* Enbridge tentatively plans to install new pipe on Monday

* Estimates 1,200 barrels spilled from Line 14

* No restart estimate for 318,000 bpd pipeline to Chicago

* Canada company under fire for safety as $3 bln expansion begins

By Brendan O'Brien

GRAND MARSH, Wis., July 29 (Reuters) - Canada's Enbridge Inc prepared on Sunday to replace part of a pipeline that leaked more than 1,000 barrels of oil in a Wisconsin field, shutting down a key conduit from Canada and provoking fresh ire from Washington.

The spill on Friday is the latest in a series of incidents that threaten to damage the reputation of a company that launched its most ambitious expansion program ever just two months ago. It came almost two years to the day after a ruptured Enbridge line fouled part of the Kalamazoo River in Michigan.

On Sunday, Enbridge said it tentatively planned to install a new section of pipe on Monday, July 30, although it was still unable to say when the 318,000 barrels-per-day Line 14 would resume service or what had caused the spill, which blackened a small field but did not appear to cause major damage.

"The line has been uncovered to begin removing the failed section and send it to a metallurgical lab for examination," U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) spokesman Damon Hill said. A PHMSA official said that all of the pooled oil had been cleaned up.

The closure of the line, which transports mainly light crude to Chicago-area refineries, had little impact on U.S. oil futures, which dipped 5 cents to $90.08 a barrel in late Sunday trade. But a prolonged closure could support domestic prices in the cash market if regulators order additional work.

Although the spill appeared to be relatively small and quickly contained, it comes at a delicate time for Enbridge, which suffered another leak in Alberta, Canada, a month ago and endured a scathing report from U.S. safety regulators over its handling of the Michigan incident in 2010, with employees likened to the "Keystone Kops" for their bungled response.

"Enbridge is fast becoming to the Midwest what BP was to the Gulf of Mexico, posing troubling risks to the environment," U.S. Representative Ed Markey, the top Democrat on the Natural Resources Committee, said in a statement.

"The company must be forthcoming about this entire incident, and deserves a top-to-bottom review of their safety culture, procedures and standards," said Markey, an outspoken critic of increasing imports of Canada's heavy oil sands crude.

Canada is the largest source of foreign crude for the United States, supplying over 2.4 million bpd of the more than 8.3 million bpd of imported by the nation on average in July. Enbridge's lines, the world's largest crude oil pipeline system, carry the lion's share of those shipments.

Officials from the U.S. Environmental Protection Agency (EPA) and the Wisconsin Department of Natural Resources are also on site, Enbridge said in a statement.



Just two months ago, Enbridge kicked off one of the most sweeping expansions in its history, announcing a multibillion-dollar series of projects aimed at moving western Canada and North Dakota oil to Eastern refineries and eliminating costly bottlenecks in the U.S. Midwest.

Line 14 is a 24-inch diameter pipe that was installed in 1998, making it a relatively new line. Enbridge said it had been inspected twice in the past five years.


BULGING STOCKS

Analysts said the impact of the disruption on Chicago refineries will depend largely on how much crude they have stockpiled as well as the length of the outage. Total Midwest crude inventories have hit a record high over 110 million barrels over the past two months, according to data from the U.S. Energy Information Administration.

But it wasn't expected to affect global oil prices, which have been balancing the risks of a large-scale disruption in Iranian crude against the struggling world economy this year.

"I think that the pipeline (outage) is more likely to have a greater company impact that it will on the oil (futures) market," said Jason Schenker, president of Prestige Economics LLC in Austin, Texas.

A surge in production from North Dakota and Canada has built up inventories in the U.S. Midwest due to a shortfall of capacity to move the oil into the Gulf Coast refining region.


TWO LANDOWNERS, ONE HOUSE 'COVERED'

In most cases, smaller pipeline leaks can be repaired quickly, although regulators may require significant work if they find any cause for alarm. Following the leak in Michigan two years ago -- which spilled roughly 15 times more oil than the Wisconsin leak if initial estimates of the Friday incident prove correct -- one line was shut for more than two months.

Enbridge said two landowners had been affected and that one family had been relocated for their safety and comfort, but that most of the spill was restricted to the pipeline right-of-way. It kept its estimate of the spill at around 1,200 barrels -- about as much as would fit in six very large oil tanker trucks.

It found some oil on two small farm ponds, but said they did not connect to moving waterways and that drinking wells did not seem to be affected.

Local residents said one house had been "covered with oil". Oil trucks, Enbridge vehicles and about a dozen crews were working in the area, which had been cordoned off by sheriff deputies. Local law enforcement officials said they had been told it may take up to 30 days to clean the area.

Enbridge also said it had briefly shut down two larger adjacent lines -- the 400,000 bpd Line 61 and the 670,000 bpd Line 6A -- but both were pumping again within a day. Together with Line 14, they form the backbone of Lakehead, a 2.5 million bpd network that is the main route for Canadian exports.

Another line, the 180,000 bpd Line 13, which carries diluents from Chicago to Edmonton, Alberta, was restarted late Saturday evening, Enbridge said.


PREVIOUS SPILLS

Just weeks ago, the U.S. National Transportation Safety Board blasted Enbridge's handling of the July 2010 rupture of its Line 6B near Marshall, Michigan, which led to more than 20,000 barrels of crude leaking into the Kalamazoo River.

The NTSB said it found a complete breakdown of company safety measures, and that Enbridge employees performed like "Keystone Kops" trying to contain it. The rupture went undetected for 17 hours.

U.S. pipeline regulators fined it $3.7 million for the spill, their largest ever penalty.

The incidents, plus the most recent spill in Alberta, have caused furor just as the company seeks approval for its C$6 billion Northern Gateway pipeline to Canada's West Coast amid staunch opposition from environmental groups and native communities that warn against oil spills.

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  • Niger Delta ExxonMobil Spill, Nigeria - May 2010

    In Nigeria's Akwa Ibom State, an ExxonMobil pipeline ruptured on May 1 and spilled over a million gallons of oil, <a href="http://www.guardian.co.uk/world/2010/may/30/oil-spills-nigeria-niger-delta-shell" target="_hplink">reported the <em>Guardian</em></a>. The leak continued for seven days before it was stopped. <a href="http://www.huffingtonpost.com/omoyele-sowore/the-oil-spill-no-ones-tal_b_649220.html" target="_hplink">HuffPost blogger Omoyele Sowore explained</a> in July 2010 that an oil spill from ExxonMobil operations was nothing new to the country. He wrote that an "environmental catastrophe [had] been going on since December 2009." He described the toll on Nigeria: "There's oil on the surface of the ocean, wildlife coated in crude, fishermen losing their businesses."

  • Trans-Alaska Pipeline Spill - May 2010

    In May 2010, several thousand barrels of oil spilled from the Trans-Alaska pipeline "during a scheduled pipeline shutdown at a pump station near Fort Greely," <a href="http://www.huffingtonpost.com/2010/05/26/alaska-oil-spill-trans-al_n_589974.html" target="_hplink">explained AP</a>. No injuries were reported and officials said the spill was likely "limited to the gravel on top of the containment area's line."

  • Red Butte Creek Spill, Utah - June 2010

    In June 2010, a Chevron pipeline ruptured and spilled oil into a creek near Salt Lake City, Utah. It was first estimated that over 400 to 500 barrels spilled into the creek, which leads into the Great Salt Lake, <a href="http://www.huffingtonpost.com/2010/06/12/utah-oil-spill-500-gallon_n_610232.html#s99698" target="_hplink">reported AP</a>. Around 150 birds were "identified for rehabilitation." The <a href="http://www.huffingtonpost.com/2010/06/14/utah-oil-spill-officials-_n_611014.html" target="_hplink">oil did not reach the Great Salt Lake</a>, however. <a href="http://www.huffingtonpost.com/2010/07/14/chevron-cited-for-oil-spi_n_646340.html" target="_hplink">Chevron was later cited for the spill</a>, which released an estimated 33,000 gallons in total. In March 2012, <a href="http://www.huffingtonpost.com/huff-wires/20120324/us-oil-spill-utah/" target="_hplink">a group of 66 residents of a Salt Lake City neighborhood sued Chevron</a> for damage caused by the Red Butte Creek spill and a smaller spill in December 2011.

  • Kalamazoo River Spill, Michigan - July 2010

    In late July 2010, an Enbridge pipeline in southwestern Michigan sprung a leak and <a href="http://www.huffingtonpost.com/2010/07/27/michigan-oil-spill-among_n_661196.html" target="_hplink">spilled over 800,000 gallons of oil into a creek</a> which flows into the Kalamazoo River. By August, a regional EPA administrator said that significant progress had been made at the site, but "the agency cautioned that it will take months to complete the cleanup," <a href="http://www.huffingtonpost.com/2010/08/02/michigan-oil-spill-epa-of_n_667556.html" target="_hplink">reported AP</a>. By the end of September, <a href="http://www.huffingtonpost.com/2010/09/27/michigan-oil-pipeline-res_n_741233.html" target="_hplink">the pipeline -- which travels from Ontario to Indiana -- was back in operation</a>. The EPA later <a href="http://www.huffingtonpost.com/huff-wires/20111116/us-michigan-river-oil-spill/" target="_hplink">reported that about 1.1 million gallons of oil were recovered</a>, but pipeline operator Enbridge said that it would stick with previous estimates that only about 843,000 gallons were spilled.

  • Xingag Harbor Spill, Dailan, China - July 2010

    In July 2010, China experienced what was reported as the "<a href="http://www.huffingtonpost.com/2010/07/21/china-oil-spill-grows-off_n_653852.html#s120708" target="_hplink">country's largest reported oil spill</a>" after a pipeline rupture near the northeastern port city of Dailan. Several days after the spill, cleanup efforts were underway over a 165 square mile (430 square kilometer) area of the Yellow Sea. The Chinese government reported that about 1,500 tons or 461,790 gallons of oil had spilled, but <a href="http://www.huffingtonpost.com/2010/07/30/china-oil-spill-far-bigge_n_665038.html#s120708" target="_hplink">experts contended that the spill could have been "dozens of times larger,"</a> reported AP.

  • Peace River Spill, Alberta, Canada - April 2011

    In late April 2011, a pipeline in northwestern Alberta began leaking, and created the worst spill in the province in 36 years, <a href="http://www.calgaryherald.com/news/alberta/Rainbow+pipeline+leak+largest+years/4720888/story.html" target="_hplink">reported the <em>Calgary Herald</em></a>. About 28,000 barrels of oil were reportedly spilled from the Rainbow pipeline, which is operated by Plains Midstream Canada. The <em>Globe and Mail</em> revealed that the pipeline operators "<a href="http://www.theglobeandmail.com/report-on-business/oil-on-rainbow-line-halted-8-hours-after-problem-detected/article2013335/" target="_hplink">detected a potential problem nearly eight hours before halting the flow of crude</a>." A nearby school in a First Nation community was closed after residents reported "nausea, burning eyes and other symptoms," and several animals were found dead. In late July, Plains Midstream <a href="http://www.huffingtonpost.ca/2011/07/28/alberta-pipeline-owner-as_n_912796.html" target="_hplink">requested to re-open the pipeline</a> and begin to ship oil to Edmonton again.

  • Bohai Bay Spill, China - June 2011

    In June 2011, an oil <a href="http://www.huffingtonpost.com/2011/07/01/china-offshore-oil-spills-bohai-bay_n_888473.html" target="_hplink">spill occurred about 25 miles off the coast of China's Shandong province</a> in Bohai Bay. A second spill followed in July. In late August, <a href="http://www.huffingtonpost.com/2011/08/26/new-seeps-in-china-spill_n_937809.html" target="_hplink">it was reported</a> that ConocoPhillips had discovered more oil seeps in Bohai Bay, although only "1 to 2 liters (a quarter to a half-gallon) of oil and drilling mud were being released each day." The company reported that the 2011 spills released 700 barrels of oil and 2,500 barrels of drilling mud into the bay and that most of it was recovered. In September, <a href="http://www.huffingtonpost.com/2011/09/05/china-oil-spill-conocophillips_n_949745.html" target="_hplink">China's State Oceanic Administration claimed that oil was still seeping</a> underwater. In early 2012, Texas-based ConocoPhillips <a href="http://www.huffingtonpost.com/huff-wires/20120124/as-china-oil-spill/" target="_hplink">reached a settlement deal with the Chinese government</a> for $160 million.

  • Yellowstone River Spill, Montana - July 2011

    In July 2011, a pipeline beneath Montana's Yellowstone River ruptured and sent an oil plume 25 miles downstream, <a href="http://www.huffingtonpost.com/2011/07/02/yellowstone-oil-spill-pro_n_889363.html" target="_hplink">reported AP</a>. Despite reassurances from ExxonMobil that the pipeline was safe, <a href="http://www.huffingtonpost.com/2011/07/06/yellowstone-river-oil-spill-exxon-mobil_n_891246.html" target="_hplink">the July spill released what was originally estimated to be 42,000 gallons of oil</a>. With other 1,000 workers assisting the cleanup, ExxonMobil <a href="http://www.huffingtonpost.com/2011/11/04/yellowstone-river-cleanup-costs_n_1077106.html" target="_hplink">estimated that it would cost $135 million to clean the river</a>. In January 2012, <a href="http://www.huffingtonpost.com/2012/01/19/exxon-yellowstone-oil-spill_n_1216830.html" target="_hplink">it was reported</a> that ExxonMobil had increased its estimate of the spill size by 500 barrels. AP later <a href="http://www.huffingtonpost.com/2012/04/06/yellowstone-river-spill-response-plan_n_1408328.html" target="_hplink">reported the estimated spill size as 63,000 gallons</a>. <em><strong>CORRECTION:</strong> A previous version of this slide stated the estimated spill size as 63,000 barrels instead of gallons.</em>

  • North Sea Spill, United Kingdom - Aug. 2011

    In August 2011, <a href="http://www.huffingtonpost.com/2011/08/15/north-sea-spill-uk-oil-spill_n_927078.html" target="_hplink">an oil rig off the eastern coast of Scotland began leaking</a> oil into the North Sea. Royal Dutch Shell, which operates the Gannet Alpha oil rig, initially reported that 54,600 gallons of oil were spilled. A second leak soon occurred, turning the spill into the worst in the North Sea in a decade, <a href="http://www.huffingtonpost.com/2011/08/16/north-sea-oil-spill-shell_n_927941.html" target="_hplink">reported AP</a>. Several days later, Shell announced that it had "closed a valve from which oil was spilling into the North Sea," <a href="http://www.huffingtonpost.com/2011/08/19/shell-says-it-has-closed-_n_931379.html" target="_hplink">according to AP</a>. The spill released about 1,300 barrels of oil, which spread out over a 2.5 square mile (6.7 square kilometer) area.

  • Campos Basin Spill, Rio de Janeiro, Brazil - Nov. 2011

    In mid-November 2011, Brazilian authorities began investigating an offshore spill near Rio de Janeiro, <a href="http://www.huffingtonpost.com/2011/11/17/chevron-oil-spill-brazil_n_1100062.html" target="_hplink">reported AP</a>. Chevron initially reported that between 400 and 650 barrels of oil had spilled into the Atlantic, while a nonprofit environmental group using satellite imagery estimated that the spill rate was at least 3,738 barrels per day. Chevron soon claimed full responsibility for the spill. The brazilian division's COO said, Chevron "<a href="http://www.huffingtonpost.com/2011/11/20/brazil-oil-spill-chevron-_n_1104070.html" target="_hplink">takes full responsibility for this incident</a>," and that "any oil on the surface of the ocean is unacceptable to Chevron," reported AP. In December, Brazilian prosecutors announced that they were <a href="http://www.huffingtonpost.com/2011/12/14/brazil-oil-spill-chevron-payment_n_1149554.html"target="_hplink">seeking $10.6 billion in damages</a> from Chevron for the spill that leaked nearly 3,000 barrels of oil. In March 2012, a Brazilian federal judge <a href="http://www.huffingtonpost.com/2012/03/18/brazil-oil-spill-chevron_n_1355923.html" target="_hplink">allowed prosecutors to file criminal charges against Chevron and Transocean</a> and 17 executives from both companies were barred from leaving Brazil.

  • Rena Spill, New Zealand - Oct. 2011

    In October 2011, a Liberian-flagged cargo ship ran aground on a reef in Northern New Zealand and began leaking oil. With oil washing up on shore, a government minister deemed it <a href="http://www.huffingtonpost.com/2011/10/11/new-zealand-oil-spill_n_1004643.html" target="_hplink">the country's largest maritime environmental disaster</a> a week later. Although over 2,000 sea birds were killed by the spill that spilled about 400 tons of fuel oil, <a href="http://www.huffingtonpost.com/2011/11/22/new-zealand-oil-spill-penguins_n_1107289.html" target="_hplink">343 little blue penguins were rescued and cleaned of oil</a>. <em>[<a href="http://www.huffingtonpost.com/2011/12/22/new-zealand-oil-spill-penguins-released_n_1151788.html" target="_hplink">Watch video of the penguins' release into the wild here.</a>]</em> In January, <a href="http://www.huffingtonpost.com/2012/01/10/new-zealand-oil-spill-ship_n_1196568.html" target="_hplink">half of the stricken Rena began sinking</a> into the sea after breaking apart and spilling over 100 cargo containers.

  • Nigeria Oil Spill - Dec. 2011

    The spill, which took place near the coast of Nigeria, was reported as "likely the worst to hit those waters in a decade," <a href="http://www.huffingtonpost.com/2011/12/22/shell-oil-spill-nigeria_n_1164891.html" target="_hplink">according to AP</a>. After two days, the spill had affected 115 miles (185 kilometers) of Nigerian coastline. Several days after the December 20 spill, <a href="http://www.huffingtonpost.com/2011/12/26/shell-nigeria-oil-spill_n_1170198.html" target="_hplink">Shell reported that the leak -- which occurred about 75 miles offshore -- had been contained before it reached the Nigerian coast</a>. The spill, which covered 350 square miles of ocean at its peak, was reported as having released less than "40,000 barrels -- or 1.68 million gallons" of oil.

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