News
Enbridge hit by new pipeline leak
Sep 9, 2010, Globe and Mail (Read article on originating site site)
Enbridge Inc. (ENB-T52.88-0.22-0.41%) has halted oil moving through a second major crude oil pipeline after discovering another spill in the United States.
The company has “shut down Line 6A and isolated it to investigate a leak” in Illinois, a company spokesman said Thursday.
Line 6A carries crude from Superior, Wis., to Griffith, Ind.
“Enbridge employees are on site and currently assessing the situation. And we have either notified or we’re currently notifying all appropriate regulatory authorities,” said Glenn Herchak, the spokesman.
The leak took place in Romeoville, Ill.
It was not immediately clear how much crude was lost, but the closing of another line comes as a stunning blow to Enbridge, which had taken great pains to clean up an earlier spill on Line 6B in Michigan, where 19,500 barrels of crude leaked, some of it into a creek that runs into the important Kalamazoo River.
Small leaks are a relatively normal part of pipeline operations, and Chad Friess, an analyst with UBS Securities, said he would reserve judgment until more details emerge on the significance of the latest spill.
But, he said, “this could be an indication that the problem is more pervasive than just localized to one particular issue [in Michigan] that was a once-in-a-blue-moon type event.”
Enbridge has laid plans to restart production through the Michigan line and conducted numerous tests to ensure it is safe. However, the U.S. Office of Pipeline Safety has not yet approved plans to resume production.
In mid-August, the company also reduced throughput by about 8 per cent on its 490,000 barrel-per-day Line 5, a separate line that brings crude into southern Ontario, as part of what it called its “integrity management” program.
The problems with the Enbridge pipelines have already caused a substantial dip in the value of Canadian crude; market sources said word of the second leak has further hit prices.
Line 6A is a major pipe that feeds both Line 6B, the pipe that was closed after the Michigan spill, and another line to Cushing, Okla., a major crude hub. The route to Cushing had taken on new importance as an alternative for Canadian oil shippers once Line 6B was closed; if the Line 6A closing is long-lasting, it could cause a substantial amount of additional disruption.
The second leak comes on the same day Enbridge chief executive officer Pat Daniel met with U.S. Speaker of the House Nancy Pelosi in Ottawa, where high-powered oil executives discussed the improving environmental record of the oil sands.
Pipeline companies are paid by shippers to continuously maintain their lines, replacing sections where trouble spots occur.
“That’s what gives me comfort: the fact that they’re required to do maintenance. Generally a pipeline can last forever as long as there’s throughput through it,” Mr. Friess said.
But this second leak could be a worrisome sign.
“They obviously have to keep up maintenance, and if these problems keep cropping up, it might be an indication that they’re not keeping up maintenance.”