Lawmakers demand answers from Keystone operator after largest oil spill in pipeline's history

As TC Energy works to fully restart its 591,000 b/d Keystone Pipeline System after a spill discovered late Dec. 7 forced it to shut down, the operator is also facing questions from lawmakers demanding accountability and assurances on remediation and spill prevention plans.

The latest leak on Keystone, which primarily carries heavy Canadian crude oil to the US Midwest and Gulf Coast, spilled about 14,000 barrels of crude in Washington County, Kansas, making it the largest of Keystone's 22 previous accidents and the biggest onshore US spill in more than 10 years.

The US Government Accountability Office last year noted that Keystone's accident history was similar to other crude oil pipelines, but the severity of spills had worsened in recent years. Most of the 22 accidents on the pipeline from 2010 through 2020 released less than 50 barrels of oil, but Keystone leaked 4,515 barrels near Edinburg, North Dakota, in October 2019 and spewed 6,592 barrels near Amherst, South Dakota, in November 2017, both of which forced the line to shut for more than 10 days.

"Enough is enough," Senator Ed Markey, Democrat-Massachusetts, said in a Dec. 15 letter to TC Energy President and CEO François Poirier. "Communities threatened by your pipeline urgently need an explanation of how and why these spills keep happening, and whether your company will continue to put people nationwide and our environment at risk."

A similar letter was sent to Poirier Dec. 20 from House Energy and Commerce Committee Chairman Frank Pallone, Democrat-New Jersey.

"In addition to damaging property and polluting a local waterway, the incident hurt American companies and consumers by increasing the price of crude oil during intraday trading," Pallone said.

Noting that the spill was not an isolated incident and that Keystone's safety record compared unfavorably to its peers, Pallone said he had "significant concerns about TC Energy's ability to safely operate its pipeline network."

Outage continues

Keystone travels south from Alberta and splits at Steele City, Nebraska, where one segment travels east to Patoka, Illinois, and the other segment continues south to Cushing, Oklahoma, and on to Texas.

The segment to Illinois was restarted Dec. 14, but the segment extending south remains offline as the leak investigation and repairs continue.

TC Energy said Dec. 19 that it does not yet have a firm restart date for the ongoing outage and recovery rates have the potential to slow due to severe weather. That restart will require approval from the US Pipeline and Hazardous Materials Safety Administration.

Keystone throughput averaged 600,000 b/d in 2022 and reached nearly 640,000 b/d in September, according to data from S&P Global Commodity Insights.

The Department of Energy Dec. 16 announced an emergency exchange from the Strategic Petroleum Reserve of roughly 2 million barrels to meet refinery supply needs, in response to Keystone's continued partial shutdown.

Information requests

Pallone asked TC Energy to provide by Jan. 3 "a formal plan for preventing further oil spills and for remediating the significant damage caused by this most recent incident." That plan, he said, should "address the root cause of this most recent oil spill and the systemic issues that continue to plague the Keystone Pipeline."

Keystone is authorized to operate at a higher stress level than other hazardous liquids lines through a special permit from PHMSA. As such, Keystone runs with a thinner steel pipe at higher stresses, a move that TC Energy contended would cut steel costs by 10%.

Markey suggested that the higher operating stress level could be a contributing factor to the pipeline's numerous ruptures as it "could accelerate a pipeline's failure, precipitating a spill before completion of scheduled in-line inspections."

Markey's letter asks TC Energy whether the higher stress level was a factor in its three largest spills or had any effect on the ruptures and the amount of oil released during the 2017, 2019 and most recent leaks. He also pressed for information on how much money the design change actually saved the pipeline operator.

Those and a host of other questions pitched in his letter are aimed at helping him to "understand how and why these Keystone pipeline spills keep happening and what Congress can do to prevent them," he said.

List of responses requested by Jan. 4

The questions, for which Markey requested responses by Jan. 4, seek an update on the latest oil spill, whether the pipeline was operating in compliance with industry best practices, how often inspections occurred, total expenses incurred for cleanup and repair operations expenses from previous spills, the value of company losses reported to the Federal Energy Regulatory Commission that oil spills caused, and whether it was recovering spill response costs from its shippers and insurers.

Markey also asked TC Energy to estimate its costs for cleanup, repair and restoration operations related to the latest spill, what support the operator is providing local landowners and communities affected by the spill and cleanup operations, and whether any compensation agreements have or will be entered into with local landowners for harm or damage caused by the latest spill.