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Enbridge suffers another pipeline breach
News Articles | Globe and Mail | Nathan VanderKlippe | September 09, 2010
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An embattled Canadian pipeline company has shut down another major crude transportation link after a leak sent oil bubbling to the surface in a small Illinois town.
Enbridge Inc. halted all oil moving through a pipeline it calls Line 6A after the leak was discovered in an industrial park in Romeoville, Ill.
Though neither the company nor authorities could provide an estimate of how much oil leaked, the accident comes as Enbridge continues work to clean up a different spill in Michigan, where a major summer rupture of a different pipe called Line 6B contaminated a major river system.
The Illinois leak, by comparison, appears to have been relatively small, and was halted before oil could reach the nearby DuPage River, according to a spokeswoman for the Illinois Environmental Protection Agency.
The spill has, however, has raised new questions among both environmental and financial observers about the safety of Enbridge pipelines, which are capable of exporting 2.1 million barrels of oil a day, or 71 per cent of Western Canada's output.
"Enbridge has lost its ability to look the public in the eye and say, ‘Trust me, our pipelines are safe,' " said Stephanie Goodwin, the B.C. director of Greenpeace, which has fiercely opposed an Enbridge plan to build a new pipeline through northern B.C. that would enable oil sands exports to Asia.
Chad Friess, a financial analyst with UBS Securities, cautioned that minor leaks are not uncommon in the pipeline industry, and that it is difficult to make a judgment until the size of the Illinois spill is known.
But, he said, "if these problems keep cropping up, it might be an indication that [Enbridge is] not keeping up maintenance."
The new spill comes as Enbridge continues to await government approval to re-open the Michigan line, which has been closed since July 26. The Illinois leak also comes at a delicate time for pipeline rival TransCanada Corp., which is fighting to convince the U.S. State Department that it can safely build a proposed new pipeline, called Keystone XL, to bring oil sands crude to the U.S. Gulf Coast.
The Michigan spill, which took place only weeks after BP capped its runaway well in the Gulf of Mexico, had already made Enbridge the focus of criticism among those who saw the accident as evidence that crude oil is a dangerous product.
The Enbridge problems have already caused a substantial dip in the value of Canadian crude, costing the industry millions a day; market sources said word of the second leak immediately sent those prices down even further.
Those problems are almost certain to be magnified if the Illinois spill causes a prolonged pipeline outage. Line 6A is a major component of the Enbridge system, carrying up to 670,000 barrels per day from Superior, Wis., to Griffith, Ind. It had become an important alternative for oil companies seeking to get their product to market.
Despite the two spills, the industry argues that it operates in a highly regulated industry and adheres to tough safety standards.
"I don't look at individual leaks as being more damaging to our reputation. I look at them as providing a better opportunity to learn," said Kim McCaig, chief operations officer for the Canadian Energy Pipeline Association.
"Compared to any other means of transportation, we are one of the best – if not the best – means of transporting that type of volume long distances across countries."
Tagged with: enbridge, oil spill, pipeline safety, dupage river, illinois
