Enbridge shuts third line in U.S. due to leak
By Shaun Polczer, Calgary Herald
September 14, 2010
Enbridge Inc. on Monday said it had substantially cleaned up an oil spill in Illinois even as a third export line to the U.S. was shut down after a leak near Buffalo, N.Y.
Enbridge Energy Partners, the Houston-based affiliate that operates Enbridge's U.S. pipeline network, reported that 6,100 barrels escaped from its Line 6A into an industrial park near Romeoville, Ill., on Thursday, and that 6,050 barrels had been sucked up by vacuum trucks over the weekend.
"Enbridge personnel continue to meet with businesses, organizations and people in the area to address their concerns," said partnership president Terrance McGill.
"The health and safety of the public and of the people working on the cleanup remain Enbridge's priority as we respond to the leak."
About 300 people remain on site to complete the cleanup, it added, on top of the 2,055 currently cleaning up a previous spill in Michigan that dumped 19,500 barrels into a tributary of the Kalamazoo River.
Also on Monday, Enbridge spokespeople said they were responding to a third leak near Buffalo after Line 10 was reportedly damaged during maintenance work, although the cause of the leak hasn't been determined.
Enbridge spokesman Glenn Herchack confirmed a "potentially very low volume leak" and said the company was notifying the appropriate regulatory authorities.
"We have personnel on site and are sending additional resources to assist with that investigation," he said in an interview.
Line 10 is a 144-kilometre line that moves about 70,000 barrels per day from Westover, Ont., to Kiantone, N.Y., through Buffalo, carrying synthetic oil from the oilsands along with condensate and other light crudes.
All told, the leaks have shut in about 930,000 barrels per day, or more than a third of the 2.1 million barrels Canada shipped to the United States in June, according to figures posted by the U.S. government's Energy Information Agency.
Line 6A remains shut down following Thursday's leak in Illinois and there is no estimate of when it will be restarted.
In a news release, Enbridge said it is working with shippers to divert crude oil volumes to other available pipelines and storage facilities.
Line 6B, the 190,000 barrel per day link that burst in late July, remains shut pending approval from U.S. regulatory authorities to restart the line. Line 6A, which flows into Line 6B, was already operating at reduced rates below its 670,000 barrel capacity because of the closure in Michigan.
The EPA, which is the lead investigating agency in the first two incidents, has given the company until Sept. 27 to complete the task of cleaning up the initial spill near Marshall, Mich.
But observers warned the bottom lines of several Calgary heavy oil producers could be hurt by a prolonged outage.
NAL Oil and Gas Trust said in an operational update Monday it too would be hurt by a combination of the pipeline outages and weather delays in southeast Saskatchewan.
"Until the extent and duration of the latest Enbridge outages are known, it will be difficult to ascertain the full potential impact on NAL's third-quarter volumes and full-year guidance," it said.
In a research note, UBS Securities analysts George Toriola and Chad Friess estimated third-quarter cash flows of major heavy oil and oilsands producers such as Suncor, Canadian Natural Resources, Husky, Imperial Oil and Cenovus Energy could be hit by as much as 10 per cent depending on the duration of the closures.
The report suggested that differentials, or discounts applied to heavy oil compared to lighter benchmarks, have doubled to 35 per cent since the first Enbridge spill in July.
Most affected is CNRL, it added, because it has no refineries or up-graders to offset the impact of lower price spreads.
"Line 6A has the potential to severely impact industry," UBS said. "Bottom line, there is no clear solution to get crude to the Chicago area refineries if this outage persists."
Although UBS said Enbridge is "relatively insulated" from a financial perspective, Enbridge shares fell 62 cents on the Toronto Stock Exchange Monday to close at $51.88.
spolczer@theherald.canwest.com
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