WASHINGTON, Kansas, – On Friday, emergency crews were making preparations to work over the weekend to clean up the worst crude oil spill in the United States in nearly a decade. Workers were arriving in this farming hamlet from as far away as Mississippi to assist in the cleanup efforts.
During the time that tractor trailers were transporting generators, lighting, and ground mats to a muddy site, a witness who spoke with Reuters said that the air was thick with the scent of the oil. An official stated that federal investigators were currently present at the location to assist in determining what caused a spill of around 14,000 barrels of oil from Western Canada.
On Friday, the operator of a pipeline known as TC Energy (TRP.TO) announced that it was studying measures to restart the line, which is responsible for transporting 622,000 barrels of oil per day to refineries and export hubs in the United States. It did not disclose any specifics regarding the breach, nor did it indicate when a restart could occur.
Analysts believe that the disruption could impact oil stockpiles at the storage hub located in Cushing, Oklahoma, and reduce crude supply to processing hubs located in the central United States and along the Gulf Coast.
Kellen Ashford, a spokesperson for the Environmental Protection Agency’s (EPA) Region 7, which includes the state of Kansas, stated that “We’re beginning to have a clearer understanding of the clean-up activities that will need to be conducted in the longer term.” Environmental professionals worked diligently despite temperatures that were close to freezing, and employees set up equipment to ensure that operations could continue for days.
According to sources cited by Bloomberg News, TC Energy plans to resume a piece of a pipeline that transports oil to Illinois on Saturday. On December 20, they want to restart another portion of the pipeline that transports oil to Cushing. Those particulars have not been checked by Reuters.
Since it first began operating in 2010, this pipeline has seen three separate spills of crude oil totaling several thousand barrels each time. A spill that occurred in the Keystone pipeline in the past led it to be shut down for around two weeks.
According to Ashford, TC Energy remained on site with approximately one hundred people leading the operations to clean up and contain the spill, while the EPA was providing oversight and monitoring. TC is accountable for determining what caused the breach in the first place.
The company reportedly shut down the pipeline seven minutes after receiving a leak detection warning, according to the U.S. authority known as the Pipeline and Hazardous Materials Administration. The impacted section, which had a diameter of 36 inches (91 cm), was Keystone’s Phase 2 extension to Cushing, which was constructed in 2011.
About 5,500 people call the rural area of Washington County, which is located about 200 miles (320 kilometers) to the northwest of Kansas City.
Randy Hubbard, the coordinator of emergency management for Washington County, told Reuters that the spill did not pose a threat to the community’s water supply and did not need residents to leave their homes. A spill of oil occurred in a creek, and workers moved immediately to set up a containment area to prevent the oil from traveling further downstream.
According to what Hubbard indicated, there is not going to be any water suitable for human consumption that comes out of this. He went on to say that those in the region who raise livestock had been informed of the situation and had taken corrective action on their own to protect their animals.
The Environmental Protection Agency (EPA) is the primary federal agency responsible for monitoring oil spills on land. If the Environmental Protection Agency (EPA) concludes that TC Energy is responsible for the leak, the corporation will be held liable for the expense of cleaning up the spill and correcting any damage caused to the environment, in addition to any potential civil or criminal penalties.
According to Zygmunt Plater, an environmental law professor at Boston College Law School, pipeline operators are typically held accountable for breaches by the Environmental Protection Agency (EPA) through the Clean Water Act (CWA) and the related Oil Pollution Act, among other laws. This is the case in most cases.
This federal legislation imposes restrictions on the discharge of contaminants into waterways, such as oil, and holds pipeline owners liable for the expenses involved with spill containment, cleanup, and damage.
CRUDE BOTTLENECK
A prolonged outage of the pipeline could potentially result in a bottlenecking of Canadian oil in Alberta, which would drive prices at the Hardisty storage hub lower; however, the market did not react strongly to this possibility on Friday.
According to a broker located in Calgary, Western Canada Select (WCS), which is the benchmark Canadian heavy grade, last traded at a discount of $27.70 per barrel when compared to the benchmark for U.S. crude futures. This was the case for the December delivery contract. Before settling at about a $28.45 deficit on Thursday, December WCS moved as low as $33.50 below U.S. crude before recovering slightly.
Before the line may be restarted, PHMSA must provide its approval. Even after the pipeline has been repaired and is back in operation, the impacted region will be required to flow at lower rates while waiting for PHMSA certification.
Even once the pipeline is permitted to begin operations, the true impact may not be seen for some time, according to Ryan Saxton, head of oil statistics at Wood Mackenzie. “The real impact could come if Keystone suffers any pressure limits from PHMSA,” he added.
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