Arkansas Oil Spill Raises Scrutiny of Pipeline Network

Photographer: Courtney Spradlin/Log Cabin Democrat via AP Photo

A duck recovered near the Bell Slough State Wildlife Management Area in Mayflower, Ark., is rescued Monday, April 1, 2013. Close

A duck recovered near the Bell Slough State Wildlife Management Area in Mayflower,... Read More

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Photographer: Courtney Spradlin/Log Cabin Democrat via AP Photo

A duck recovered near the Bell Slough State Wildlife Management Area in Mayflower, Ark., is rescued Monday, April 1, 2013.

An oil spill that fouled an Arkansas town is raising questions about the U.S. pipeline network and the safety of importing Canadian heavy crude, as President Barack Obama weighs whether to approve the Keystone XL project.

Environmental groups said the rupture of the Exxon Mobil Corp. (XOM) pipe on March 29 in Mayflower, Arkansas, shows why Obama should reject Keystone, which would be a major new conduit between the U.S. and Canada for a type of fuel critics say is more corrosive than more conventional forms of oil.

“Without question, this underscores the risks of transporting this stuff,” Jim Murphy, senior counsel at the National Wildlife Federation, said yesterday in a phone interview.

The U.S. State Department is reviewing TransCanada Corp.’s (TRP) Keystone project to link Alberta’s oil sands with refineries along the Gulf Coast because it crosses an international border. White House press secretary Jay Carney said yesterday the White House takes the safety of the pipeline system “very seriously.” He said the Environmental Protection Agency is working with local officials and Exxon on the Arkansas spill.

Republicans and some Democrats in Congress argue Keystone will create thousands of jobs and improve U.S. energy security. The Senate on March 22 approved 62-37 a non-binding resolution encouraging the project’s development. If built, the pipeline each day could carry more than 800,000 barrels of diluted bitumen, or dilbit.

Photographer: Alan English/The Log Cabin Democrat via AP Photo

Crews set out containment booms as they cleanup and check wildlife in Mayflower, Arkansas. Close

Crews set out containment booms as they cleanup and check wildlife in Mayflower, Arkansas.

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Photographer: Alan English/The Log Cabin Democrat via AP Photo

Crews set out containment booms as they cleanup and check wildlife in Mayflower, Arkansas.

Pegasus Pipeline

Exxon’s pipeline, known as Pegasus, can carry 96,000 barrels a day. The 20-inch (51-centimeter) line runs to Nederland, Texas, from Patoka, Illinois. The pipeline carried a type of dilbit similar to what would be transported on Keystone.

One question central to the debate is whether this type of fuel is more corrosive than conventional crude.

Fuel from Alberta’s oil sands can pose a greater risk if it is transported at a higher temperature or under greater pressure, Richard Kuprewicz, president of Accufacts Inc., a Redmond, Washington-based pipeline safety consultant, said yesterday in a telephone interview.

Operators using modern pipeline-safety techniques can manage the risks by cleaning out the line more frequently or carefully monitoring how the bitumen is diluted, he said.

“You just don’t write off the corrosion threat,” he said. “You’ve got to be sure you’re managing it.”

‘Stronger Standards’

The National Wildlife Federation, based in Reston, Virginia, asked the U.S. last month to develop stronger standards for transporting tar-sands oil.

The group said in a statement that the fuel has the consistency of “gritty peanut butter.” Because it’s heavier than conventional crude, it is often tougher to clean up, particularly if it leaks into water bodies where it sinks to the bottom rather than floating on top, Murphy said.

“Whether it’s the proposed Keystone XL pipeline, or this mess in Arkansas, Americans are realizing that transporting large amounts of this corrosive and polluting fuel is a bad deal for American taxpayers and for our environment,” Representative Edward Markey, a Massachusetts Democrat, said in a statement.

The U.S. Environmental Protection Agency last month directed Enbridge Inc. (ENB) to perform more dredging in Michigan’s Kalamazoo River as part of a cleanup from a July 2010 rupture of a 30-inch pipeline that also carried heavy crude.

More than 843,000 gallons spilled during the leak. The oil flowed into Talmadge Creek before entering the Kalamazoo River, coating birds and wildlife with an oily residue.

Late 1940s

Exxon said the section that ruptured in the Arkansas town of Mayflower, about 22 miles northwest of Little Rock, was installed in the late 1940s. Larry Farnsworth, a spokesman for Representative Lee Terry, a Nebraska Republican who supports Keystone, said the spill shows the need for the U.S. to upgrade its infrastructure. A portion of the pipeline would cross Terry’s home state.

Keystone will be the “most modern and highly engineered pipeline that can be built,” Farnsworth said in a phone interview yesterday.

Shawn Howard, a spokesman for TransCanada, said the company has agreed to higher safety standards with U.S. regulators for the Keystone XL, such as increasing the number of shutoff valves, boosting inspections and burying the pipe deeper in the ground.

The Arkansas spill “is an unfortunate circumstance and demonstrates the pipeline industry must continue to focus on the safe, reliable operation of its energy infrastructure,” Howard said in an e-mail yesterday.

364 Spills

Last year, there were 364 spills from pipelines in the U.S. that released about 54,000 barrels of oil and refined products, according to the Pipeline & Hazardous Materials Safety Administration, a division within the Department of Transportation. Any incident in which more than five gallons of fuel leaked is counted as a spill.

Each year, about 11.9 billion barrels of oil, gasoline and other refined products are pumped across the network of pipelines, said John Stoody, director of government and public relations for the Association of Oil Pipe Lines, a Washington- based group whose members own about 85 percent of the liquid pipelines in the U.S.

“Incidents do happen, but they’re rare,” Stoody said in an interview. There are 119,000 miles of pipelines carrying crude oil and refined products in the U.S., Stoody said.

“The properties of Canadian oil sands crude are similar to other heavy crudes from California, Venezuela and other places and transported safely across the U.S. for decades,” Stoody said in an e-mail.

In Arkansas, Exxon has said it collected about 12,000 barrels of oil and water from the spill, according to a statement yesterday from the Mayflower Incident Unified Command Joint Information Center. The town recommended that 22 homes be evacuated, it said. Exxon (XOM) said no oil had reached nearby Lake Conway.

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net; Bradley Olson in Houston at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Timothy Franklin at tfranklin14@bloomberg.net

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