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Keystone oil leak may have been caused by damage during installation, PHMSA says

Federal regulators suspect that the Keystone oil pipeline's rupture and oil leak were caused by issues introduced when the line was being built.

TransCanada Corp.'s Keystone line released an estimated 210,000 gallons of oil in South Dakota on Nov. 16, and a preliminary investigation indicated that construction damage may be to blame, according to a corrective-action order the U.S. Pipeline and Hazardous Materials Safety Administration issued Nov. 28.

After TransCanada dug up the failed section of line, metallurgists saw that the rupture had occurred at the top of the pipe. "The rupture has characteristics of mechanical damage from original construction," the order said. "Preliminary information indicates the failure may have been caused by mechanical damage to the pipeline and coating associated with a weight installed on the pipeline in 2008. Weights are placed on the pipeline in areas where water could potentially result in buoyancy concerns."

The National Transportation Safety Board will also examine the exhumed piece of pipe.

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Although the company used in-line inspection and cleaning tools at the time of the release, the equipment did not detect oil leaking from the rupture site. PHMSA said it does not suspect that the tools caused the incident.

The roughly 1,080-mile phase-one portion of the Keystone pipeline moves crude oil from Alberta into the Midwest. The coated steel line was built in June 2008 through March 2010, and the site that ruptured was built in 2008.

PHMSA previously gave TransCanada special permission to operate the pipeline at 80% of the pipeline's specified minimum yield strength. Normally, a hazardous liquids-line would operate at 72%. The permit included 51 conditions and had TransCanada monitoring and inspecting the Keystone pipeline more closely than other, similar pipelines.

In light of the incident, the agency imposed stricter pressure restrictions. For these to be lifted, TransCanada has to show that restoring the pipeline to its pre-failure operating pressure is justified "based on a reliable engineering analysis showing that the pressure increase is safe and considering all known defects, anomalies and operating parameters of the Keystone pipeline," the agency order said.

"As part of the approved plans, TransCanada is operating the pipeline at a reduced pressure to ensure a safe and gradual increase in the volume of crude oil moving through the system," the company said on its website. "We are following a strict startup protocol that includes visual checks from land of valve sites and pump stations as well aerial inspections along the pipeline right-of-way."

PHMSA ordered TransCanada to keep the affected 46.8-mile section of pipe shut down and to devise a return-to-service plan that would include repair procedures and a restart protocol.

TransCanada is also to conduct an extensive review of construction records and in-line inspection reports, among other things, and come up with a plan to analyze all available data for any sites along the pipeline that may have been exposed to similar conditions. The company must also do internal pipe inspections with tools designed to detect mechanical damage and cracks.

Other, newer pipelines have been found to be susceptible to failure. A 2015 Pipeline Safety Trust analysis of federal data found that new gas transmission pipelines were failing at a rate on par with those installed before 1940. According to that analysis, gas transmission lines installed in the 2010s had an annual average incident rate of 6.64 per 10,000 miles over the time frame considered, even exceeding that of the pre-1940 pipes. Those installed prior to 1940 or at unknown dates had an incident rate of 6.08 per 10,000 miles.