Recent spills could complicate Canada's plans for more pipelines


CALGARY -- Two pipeline spills in northwest Canada are ratcheting up scrutiny of North America's pipeline network, amid several large, recent spills in the US  and a boom in crude production across the continent.

The Trans Mountain pipeline owned by Kinder Morgan Energy Partners released a "small" amount of crude oil, equivalent to about 12 bbl, in southwestern British Columbia near the town of Kingsvale, the company said Thursday.

The spill followed Apache's disclosure Wednesday of a pipeline spill in northern Alberta earlier this month that released 2.5 million gallons of contaminated water, affecting an area of about 104 acres.

The cause of both spills is under investigation by Canada's chief federal energy regulator, the National Energy Board, which said no injuries have been reported. These and other pipeline accidents, along with a series of recent derailments of trains carrying crude oil, come at a time when North American oil production is soaring and producers scramble to secure additional capacity to ship oil to refineries.

The issue is acute in Alberta, which depends on US refineries to process most of its oil-sands bitumen into gasoline and other products. Worried about dwindling capacity to take Canadian crude to markets, executives and officials have championed proposals for major pipeline expansions, including the Trans Mountain pipeline and TransCanada's Keystone XL project, which the US government is expected to issue a decision on later this year.

Kinder Morgan said in a statement that "a small amount of light crude oil" was found on the surface of its right-of-way as part of routine maintenance on the 300,000-bpd pipeline, which connects the oil sands of Alberta to the Pacific coast in Vancouver. Operating since 1953, it is the only North American pipeline that carries both crude oil and refined products to the Pacific coast.

The incident could complicate its plans to apply for a NEB permit later this year to more than double the pipeline's capacity to 890,000 bpd by 2017. It could also set back efforts by Enbridge to build a brand new line, called Northern Gateway, from Alberta to British Columbia's northern Pacific Coast. It could also raise additional concerns about the controversial Keystone XL project, which is designed to boost oil shipments from Alberta to US refineries on the Gulf coast.

Both Enbridge and Kinder Morgan have faced environmental and native group opposition to their projects. The British Columbia government recently said it couldn't support the Northern Gateway proposal as currently envisioned, citing worry over oil spills.

Apache first reported its spill of so-called produced water to the NEB on June 1, but didn't report the size of the accident until Wednesday. It said the contaminated water released "had already been treated to remove hydrocarbons."

Dow Jones Newswires

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