Residents hold their nose as crews mop up huge U.S. oil spill

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WASHINGTON — Residents near the site of the worst U.S. oil pipeline leak in a decade took the commotion and smell in stride as emergency crews labored to clean up in near-freezing temperatures, and investigators searched for clues to what caused the spill.

A heavy odor of oil hung in the air as tractor trailers ferried generators, lighting and ground mats to a muddy site on the outskirts of this farming community.

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Pipeline operator TC Energy on Friday said it was evaluating plans to restart the line, which carries 622,000 barrels of oil per day to U.S. refineries and export hubs. It did not provide details of the breach or when a restart on the broken segment could begin.

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“We could smell it first thing in the morning; it was bad,” said Washington resident Dana Cecrle, 56. However, he shrugged off the disruption: “Stuff breaks. Pipelines break, oil trains derail.”

Environmental specialists from as far away as Mississippi were helping with the clean-up and federal investigators combed the site to determine what caused the breach in the 36-inch (91-cm) pipeline.

THIRD BIG SPILL

TC Energy aims to restart on Saturday a pipeline segment that sends oil to Illinois, and another portion that brings oil to Cushing on Dec. 20, Bloomberg News reported, citing sources. Reuters has not verified those details.

It was the third spill of several thousand barrels of crude on the 2,687-mile (4,324-km) pipeline since it opened in 2010. A previous Keystone spill had caused the pipeline to remain shut for about two weeks.

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“Hell, that’s life,” said 70-year-old Carol Hollingsworth of nearby Hollenberg about the latest spill. “We got to have the oil.”

TC Energy had around 100 workers leading the clean-up and containment efforts, and the U.S. Environmental Protection Agency was providing oversight and monitoring, said Kellen Ashford, an EPA spokesperson.

U.S. regulator Pipeline and Hazardous Materials Administration (PHMSA) said the company shut the pipeline seven minutes after receiving a leak detection alarm.

Washington County, a rural area of about 5,500 people, is about 200 miles northwest of Kansas City.

The spill has not threatened the water supply or forced residents to evacuate, Washington County Emergency Management Coordinator Randy Hubbard told Reuters. Workers quickly set up a containment area to restrict oil that had spilled into a creek from flowing downstream.

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“There is no human consumption drinking water that would come out of this,” Hubbard said.

CRUDE BOTTLENECK

A lengthy shutdown of the pipeline could lead to Canadian crude getting bottlenecked in Alberta, and drive prices at the Hardisty storage hub lower, although price reaction on Friday was muted.

Western Canada Select (WCS), the benchmark Canadian heavy grade, for December delivery last traded at a discount of $27.70 per barrel to the U.S. crude futures benchmark, according to a Calgary-based broker. On Thursday, December WCS traded as low as $33.50 under U.S. crude, before settling at around a $28.45 discount.

“The real impact could come if Keystone faces any (flow) pressure restrictions from PHMSA, even after the pipeline is allowed to resume operations,” said Ryan Saxton, head of oil data at consultants Wood Mackenzie. (Reporting by Erwin Seba in Washington, Kansas and Nia Williams in Calgary, Alberta; additional reporting by Arathy Somasekhar, Rod Nickel, and Stephanie Kelly; editing by Gary McWilliams and Stephen Coates)