The Keystone oil portfolio closed on Tuesday morning after it broke in North Dakota, stopping the flow of millions of gallons of crude oil from Canada to refineries in the United States and potentially driving at higher gasoline prices in the United States.
South Bow, a liquid pipe business, said it closed the pipe after the leak detection systems of the control center detected a pressure drop in the system. The spill is limited to an agricultural field in a rural area, about 100 kilometers to the southwest
of Fargo.
“The affected segment has been isolated, and the operations and containment resources have mobilized the site,” said the company. “Our main approach at this time is the safety of personnel on the site and mitigating the risk for the environment.”
The pipeline transported an average of 624,000 barrels per day in 2024, according to the Canada Energy Regulator. It extends to 4,327 kilometers from Hardisty, high., Until Texas.
The impact on Canadian oil producers will depend on how much the interruption lasts, said Randy Ollenberger, head of oil and gas research in BMO Market Capital.
“At this point, it really has a minimum impact on heavy oil prices,” he said.
Hardisty storage tanks, southeast of Edmonton, have a lot of plenty of space, and the oil can be diverted there until Keystone works again. The inventories had been demolished prevently ahead of possible US tariffs, said Ollenberger.
“As long as we don’t have Keystone down so much time that storage tanks begin to fill up to capacity, it may not have much
Impact on the market “.
Gas pump prices could increase in the United States
The closure of the pipe could quickly lead to higher gasoline prices in the west, said Ramanan Krishnamorti, vice president of energy and innovation at the University of Houston.
It will increase prices in the pump probably within one or two days, but it will have a greater impact on diesel and aircraft fuel, said Krishnamorti. The Keystone pipe transports a large amount of a unique and heavy crude that is only available in limited sources, he said.
“The refineries work with raw mixtures so that they can obtain the line of products they want to deliver, be it gasoline, diesel, fuel for airplanes, etc., and not have the supply of heavy crude oil will incline their ability to make diesel and fuel for airplanes,” he said.
“They will make less than diesel and fuel for airplanes when they have less heavy crude.”
The highest diesel costs could lead to grocery price increases because diesel trucks transport these products, he said.
The main oil analyst of the gasoline price tracker, Gasbuddy, Patrick de Haan, said the refineries generally have at least a few days of crude oil supply that will help isolate them from immediate closure impacts. But if the pipe is closed for more than a few days or a week, it could be problematic.
He said that some refineries in the region of the Great Lakes are also attended by other pipes administered by Enbridge.
The pipeline closed within two minutes of an ‘explosion’
It was not clear what caused the rupture of the underground pipe or the amount of crude oil released to the field. An employee who worked on the site near Fort Ransom listened to a “mechanical explosion” and closed the pipe in approximately two minutes, said Bill Suess, manager of the spill research program of the North Dakota Environmental Quality Department.
The oil appeared about 270 meters south of a pumping station in a field and the emergency staff replied, Suess said.
No people or structures were affected, he said. A nearby current that only flows during the year was not affected, but was blocked and wasolated as a precaution, he said. The pipes and the administration of hazardous materials are sending a team to investigate the cause of the leak.
Fort Ransom, a community of less than 100 people, is located in a mountainous and wooded area in southeast of North Dakota known for the scenic views and outdoor recreation. A state park and hiking are close.
It is not clear at what speed the 80 -centimeter pipe flowed, but even after two minutes “it will have a good
Volume, “said Suess.” But … we have had many, much larger spills “, including one that involves the same pipe a few years ago in Walsh County, ND, he said.
“I don’t think it’s so big,” said Suess.
The pipe has a history of past ruptures
The Keystone pipe was built in 2010 at a cost of $ 5.2 billion and transports crude oil through Saskatchewan and Manitoba through North Dakota, South Dakota, Nebraska, Kansas and Missouri to refineries in Illinois, Oklahoma and Texas. Although the pipe was built by TC Energy, it is now managed by South Bow from 2024.
An extension proposed to the pipe called Keystone XL would have transported crude oil to refineries on the Gulf coast, but was finally abandoned by the company in 2021 after years of protests of environmental activists and indigenous communities for environmental concerns.
After a spill, the Pelleine and Dangerous Materials Security Administration is responsible for investigating the root cause of the problem and any lack of compliance. The agency, which regulates liquid and natural gas pipes, lost several higher level executives at the beginning of this year as part of the federal cuts of President Donald Trump.
PHMSA did not immediately respond to a request for comments.
Bill Caram, executive director of the Industry Watchdog Ppeline Safety Trust, said the organization was already “an insufficient agency and with insufficient funds.”
“Losing anyone will have an impact on security,” he said.
After the last spill of Keystone pipes in Kansas in December 2022, the pipe sections were offline for a little
More than three weeks before they resume operating at a lower pressure.
That spill of almost 13,000 barrels of oil flowed to a stream that crossed a grass. An engineering consulting firm said that the curve in the pipe on the site had been “exaggerated” since it was installed in 2010, probably due to the construction activity that altered the earth around the pipe. Tc Energy said that a defective welding in the line curve caused a crack that exacerbated over time.
The pipeline security trust said that this last filtration adds to the problematic history of the Keystone pipe, which has had 13 significant incidents in the 15 years it has been operating.
