TransCanada Oil Spill Raises US Oil Prices, Stirs Its Opponents

Canadian oil prices plummeted while U.S. crude prices rose last Friday, a day after the 5,000-barrel oil spill on the Keystone pipeline in South Dakota. Levelling with US’ largest pipeline leak of this year, the TransCanada oil spill has also further encouraged environmentalist group and critics to oppose the company’s proposed opening another pipeline, the long-delayed Keystone XL.

TransCanada Corp shares went down to 0.9 percent on the Toronto Stock Exchange at C$62.54. On the other hand, the US. West Texas Intermediate crude went up to 2.6 percent or $1.41 at $56.55 a barrel.

While it has already controlled the leak within the town of Amherst, South Dakota, TransCanada stated that no date has been set yet for the reopening of the Keystone pipeline, which transports 590,000 barrels per day of crude from Alberta’s oil sands to US markets.

While TransCanada is investigating the root cause of the major pipeline leakage, the Keystone pipeline will remain shut until the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) approves its reopening.

Kim McIntosh, the environmental scientist manager at the South Dakota Department of Environment and Natural Resources said that it would take the company longer than usual to determine the extent of contamination. The last Keystone pipeline spill that occurred in April 2016 involved about 400 barrels of oil in Hutchinson County, South Dakota. “The 2016 release took around 10 months to clean up; this will take longer. I can’t predict whether it will take 20 months or 12 months,” said McIntosh.

Meanwhile, the opponents of Keystone XL pipeline project in Nebraska takes the current incident as a strong proof of the project’s environmental hazards and risks. “Pipelines are basically plumbing; and plumbing leaks. It comes as no surprise,” said Tom Genung, one of the critics residing near the proposed Keystone XL path.

Art Tanderup, whose family farm lies in the proposed Keystone XL route said that the proposed pipeline would be built over a vast area of porous, sand-like soil above an aquifer. Consequently, this construction will potentially subject the area to a risk of water contamination in the event of an oil spill. “We would have so much crud and chemicals in the Ogallala aquifer that we could never clean up,” he said.

The Nebraska Public Service Commission, or PSC, is set to announce a decision on Monday on whether to approve Keystone XL or not. Its decision focuses narrowly on whether the pipeline is in the public interest, and not on environmental issues, which it is not allowed to consider.

[via Reuters]

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