Will the spill kill the deal?

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Easter holidays came out to not be very lucky week for the industry. While we were working on new issue of YoungPetro covering ExxonValdez spill from late 80’s North-American oilers got hit by two nasty accidents. First, Canadian Pacific Railway train derailed in Minessota, damaging three tankers and leaking around 15,000 gallons of fuel, then two days later Pegasus pipeline raptured in Arkansas spilling thousands barrels of oil and forcing Exxon to shut it down and evacuate 22 houses.

While response teams are working to clean up the oil, U.S. State Department is considering the fate of the 800,000 bpd Keystone XL pipeline, which would carry crude from Canada’s oil sands to the Gulf Coast. The fact that both events involves crude oil extracted from those sands definitely will not be helpful and even they are the first incidents since North-American oil boom started, it gives perfect argument for opponents of the new pipeline. Keystone XL is designed to relief Pegasus in oil transport from Canada to the south refining center. The 65-years-old Pegasus is 848-mile pipeline used to transport crude oil from Texas to Illinois. In 2006 Exxon reversed it to move crude from Illinois to Texas in response to growing Canadian oil production and the ability of U.S. Gulf Coast refineries to process heavy crude. It can carry more than 90,000 barrels per day.

Nearly two years ago Exxon grappled with another crude oil pipeline rupture that sent 1,500 barrels into the Yellowstone River in Montana. Also in November 2010 U.S. Department of Transportation imposed ExxonMobil Pipeline Co with a fine of $26,200 for allegedly allowing more than 5 years to lapse between inspections of a stretch of Pegasus that underlies the Mississippi River, between Missouri and Illinois, last decade.

Exxon pipeline leaks thousands of barrels of Canadian oil in Arkansas | Reuters

Train hauling Canadian oil derails in Minnesota | Reuters


 It seems like a human factor played huge role in these incidents and that regular inspections and renovations could easily reduce risk of it’s recurrence. What do you guys think was real cause of the problem?

Learn more about pipelines:

PetroGraphics: U.S. Pipelines 101

Photo by: Nasdaf (reddit.com)

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