A fresh spill in Wisconsin could spell more troubles for the Canadian company that imports more crude into America every day than Saudi Arabia or Mexico -- including heavy fuel from Alberta's politically volatile oil sands.

The Friday leak of 50,000 gallons of light crude from a Wisconsin pipeline run by the U.S. subsidiary of Enbridge Inc. came on the heels of a National Transportation Safety Board (NTSB) report that blasted the company's handling of a 2010 spill in Michigan that ranks as the most expensive U.S. onshore oil disaster. Environmental groups fighting Enbridge's proposed reversal of a pipeline that they say could run heavy oil sands crude to East Coast ports promptly pounced on the new spill.

"Just after the two-year anniversary of the nation's most destructive onshore oil spill in Kalamazoo, [Mich.], Enbridge has proven they haven't changed, dumping thousands more gallons of oil in Wisconsin," Elizabeth Ward of the Sierra Club's Wisconsin chapter said yesterday. "How many more spills on American soil do we have to see before we stop taking pipeline companies at their word on safety?"

Enbridge said over the weekend that the Wisconsin spill from its Line 14, part of the same network that failed in 2010, was contained largely within a field along the pipeline's right of way. Two federal inspectors from the Pipeline and Hazardous Materials Safety Administration (PHMSA) are at the spill site, according to a spokeswoman, and the agency plans to remove the affected pipe for testing to determine the cause of the incident.

"This response demonstrates the improvements we have made to enhance our operations in the areas of emergency response, public awareness, leak detection, control center operations and safety culture," Enbridge spokeswoman Lorraine Little said via email yesterday. "Our control center noticed a drop in pressure and immediately initiated shut down and isolation of the affected section. Enbridge emergency personnel were quickly dispatched to the scene."

The company plans to complete a replacement of the affected pipe today and to work with PHMSA on a restart plan for the line, Little added. The agency is not required to approve such restart plans unless it issues an enforcement order against a pipeline company, which has not yet occurred in the Wisconsin spill.

"We are bringing all necessary resources to bear," said Richard Adams, Enbridge's vice president for U.S. operations, in a weekend statement. "Our immediate focus is on keeping our workers and the public safe as we work to remove the oil and clean up the site."

That Line 14 was not carrying the heavy Canadian crude spilled in Michigan -- which also would run through the controversial Keystone XL pipeline -- at the time of the leak is likely to make little difference to greens who last week savaged Enbridge's safety record and warned that it "cannot be allowed to expand" absent stricter federal involvement (Greenwire, July 23).

In addition to its East Coast reversal, Enbridge also plans to double the capacity of the ruptured Michigan line as it replaces pipe on that network with a minimum of input from federal officials (E&E Daily, July 10).

Rep. Ed Markey (D-Mass.) likened Enbridge to the Midwest's version of BP PLC, alluding to the latter company's Gulf of Mexico oil disaster in a weekend statement.

"This incident renews the debate over whether the pipelines that deliver oil from Canada to the United States can operate safely, and whether expanding the transfer of the dirtiest oil from our neighbor to the North through the so-called Keystone XL pipeline poses more risks than gains, especially when much of that oil is set to be exported to foreign markets," Markey added.

PHMSA took heat from lawmakers in the wake of the Michigan spill and now faces the challenge of implementing several significant new regulations called for in the bipartisan pipeline safety bill that President Obama signed in December. Among those new potential rules for oil and gasline operators are stronger standards for inspection and leak detection programs that companies are asked to maintain.

A study of whether Canadian oil sands crude poses a more significant risk to pipelines also could drive a new round of PHMSA rules that would affect Enbridge's expansion plans, though that work is not expected to wind down for at least another year (Greenwire, June 27).

"The oil pipe industry will want to learn about this accident from Enbridge and regulators as soon as possible, and only once we know the cause can we consider whether there are gaps in laws and regulations that need to be addressed," Association of Oil Pipe Lines President Andy Black said yesterday.

Residual heat for Nexen?

While Enbridge braces for possible fallout from the Wisconsin leak, a Chinese deal to purchase an oil sands crude production company ran into further congressional roadblocks yesterday.

Markey asked Treasury Secretary Tim Geithner, head of the intragovernmental Committee on Foreign Investment in the United States (CFIUS) that weighs overseas purchases of American assets, to condition the Chinese purchase of Nexen Inc. on the company's payment of royalties on offshore Gulf of Mexico oil and gas leases that remain exempt under a flawed 1995 drilling bill.

Calgary, Alberta-based Nexen, which China National Offshore Oil Co. (CNOOC) hopes to purchase for $15.1 billion, holds at least two leases that have produced 32 million barrels of oil and 34 million cubic feet of natural gas without being subject to U.S. royalties, Markey wrote to Geithner.

"I believe this merger could lead to massive transfer of wealth from the American people to the Chinese government, and I strongly urge you to block this proposed transaction until, at a minimum, parties to the merger agree to pay royalties to the U.S. taxpayer on all oil produced off American shores or relinquish any ownership interests in these leases," the Democratic lawmaker added.

Sen. Charles Schumer (D-N.Y.) issued his own call last week for Geithner to block the Nexen deal unless China committed to a more open foreign investment policy, and Sen. John Hoeven (R-N.D.) told reporters that he also has concerns with the purchase. CFIUS examines overseas business deals that could affect U.S. assets, and lawmakers in both parties urged it to block a CNOOC offer to buy Unocal in 2005 before the Chinese company voluntarily withdrew.

A Treasury Department official said yesterday that information on the committee's deliberations and actions are kept shielded under existing law. "Accordingly, the Department does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review," the official added.

Click here to read Markey's letter to Geithner.