PIPELINES

Do increasing oil flows open door to more spills?

HOUSTON -- Drillers are clamoring for more pipelines as crude oil production climbs, in the hope they can find some relief from truck and rail transportation that has increased costs in the North American oil patch.

To meet that demand, pipeline companies are boosting the capacity and flow on their pipeline systems, often by hundreds of thousands of extra barrels a day. Enbridge Inc. plans to expand oil flows through pipelines that feed Midwestern refineries by 280,000 barrels per day, and capacity is set to increase on pipelines operated by Kinder Morgan Inc. and Plains All American Pipeline LP.

But does adding more crude oil to a pipeline increase the risk of a rupture or spill?

Industry trade groups say no. Meanwhile, U.S. government regulators say they simply don't know, and environmental groups wary of expansion projects like TransCanada's Keystone XL have yet to weigh in on whether greater capacity means a greater chance of oil spills.

Kinder Morgan officials declined to comment, and officials at Enbridge did not respond to a request for information. But the Association of Oil Pipelines (AOPL) and the Canadian Energy Pipeline Association (CEPA), two trade groups that represent the industry's interests, say adding tens or hundreds of thousands of extra barrels to a pipeline does not necessarily raise the likelihood of a spill.

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"I think it's the right question to ask, but I've never heard any suggestion that capacity increases increase the risk," said AOPL President Andrew Black.

The reason, Black said, is that regulations enforced by the Department of Transportation's Pipeline and Hazardous Materials Safety Administration rule out any chance that capacity expansions alone increase the likelihood of a spill. The regulations focus on the pressure limits that a pipeline can withstand. As long as capacity increases do not exceed those limits, companies are free to boost the flow on that line, he said.

"The pipeline operators have to follow PHMSA rules about the operating pressure that they can operate at, and that operating pressure is a function of the pipe, not the volume," Black explained. "So anybody who wants to increase capacity for commercial reasons still has to comply with the same rules about the maximum operating pressure."

A pipeline operator needs a special PHMSA permit if it wants to exceed its pressure limit. Information on PHMSA's website indicates that no pipeline company operating in the United States has asked for a permit to boost pressure in recent years. The same goes for pipelines north of the border, according to Canada's pipeline trade group.

"As part of their operational requirements, pipeline companies follow specific operating pressures as dictated by regulatory requirements that their specific pipeline asset falls under," said CEPA spokesman Philippe Reicher. "If you are seeing companies increasing throughput, they must be doing it under those constraints."

Enbridge's plan to add 280,000 more barrels per day to carry crude oil out of North Dakota, which the company says could be revised upward, is just the latest in a string of projects to move more oil through the existing North America pipeline network.

Last year, Plains All American announced a 50,000-barrel-a-day capacity expansion on a segment of pipeline running from west Texas's Permian Basin oil field to storage terminals in Cushing, Okla. That project was slated to be completed earlier this year.

U.S. regulators lack data

Kinder Morgan officials announced even more dramatic capacity expansion plans in April. It wants to increase flow on its Trans Mountain pipeline network in Canada from 300,000 barrels of oil a day to 850,000 barrels a day. Ian Anderson, president of Kinder Morgan Canada, said in the announcement that binding commitments reached with oil producers to use the extra capacity illustrate "the market's enthusiasm for expanding market access for Canadian crude by expanding an existing system."

Capacity enhancements are usually made by adding pumping stations to a pipeline system. Still, Black at AOPL said more pumping capacity does not by itself increase pressure on a line. He said that helps explain why no special permits have been issued to companies conducting these expansion projects.

Despite the industry's assurances about spill potential, U.S. regulators say they simply do not have information to back that up. Yet PHSMA officials stick to the view that the threat of a spill does not increase if operators adhere to pressure limits and inspect and maintain lines as they are required.

"We just don't have the data that can support or deny whether or not that is actually the case," said Department of Transportation public affairs officer Damon Hill. "We just don't collect that information."

For the most part, environmental groups opposed to capacity expansions on existing pipelines are fighting projects for an assortment of reasons unrelated to concerns about added spill risk from greater volumes alone.

Beth Wallace, a representative in Michigan for the National Wildlife Federation (NWF), says her group opposes Enbridge's Midwest expansion plans because of the product it will carry: Canadian oil sands crude.

Wallace told EnergyWire that she is less concerned with the added pumping capacity and more concerned that a more caustic, heavier grade of crude will eat away at aging pipes, leading to incidents such as the 2010 pipeline spill that sent more than 1 million gallons of oil into the Kalamazoo River in Michigan.

That cleanup is still ongoing, made complicated by the heavier bitumen-based crude the pipeline was carrying, she noted. "The concern that we have is not so much with the increased horsepower but with the product that they're pushing through the lines and the age of the lines," Wallace said. "It's unknown as to how that product really reacts in the line."

Further, she complained that the expansion project has been given a green light to proceed before the completion of a study on the impact of oil sands crude on pipeline integrity. NWF fears that allowing greater volumes of oil sands-derived crude to flow through the lines increases the chances of a repeat of the Kalamazoo River spill, now approaching its second anniversary.

Authorities in Alberta are still contending with a spill from a Plains Midstream Canada that sent up to 3,000 barrels of oil into a river near the town of Sundre. Reicher at CEPA said the cause of that spill was still unknown as the company and regulators focus instead on containing and cleaning up the spilled oil.

In the United States, according to PHMSA, there have been 132 reported incidents this year involving liquid pipelines, spilling just under 14,000 barrels. Most of those spills are caused by third-party damage, industry and regulators say, which often means people damaging pipelines during digging and construction.

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