Administration blocks restart of massive oil pipeline, citing leaks

The Obama administration said Friday that a massive pipeline carrying oil across much of the United States must remain shut down until federal regulators are satisfied that it can operate without future leaks.

TransCanada’s Keystone pipeline leaked twice last month, fueling opposition to a pending expansion of the project, which is undergoing a wide-ranging federal review.


The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a “corrective action order” Friday informing TransCanada that it must take a series of steps before resuming normal operations at the pipeline, which runs from Canada to Oklahoma.

“After evaluating the foregoing preliminary findings of fact, I find that the continued operation of the pipeline without corrective measures would be hazardous to life, property and the environment,” Jeffrey Wiese, PHMSA’s associate administrator for pipeline safety, said in the order.

PHMSA is mandating that TransCanada provide a detailed “restart plan,” conduct “mechanical and metallurgical” testing, and analyze the pipeline components that failed last month.

In addition, the order instructs TransCanada to conduct a review of its entire pipeline system within 60 days, among other things.

The order comes at a politically sensitive time for TransCanada. The company is seeking federal approval to expand its Keystone pipeline to carry Canadian oil sands from Alberta to Texas.

The proposed project, known as Keystone XL, is currently undergoing a multi-agency review that is being headed up by the State Department. Comments on the project’s latest layer of environmental review are due by Monday.

Environmental groups have mounted a campaign against the Keystone XL project, arguing that it puts the country at risk of major oil spills and noting that oil sands production results in more greenhouse gas emissions than traditional oil production.

Last month’s Keystone leaks and the administration’s order will certainly fuel the fire of opposition to the proposed Keystone XL project.

The Natural Resources Defense Council pounced on the incident in a blog post Friday, arguing that the leaks and the Transportation Department’s order should serve as a “clarion call for the State Department to seriously consider the safety concerns” associated with the Keystone XL proposal.

“The State Department needs to give U.S. pipeline regulators at the Department of Transportation time to sort out what has gone so horribly wrong with Keystone before moving forward with Keystone XL,” the group said.

But the oil industry and some Republicans have been strong advocates for the approval Keystone XL. They argue that the project will create thousands of new jobs and provide an opportunity for the United States to become less reliant on Middle Eastern oil.

Ben Geman contributed to this story.