Enbridge suffers new oil leak, shuts key pipeline

CALGARY (Reuters) - Canada's Enbridge Inc. said an oil spill in Wisconsin had forced it to shut down part of the main pipeline system delivering Canadian crude to U.S. refiners on Friday, a fresh blow for a firm already facing fierce criticism from regulators.

Almost two years to the day after a major spill on a different part of its network, Enbridge shut down Line 14 after a leak that it estimated at around 1,200 barrels of oil. The 318,000 barrel per day (bpd) line, part of the Lakehead system, carries light crude oil to Chicago-area refineries.

"Enbridge is treating this situation as a top priority," said Richard Adams, vice president of U.S. Operations at Enbridge. "We are bringing all necessary resources to bear."

The cause of Friday's spill was undetermined and Enbridge Energy Partners said it had no estimate on when flows would resume. Line 14 is one of four lines that ship mainly Canadian crude via Lakehead, a 2.5 million bpd network that is the principle route for Canadian exports.

The news will not help Enbridge build public trust in its network, which has come under scrutiny following several high-profile incidents, including a spill in Alberta last month and a massive leak in Michigan two years ago.

Just weeks ago, the U.S. National Transportation Safety Board delivered a scathing report of Enbridge's handling of the July 2010 rupture of its Line 6B near Marshall, Michigan, which led to more than 20,000 barrels of crude leaking into the Kalamazoo River. U.S. pipeline regulators fined it $3.7 million for the spill, their largest ever penalty.

The incidents have caused furor just as the company seeks approval for its C$6 billion Northern Gateway pipeline to Canada's West Coast from Alberta amid staunch opposition from environmental groups and native communities that warn against oil spills on land and in coastal waters.

This month, Enbridge Chief Executive Pat Daniel acknowledged in an interview with Reuters that the criticism of the company, especially from the U.S. regulator, makes it more difficult to convince Canadians to support Northern Gateway.

"It really raises some serious questions about the system, and we really have to take a hard look at this," said Dan Woynillowicz, spokesman for the Pembina Institute, a Canadian-based energy and environment think tank.

The spate of incidents shows the need for regulators to take a much more active role in investigation and enforcement, possibly including more physical checks by regulators of data submitted by operators, he said.

This month, under growing public pressure, Alberta said it would launch a probe into its pipeline network.

KEYSTONE COPS

In its report earlier this month, the NTSB said it found a complete breakdown of company safety measures, and that Enbridge employees performed like "Keystone Kops" trying to contain it. The rupture, which went undetected for 17 hours, spilled more than 20,000 barrels of heavy crude.

The board said the main failure was due to multiple small "corrosion-fatigue cracks" that grew over time to create a breach in the pipe over 80 inches long. It said Enbridge knew for years that the section of pipe was vulnerable.

The Pipeline and Hazardous Materials Safety Administration, or PHMSA, said its probe uncovered two dozen regulation violations related to the leak, which spawned a massive clean up that the company has estimated will cost more than $700 million.

In response to the report, Enbridge said it believed its personnel were trying to do the "right thing" at the time.

Enbridge said Line 14 was a 24-inch diameter pipe that was installed in 1998, making it a relatively new line. In most cases, smaller pipeline leaks can be repaired quickly allowing operations to resume pumping, although regulators may require significant work if they find any cause for alarm. Following the leak two years ago Line 6B was shut for over two months.

No injury was reported at the line, which is near Grand Marsh, Wisconsin, Enbridge said.

(Reporting by Neha Alawadhi in Bangalore, additional reporting by Jeff Jones in Calgary, writing by Jonathan Leff; Editing by Sanjeev Miglani)

Source: http://news.yahoo.com/enbridge-shuts-large-canada-u-pipeline-spill-022144043--finance.html

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