from the creek to larger waterways. Randy Hubbard, the Washington County Emergency Management coordinator, said there were no evacuations ordered because the break occurred in rural pastureland.

According to an AP report, TC Energy said it had set up environmental monitoring at the site, including around-the-clock air quality monitoring.

“Our primary focus right now is the health and safety of onsite staff and personnel, the surrounding community, and mitigating risk to the environment,” a company statement said.

5% spike in cost of a barrel of oil

Oil prices briefly surged at midday Thursday amid news of the spill, with the cost of a barrel of oil for near-term contracts rising by nearly 5%, and above the cost of oil contracts further into the future. That typically suggests anxiety in the market over immediate supply.

A US Energy Information Administration spokesperson told AP the Keystone pipeline moves about 600,000 barrels of oil per day from Canada to Cushing, Oklahoma, where it can connect to another pipeline to the Gulf Coast. That’s compared to the total of 3.5 million to 4 million barrels of Canadian oil imported into the US every day.

Past Keystone spills have led to outages that lasted about two weeks, but this outage could possibly be longer because it involves a body of water, said analysts at RBC Capital Markets in a note to investors. Depending on the spill’s location, it’s possible that a portion of the pipeline could restart sooner, they said.

With inputs from agencies

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.