TransCanada says spill forces shut down of Keystone oil pipeline

The Associated Press

TransCanada Corp. says the Keystone oil pipeline will likely remain shut down for the rest of the week while officials investigate an apparent spill in southeastern South Dakota.

FREEMAN, S.D. (AP) — The Keystone oil pipeline will likely remain shut down for the rest of the week while officials investigate an apparent oil spill in southeastern South Dakota.

Oil covered a 300-square-foot area in a farm field ditch 4 miles from a Freeman-area pump station, about 40 miles southwest of Sioux Falls. It was discovered Saturday. TransCanada Corp. hasn't released the amount of oil.

About 100 workers are investigating where the oil came from and removing the contaminated soil. No pipeline damage had been found as of midmorning Tuesday, company spokesman Mark Cooper said.

TransCanada also said it had found no significant environmental harm. State officials were monitoring the cleanup, and so far TransCanada has "taken the necessary steps," said Brian Walsh, an environmental scientist with the South Dakota Department of Natural Resources.

The pipeline runs from Alberta, Canada, to refineries in Illinois and Cushing, Oklahoma, passing through the eastern Dakotas, Nebraska, Kansas and Missouri. It's part of a pipeline system that also would have included the Keystone XL pipeline had President Barack Obama not rejected that project last November.

The Keystone pipeline can handle 550,000 barrels, or about 23 million gallons, daily. Cooper didn't immediately know the status of the oil that normally would be flowing through the pipeline.

The shutdown will have a short-term impact in which less-heavy Canadian crude will be getting to the market, according to Sandy Fielden, director of energy analytics for RBN Energy LLC. While it might have a temporary impact on some market prices, drivers are unlikely to see an impact at the pump.

"It causes a tightness in the system, but the system is already oversupplied," he said. "We're sending that crude to Cushing, which has got record inventories."

The pipeline has never had a leak since it began operating in 2010, according to Cooper, though there have been several leaks at pumping stations.

"It's potentially the first time we've seen anything on the pipeline itself," he said.

The Dakota Rural Action conservation group issued a statement saying it was "more than a little concerning" that TransCanada didn't inform the public until Monday. Cooper said the company notified landowners and regulators immediately on Saturday, and waited until Monday to notify the public so it had more information available.

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