TransCanada Corporation is trying to cut a deal with the United States involving exporting additional oil into that country as far south as Texas. Currently its Keystone pipeline, which carries oil to refineries in North Dakota and Kansas, is shut down. The pipeline developed two leaks in the space of a month, one May 9th at a North Dakota pumping station, the second this past week at a pumping station in Kansas. All shipments have been suspended until TransCanada gets the latter spill cleaned up. Both spills appear to be the result of failed fittings.
All this comes at a time when the oil industry is under the proverbial microscope. Though compared to some recent oil disasters the two spills, the North Dakota one at 500 barrels and the Kansas one that leaked between ten and 40 barrels, are relatively minor. But the potential for large spills is there. The Keystone pipeline normally transports between 400,000 and 450,000 barrels of crude from Alberta to a storage facility in Oklahoma and a refinery in Illinois. At maximum capacity the pipeline can handle 591,000 barrels a day.
There is already opposition to the proposed Keystone XL line which will double the amount of oil transported per day and carry that oil even farther south to Texas refineries. The spills don’t help the negotiations. Environmentalists and landowners in several states are already strongly opposed.
The U.S. State Department will have the final say about the new pipeline. While that agency will be looking at the potential spill problem, they will also be considering the appeal of having Canada supply enough oil that the Middle East will become less of a factor. The pipeline would cut oil imports from that region by about 40 percent. Also in Canada’s favor is that when there is a problem, the oil companies have been quick to respond.