Keystone Pipeline shuts down after oil leak, halting flow of 600,000 barrels a day

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CNN Business

The Keystone pipeline was shut down following a leak discovered near the Kansas-Nebraska border.

The shutdown of the main pipeline that carries crude oil from Canada sparked volatility in the energy market on Thursday, with oil prices briefly jumping as much as 5% before falling back.

Federal safety regulators are investigating the leak and have deployed to the site, a spokesperson for the Pipeline and Hazardous Materials Safety Administration told CNN.

TC Energy of Canada

said it initiated an emergency shutdown of the Keystone pipeline system at 9 p.m. ET Wednesday after alarms sounded and pressure in the system dropped. The company said the system remains closed as “our crews are actively responding and working to contain and recover the oil.”

TC Energy of Calgary says there has been a “confirmed oil release” in a creek located about 20 miles south of Steele City, Nebraska. About 14,000 barrels of oil were spilled late Thursday, the company said.

PHMSA, a branch of the Department of Transportation responsible for enforcing safety regulations for pipelines, said the leak was near Washington, Kansas, near the border with Nebraska.

The spokesperson said the agency continues to investigate the cause of the leak.

US oil prices rose as high as $75.44 a barrel on the news, before falling. In recent trading, oil rose 0.8% to $72.57 a barrel. The gains follow a selloff in recent days that left crude at levels not seen since December 2021.

No timeline was given for the restart of the Keystone Pipeline, a 2,700-mile system that delivers mostly Canadian oil to major refineries across America. The pipeline can carry more than 600,000 barrels of oil per day.

Matt Smith, an analyst at commodities data provider Kpler, said the Canadian oil normally transported by Keystone cannot be easily replaced.

“We are seeing a price spike because it will impact refiners who take this crude,” Smith said.

“Our primary focus at this time is the health and safety of on-site staff and personnel, the surrounding community, and the mitigation of environmental risks through the deployment of booms downstream as we work to contain and prevent further release migration,” TC Energy said. in a report.

The leak occurred on an existing Keystone pipeline which is separate from Keystone XL, a controversial pipeline project which has been completed last year after President Joe Biden revoked the pipeline license on his first day in office.

The Keystone pipeline has had leaks in the past, including one in South Dakota in 2016 and another in 2019 in North Dakota that affected nearly five acres.

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