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Regulators Block Restart Of Keystone Oil Pipeline, Cite Leaks

Keystone Pipeline

First Posted: 06/03/11 06:54 PM ET Updated: 08/03/11 06:12 AM ET

WASHINGTON -- The Obama administration blocked a Canadian company from restarting its controversial oil pipeline on Friday, concluding that "continued operation of the pipeline without corrective measures would be hazardous to life, property and the environment."

In an order released by the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), the Calgary-based TransCanada, was told it must complete a series of safety tests before the 1,300-mile pipeline, known as Keystone 1, which carries crude oil from Canada to Oklahoma, can resume operations.

According to the agency's findings, on May 7, 2011, "a reportable failure incident occurred on pump station piping on the Keystone crude oil pipeline resulting in the release of approximately 400 barrels of crude oil. On May 29, 2011, a second reportable failure incident occurred on piping at another pump station."

The pipeline has spilled 12 times since it began operation less than a year ago.

Jeffrey Wiese, the associate administrator of PHMSA, said the decision was necessary due to "the proximity of the pipeline to populated areas, water bodies, public roadways and high consequence areas, the hazardous nature of the product the pipeline transports, the ongoing investigation to determine the cause of the failures, and the potential for the conditions causing the failures to be present elsewhere on the pipeline."

The order called on TransCanada to conduct "mechanical and metallurgical" tests to analyze the components of the pipeline that failed, as well as carry out a review of the entire system in less than 60 days.

Terry Cunha, a spokesman for Transcanada, said company's focus was no different than that of U.S. pipeline safety regulators, and that it hoped to satisfy the 14 corrective actions laid out by Wiese, within a matter of days.

"We want to ensure the safety and integrity of the system," Cunha said, "and we're going to aim to comply with each of the conditions brought forward as soon as possible."

Cunha added that the company had been working with regulators all week, and had assumed that the agency would be issuing an order Friday.

As for whether this would provide further ammunition for opponents of the company's contentious plans to expand the Keystone pipeline network to refineries along the Texas Gulf Coast -- known as the Keystone XL project -- Cunha thought it was inevitable.

"I'd be ignorant to think that it wouldn't," he said. "We've had two instances of leaks in the past month and certain groups will be using that to demonstrate their issues with these pipelines. But we believe we are building a very safe pipeline."

Cunha said the problems have not been with the pipelines themselves, but with a faulty pump station, and that the pipeline's leak detection system was working as designed.

But that's likely to be cold comfort to opponents of the pipeline, who note the project would pump crude across the Ogallala Aquifer, America's largest aquifer and a source of drinking water for two million people.

"I think this really shows how unwise it is that the State Department is rushing the process and setting an arbitrary deadline," said Alex Moore, a campaigner at the environmental group Friends of the Earth, in a phone interview with HuffPost.

Members of the House Energy and Commerce Committee met last week to discuss a GOP bill that would expedite the permitting of the 1,900-mile Keystone XL, pushing the Obama administration to approve the project before the end of 2011.

"We are relieved that this tar sands oil pipeline has finally been shut down," Moore said in a FoE statement. "TransCanada has shown virtually no interest in addressing the safety problems of piping tar sands oil. The Obama administration made the right move to protect the health and safety of the public."

He added, "The Obama administration must abandon its plans to rush approval of TransCanada's proposed Keystone XL and conduct a serious study of the risks of tar sands oil."

Edward Markey (D-Mass.), the top Democrat on the House Natural Resources Committee, praised the PHMSA's move and called on Congress to immediately hold oversight hearings on the safety of pipeline infrastructure.

"The administration is right to order the continued shutdown off the TransCanada Keystone pipeline until regulators can ensure the pipeline's safety," he said in a statement. "TransCanada needs to ensure the pipeline is safe, secure and can operate without the risk of future leaks. After a series of serious pipeline safety accidents in the past two years, this shutdown raises concerns about the adequacy of industry's inspection and maintenance of the pipelines that deliver the oil and gas Americans rely on."

"Additionally," Markey wrote, "these concerns need to be fully addressed as the administration and State Department evaluate the Keystone XL expansion project."

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