The Keystone pipeline is shutting down after an oil spill, stopping the flow of 600,000 barrels a day

New York
CNN Business
–

Keystone Pipeline has been shut down after a leak was discovered near the Kansas-Nebraska border.

The shutdown of a major oil pipeline carrying crude from Canada sparked volatility in the energy market on Thursday, with oil prices briefly surging 5% before retreating.

A spokesperson for the Pipeline and Hazardous Materials Safety Administration told CNN that federal safety regulators are investigating the leak and have deployed to the site.

Canada Energy TC

(TRP) It said it triggered an emergency shutdown of the Keystone Pipeline System at 9 p.m. ET on Wednesday after alarms were triggered and pressure dropped in the system. The company said the system remains closed because “our crews are actively responding and working to contain and recover the oil.”

TC Energy, based in Calgary He said there was a “confirmed release of oil.” In a creek located about 20 miles south of Steel City, Nebraska. The company said an estimated 14,000 barrels of oil had been unloaded as of late Thursday.

PHMSA, an arm of the Department of Transportation tasked with enforcing safety rules for pipelines, said the spill was located near Washington, Kansas, near the border with Nebraska.

The spokesperson said the agency is continuing to investigate the cause of the leak.

US Oil prices rose to $75.44 a barrel on the news before pulling back. In recent trading, oil rose 0.8% to $72.57 a barrel. The gains follow a sharp sell-off in recent days that left crude oil at levels not seen since December 2021.

No timetable has been set for restarting the Keystone Pipeline, a 2,700-mile system that delivers mostly Canadian oil to major refineries across America. The pipeline can transport more than 600,000 barrels of oil in a day.

Canadian oil typically transported by Keystone is not easily replaceable, said Matt Smith, an analyst at commodity data provider Kpler.

“We are seeing a rise in prices because this will affect the refineries that take this crude,” Smith said.

“Our primary focus right now is the health and safety of employees and employees at the site, and the surrounding community, and mitigating risks to the environment through downstream deployment of spikes as we work to contain and prevent further transmission of the issue,” TC Energy said.

The leak occurred in an existing Keystone pipeline separate from Keystone XL, a controversial pipeline project that was It was terminated last year After President Joe Biden Cancellation of the pipeline permit On his first day in office.

Keystone Pipeline has had leaks in the past, including one in South Dakota in 2016 And the Another one in 2019 In North Dakota that affected nearly five acres.