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TransCanada could lose state permit after investigation of Keystone pipe leak

TransCanada Corp. could lose a state permit after a leak in South Dakota on a section of its Keystone oil pipeline.

TransCanada has begun preliminary work to remove the damaged section of the pipeline after recovering 44,730 gallons of oil as of Nov. 24 during ongoing cleanup and remediation efforts. The excavated pipe will be inspected on site by TransCanada and the Pipeline and Hazardous Materials Safety Administration, after which it will be sent to Washington, D.C., for further examination by the National Transportation Safety Board's Metallurgical Laboratory, TransCanada said in a Nov. 24 update.

Reuters reported that South Dakota could revoke TransCanada's operating permit if the investigation of the spill shows the company violated the terms of its license.

TransCanada has continued with air quality monitoring and well water testing, finding no issues or suspected risks to water supply, the company said. Cleanup is being conducted by about 170 personnel.

TransCanada shuttered the pipeline on Nov. 16 as an emergency response to the leak near the Ludden pump station in Marshall County, S.D. The leak was said to have released about 5,000 barrels of oil. After significant delays, the Keystone XL project, which would connect to the Keystone pipeline, received the final approval it needed from the Nebraska Public Service Commission on Nov. 20.

A Reuters review of documents showed that the Keystone pipeline leaked more volumes and more often in the U.S. than TransCanada's risk assessments indicated. Reuters reported Nov. 27 that the pipeline, which runs from Hardisty, Alberta, to hubs in Oklahoma and Illinois, has spilled oil three times since 2010: the recent South Dakota leak and two others that released about 400 barrels each in 2011 and 2016. TransCanada had estimated the chance of a leak of more than 50 barrels to be no more than once every seven to 11 years, according to a risk assessment submitted to regulators before the project started up in 2010.