Federal agency shuts down Keystone pipeline

[June 04, 2011]  WASHINGTON (AP) -- The U.S. pipeline safety agency Friday blocked a Canadian company from restarting its Keystone oil pipeline until U.S. officials are satisfied the company has made required repairs and completed safety tests.

The order by the Pipeline and Hazardous Materials Safety Administration cites two leaks last month on the 1,300-mile pipeline, which carries oil from Canada through North Dakota, South Dakota and Nebraska. One arm then travels through Missouri to Illinois, while another goes through Kansas to Oklahoma.

A spokeswoman for the pipeline agency said Friday that federal inspectors will closely review repair work done by the pipeline's owner, Calgary-based TransCanada Corp. The company reported a May 7 leak of about 400 barrels in North Dakota, and a leak of about 10 barrels last Sunday in Kansas.

TransCanada is seeking to build a second pipeline from western Canada to the Texas Gulf Coast -- a project that has drawn fierce opposition from environmental groups who call the pipeline an ecological disaster waiting to happen. The proposed pipeline, like the existing pipeline, would carry crude oil extracted from tar sands in Alberta, Canada, to refineries in the U.S. Critics say the tar sands produce "dirty oil" that requires huge amounts of energy to extract, while supporters say the two pipelines would create thousands of jobs and help cut $4-a-gallon prices at the pump.

Anthony Swift of the Natural Resources Defense Council, an environmental group, said the federal order blocking the Keystone line "should be a clarion call" for the U.S. State Department to seriously consider safety concerns posed by the proposed pipeline from Canada through Montana to Texas.

State Department approval is needed because the project crosses the U.S. border.Pipeline regulators need time to sort out what has gone wrong with the current Keystone project before moving forward with the new one, dubbed Keystone XL, Swift said.

"The history of Keystone has shown that these pipelines are dangerous. State shouldn't fast track the review of Keystone XL until we know how they can be built and operated safely," he said.

Terry Cunha, a spokesman for TransCanada, said the company is focused on ensuring it complies with all 14 conditions set out by the U.S. order. The company hopes to have the pipeline system "up and running within a few days," Cunha said, although he could not give an exact timetable.

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Online:

www.phmsa.dot.gov/

www.transcanada.com/

[Associated Press; By MATTHEW DALY]

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