CALGARY (Dow Jones)
TransCanada Corp. (TRP) executives said they have found and fixed the cause of a series of small oil spills in the company's Keystone pipeline system, which ships Canadian oil to the U.S.
Premature wear of pumping-station valve fittings and gaskets caused by equipment vibration was the culprit behind several of 14 spills during Keystone's first year of operations, Vern Meier, head of TransCanada's U.S. pipeline operations said in a press conference Wednesday. The issue was fixed by replacing the parts with stronger materials and bracing equipment to reduce vibrations.
The spills, including a 500-barrel spill in May at a pump station in North Dakota, have come at a sensitive time for the Canadian pipeline company, which is currently awaiting a U.S. State Department decision on whether to approve an expansion of the Keystone pipeline. The expansion would nearly double the line's capacity and extend its length from Cushing, Okla. to the Gulf Coast.
The U.S. Environmental Protection Agency said in a letter to the State Dept. last week that it is still unsatisfied with the company's system to protect against spills, especially over environmentally sensitive areas like the Ogallala aquifer, a key agricultural water source that stretches across Nebraska and under the proposed expansion's path.
The EPA pointed to the recent spills as a source of concern. Some environmental groups have suggested that Canadian crude, much of which is derived from the oil sands in northeastern Alberta, is more likely to cause spills than conventional crude.
The TransCanada executives said neither concern is warranted.
Small spills "tend to occur in the first one to two years of pipeline operation," Meier said, and after the recent fixes "we would fully expect a significant decrease in these types of incidents."
TransCanada executive Robert Jones, head of the Keystone project, said that even given the number of recent incidents, Keystone's safety record is better than the average U.S. pipeline and that Keystone is the safest pipeline in North America because of its recent construction and use of the most advanced pipeline-safety technology.
Jones also said that oil sands crude was no more likely to cause spills than other crude oils in the U.S. "This is the same oil that we've been moving for decades," he said.
A State Department decision is expected on the Keystone pipeline by the end of year.
Canada currently ships about 1.9 million barrels a day of oil to the U.S., making it the U.S.'s largest source of foreign imports.
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