Tag Archives: ENV

Business

Storm cuts U.S. oil, gas, power output, sending prices higher

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Dec 23 (Reuters) – Frigid cold and blowing winds on Friday knocked out power and cut energy production across the United States, driving up heating and electricity prices as people prepared for holiday celebrations.

Winter Storm Elliott brought sub-freezing temperatures and extreme weather alerts to about two-thirds of the United States, with cold and snow in some areas to linger through the Christmas holiday.

More than 1.5 million homes and businesses lost power, oil refineries in Texas cut gasoline and diesel production on equipment failures, and heating and power prices surged on the losses. Oil and gas output from North Dakota to Texas suffered freeze-ins, cutting supplies.

Some 1.5 million barrels of daily refining capacity along the U.S. Gulf Coast was shut due to the bitterly cold temperatures. The production losses are not expected to last, but they have lifted fuel prices.

Knocked out were TotalEnergies (TTEF.PA), Motiva Enterprises (MOTIV.UL) and Marathon Petroleum (MPC.N) facilities outside Houston. Cold weather also disrupted Exxon Mobil (XOM.N), LyondellBasell (LYB.N) and Valero Energy (VLO.N) plants in Texas that produce gasoline, diesel and jet fuel.

Sempra Infrastructure’s Cameron LNG plant in Louisiana said weather disrupted its production of liquefied natural gas without providing details. Crews at the 12 million tonne-per-year facility were trying to restore output, it said.

Freeze-ins – in which ice crystals halt oil and gas production – this week trimmed production in North Dakota’s oilfields by 300,000 to 350,000 barrels per day, or a third of normal. In Texas’s Permian oilfield, the freeze led to more gas being withdrawn than was injected, said El Paso Natural Gas operator Kinder Morgan Inc. (KMI.N).

U.S. benchmark oil prices on Friday jumped 2.4% to $79.56, and next-day gas in west Texas jumped 22% to around $9 per million British thermal units , the highest since the state’s 2021 deep freeze.

Power prices on Texas’s grid also spiked to $3,700 per megawatt hour, prompting generators to add more power to the grid before prices fell back as thermal and solar supplies came online.

New England’s bulk power supplier said it expected to have enough to supply demand, but elsewhere strong winds led to outages largely in the Southeast and Midwest; North Carolina counted more than 187,000 without power.

“Crews are restoring power but high winds are making repairs challenging at most of the 4,600 outage locations,” Duke Energy spokesman Jeff Brooks wrote on Twitter.

Heating oil and natural gas futures rose sharply in response to the cold. U.S. heating oil futures gained 4.3% while natural gas futures rose 2.5%.

In New England, gas for Friday at the Algonquin hub soared 361% to a near 11-month high of $30 mmBtu.

About half of the power generated in New England comes from gas-fired plants, but on the coldest days, power generators shift to burn more oil. According to grid operator New England ISO, power companies’ generation mix was at 17% from oil-fired plants as of midday Friday.

Gas output dropped about 6.5 billion cubic feet per day (bcfd) over the past four days to a preliminary nine-month low of 92.4 bcfd on Friday as wells froze in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere.

That is the biggest drop in output since the February 2021 freeze knocked out power for millions in Texas.

One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.

Reporting by Erwin Seba and Scott DiSavino; additional reporting by Arathy Somasekhar and Laila Kearney; editing by Jonathan Oatis, Kirsten Donovan, Aurora Ellis and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

Scott Disavino

Thomson Reuters

Covers the North American power and natural gas markets.

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Business

Keystone cleanup turns remote Kansas valley into a small town

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WASHINGTON, Kan., Dec 18 (Reuters) – Farmer Bill Pannbacker got a call earlier this month from a representative from TC Energy Corp , telling him that its Keystone Pipeline, which runs through his farmland in rural Kansas, had suffered an oil leak.

But he was not prepared for what he saw on his land, which he owns with his wife, Chris. Oil had shot out of the pipeline and coated what he estimated was nearly an acre of pasture uphill of the pipe, which is set into a valley.

The grass was blackened with diluent bitumen, one of the thickest of crude oils, which was being transported from Canada to the Gulf of Mexico.

The rupture on Dec. 7 is the third in the last five years for the Keystone Pipeline, and the worst of the three – more than 14,000 barrels of crude has spilled and cleanup is expected to take weeks or months.

TC has not said when repairs could be completed and a 96-mile (155-km) segment of the pipeline will restart. Crews will remain busy on site through the holidays and completion of the cleanup depends on weather and other factors, the Canadian company said in a statement.

“We are committed to restoring the affected areas to their original condition or better.”

BEEHIVE OF WORKERS

Keystone’s two previous spills happened in unincorporated areas in North Dakota and South Dakota. And while the city of Washington, Kansas, is small with just over 1,000 residents, it is surrounded by farms where wheat, corn, soybeans are planted and cattle are raised. The spill in Washington County affected land owned by several people.

The once-quiet valley is currently a construction site buzzing with some 400 contractors, staff from pipeline operator TC Energy, and federal, state and local officials. They are working into the night, leaving a glow from the high-intensity lamps seen from miles away.

Cranes, storage containers, construction equipment and vehicles stretch for more than a half mile from the site of the rupture. The valley has become almost a small town, with several Quonset-style huts erected for workers.

Aerial photos showed a large, blackened swath of land that almost looks like an airborne object is throwing a shadow over the land. Pannbacker said that pasture was used for cattle grazing and calving, but with calving season over, there were no livestock there at the time.

The oil-blackened grass on the land, which is owned by Pannbacker and his sisters as part of a family trust, is now completely gone. It was scraped away and is now confined to a giant mound of dirt that is noticeably darker at the bottom. But oil droplets on plants further up the hill were still visible.

WIDER GROUP AFFECTED

Living in rural Kansas, the Pannbackers are used to preparing for harsh weather, but not an oil spill. Residents have been largely unconcerned despite the accident, even as the area will resemble a work site for the near-future.

“How many people have experienced an oil spill? Who knows what it’s like?” said Chris Pannbacker. “It’s not like a tornado or a natural disaster.”

Kansas State Representative Lisa Moser in a Facebook post said there are 14 landowners who are being compensated for either the spill or the use of their property during cleanup.

TC said it is discussing compensation with landowners but would keep details private. The company said it has stayed in regular contact with landowners. Pannbacker said TC has not yet discussed compensation with them yet.

Pannbacker says he does not expect the grass on the pastureland to return for at least two or three years; there is a well site on the pasture used for the cattle that they will not be using either.

Reporting by Erwin Seba in Washington, Kan.; additional reporting by Rod Nickel; writing by David Gaffen
Editing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

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World

Malaysia landslide kills 12 at campsite, more than 20 missing

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  • Landslide ripped through farm campsite around 3 am
  • Eight injured, at least 50 found safe
  • Almost 400 people involved in search and rescue – police

KUALA LUMPUR, Dec 16 (Reuters) – A landslide killed at least 12 people while they slept at a campsite in Malaysia early on Friday, officials said, as search teams scoured thick mud and downed trees for more than 20 people still missing.

The landslide in Selangor state, on the outskirts of capital, Kuala Lumpur, occurred about 3 a.m. (1900 GMT), tearing down a hillside into an organic farm with camping facilities, the state fire and rescue department said in a statement.

Teh Lynn Xuan, 22, said she was camping with 40 others when the landslide struck. She said one of her brothers died, while another is in the hospital.

“I heard a loud sound like thunder, but it was the rocks falling,” she told Malay-language daily Berita Haria. “We felt the tents becoming unstable and soil was falling around us. Luckily, I was able to leave the tent and go to someplace safer. My mother and I managed to crawl out and save ourselves.”

More than 90 people were caught in the landslide and 59 have been found safe, with 22 still missing, according to the fire and rescue department.

In addition to the 12 dead, eight were hospitalised, it said.

One of those taken to the hospital was pregnant, while others had injuries ranging from minor cuts to a suspected spinal injury, health minister Zaliha Mustafa told a news conference.

District police chief Suffian Abdullah said the dead were all Malaysians and included a child about 5 years old.

Almost 400 people from several agencies had been deployed, with search-and-rescue efforts ongoing, he told a news conference.

The landslide came down from an estimated height of 30 metres (100 ft) above the campsite, and covered an area of about one acre (0.4 hectare), according to the fire and rescue department’s state director.

Footage from local television showed the aftermath of a large landslide through a steep, forested area beside a road, while other images on social media showed rescue workers clambering over thick mud, large trees and other debris.

Reuters Graphics

“I pray that the missing victims can be found safely soon,” Malaysia’s minister of natural resources, environment and climate change, Nik Nazmi Nik Ahmad, tweeted on Friday morning, one of several ministers who were heading to the scene. “The rescue team has been working since early. I’m going down there today.”

The disaster struck about 50km (30 miles) north of Kuala Lumpur in Batang Kali town, just outside the popular hilltop area of Genting Highlands, an area known for its resorts, waterfalls and natural beauty.

News agency Bernama tweeted that all campsites and water recreation areas around Batang Kali had been ordered to close immediately until further notice, citing the minister of home affairs.

Pictures posted on the Father’s Organic Farm Facebook page show a farmhouse in a small valley, with a large area where tents can be set up.

Selangor is the country’s most affluent state and has suffered landslides before, often attributed to forest and land clearance.

The region is in its rainy season but no heavy rain or earthquakes were recorded overnight.

A year ago, about 21,000 people were displaced by flooding from torrential rain in seven states across the country.

Reporting by Rozanna Latiff, Angie Teo, Yantoultra Ngui and Hasnoor Hussein; Writing by Lincoln Feast; Editing by Ed Davies and Gerry Doyle

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World

Biden says U.S. is ‘all in’ on Africa’s future

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WASHINGTON, Dec 14 (Reuters) – President Joe Biden announced an agreement aimed at bolstering trade ties between the United States and Africa on Wednesday after years in which the continent took a back seat to other U.S. priorities as China made inroads with investments and trade.

“The United States is ‘all in’ on Africa’s future,” Biden told African leaders attending a three-day summit in Washington.

Biden’s remarks, and the summit, aim to position the United States as a partner to African countries amid its competition with China, which has sought to expand its influence by funding infrastructure projects on the continent and elsewhere. Chinese trade with Africa is about four times that of the United States, and Beijing has become an important creditor by offering loans with less stringent conditions than Western lenders.

Biden said a new U.S. agreement with the African Continental Free Trade Area will give American companies access to 1.3 billion people and a market valued at $3.4 trillion. He listed companies that had made deals at the summit, including General Electric Co (GE.N) and Cisco Systems Inc (CSCO.O).

“When Africa succeeds, the United States succeeds. Quite frankly, the whole world succeeds as well,” the president said.

Delegations from 49 countries and the African Union, including 45 African national leaders, are attending the three-day summit, which began on Tuesday, the first and is the first of its kind since 2014. Washington has offered $55 billion in support for Africa under the Biden administration for food security, climate change, trade partnerships and other issues.

After his remarks, Biden viewed some of the World Cup semifinal match between Morocco and France with Morocco’s prime minister, Aziz Akhannouch, and other leaders attending the summit, the White House said.

This afternoon, Biden will host leaders facing 2023 elections, including from Gabon and Liberia for a discussion on elections and democratic principles. Then Biden and his wife, Jill, will host African leaders and their spouses at a White House dinner with Vice President Kamala Harris and her husband Doug Emhoff.

The summit is part of a renewed push to boost ties with a continent as China gains influence with trade, investment and lending drives. Beijing has held its own high-level meetings with African leaders every three years for more than two decades.

Some U.S. officials have been reluctant to frame the gathering as a battle for influence. Biden didn’t mention China in his remarks, and Washington has toned down its criticism of Beijing’s lending practices and infrastructure projects.

Biden is expected to announce his support for the African Union’s joining the G20 group of the world’s largest economies as a permanent member during Thursday’s summit events.

U.S. Trade Representative Katherine Tai told African counterparts on Tuesday she wants to improve the continent’s U.S. trade preferences program to boost investment.

Reuters Graphics

“We are not looking for a relationship that is transactional, that’s extractive, that is burdensome, or leaves various countries in a more fragile, poor state after a deal is done,” State Department spokesman Ned Price told reporters on Monday.

[1/7] U.S. President Joe Biden delivers keynote remarks at a U.S.-Africa Business forum at the 2022 U.S.-Africa Leaders Summit in Washington, U.S., December 14, 2022. REUTERS/Kevin Lamarque

On Wednesday, White House national security spokesman John Kirby highlighted the importance of U.S. investments in Africa and helping countries there play a more active role in the global economy.

“It’s a two-way discussion that we want to have with Africa about trade, investment and opportunities for economic growth,” he told reporters.

At an opening trade forum on Wednesday, African leaders called for more investment.

“Instead of exporting commodities, the U.S. should find an opportunity in investing,” Kenyan President William Ruto said. “They have the machinery, they have the know-how, so that they can produce for the African continent in Africa.”

Ruto cited projections that Africa’s agribusiness sector will more than triple to $1 trillion by 2030 and said U.S. capital can help solve the continent’s physical infrastructure deficit to unlock this growth.

CHINA-AFRICA TRADE

According to a Eurasia Group analysis, in 2021 China-Africa trade, at $254 billion, greatly outstripped U.S.-Africa trade, which stood at $64.3 billion. Those figures are up from $12 billion and $21 billion, respectively, in 2002.

Beijing’s lending to Africa has led to Western charges that China has mired African countries in debt.

Beijing’s ambassador to Washington rejected the idea ahead of the summit, citing a report that African countries owe three times more debt to Western institutions, while noting that Chinese-built hospitals, highways, airports and stadiums are “everywhere” in Africa.

China remains the region’s largest bilateral investor, but its new loan commitments to Africa have declined in recent years.

Reuters Graphics Reuters Graphics

It’s not all about economic sway – Washington has been alarmed by China’s efforts to establish a military foothold in Africa, including on the Atlantic coast in Equatorial Guinea.

For their part, many African leaders reject the idea that they need to choose between the United States and China.

“The fact that both countries have different levels of relations with African countries makes them equally important for Africa’s development,” Ethiopia’s U.N. ambassador, Taye Atske Selassie Amde, told Reuters. “However, it should be known each African country has the agency to determine their respective relationship and best interest.”

Additional reporting by David Lawder, Steve Holland and Andrea Shalal in Washington and Michelle Nichols in New York; Editing by Don Durfee, Leslie Adler, Heather Timmons and Jonathan Oatis

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World

Children dying in Somalia as food catastrophe worsens

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  • Famine averted for now but crisis worsening – IPC
  • ‘Children are dying now’ – UNICEF
  • U.N. funding appeal facing $1 bln shortfall

MOGADISHU, Dec 13 (Reuters) – More than 200,000 Somalis are suffering catastrophic food shortages and many are dying of hunger, with that number set to rise to over 700,000 next year, according to an analysis by an alliance of U.N. agencies and aid groups.

The Integrated Food Security Phase Classification (IPC), which sets the global standard for determining the severity of food crises, said its most acute level, “IPC Phase 5 Famine”, had been temporarily averted but things were getting worse.

“They have kept famine outside of the door but nobody knows for how much longer,” said Jens Laerke, spokesperson of the U.N. humanitarian office (OCHA).

“That people are dying from hunger, there’s no doubt about it, but I cannot put a number on it,” he told a news briefing in Geneva after the latest IPC analysis on Somalia came out.

A two-year drought has decimated crops and livestock across Horn of Africa nations, while the price of food imports has soared because of the war in Ukraine.

In Somalia, where 3 million people have been driven from their homes by conflict or drought, the crisis is compounded by a long-running Islamist insurgency that has hampered humanitarian access to some areas.

The IPC had previously warned that areas of Somalia were at risk of reaching famine levels, but the response by humanitarian organisations and local communities had staved that off.

“The underlying crisis however has not improved and even more appalling outcomes are only temporarily averted. Prolonged extreme conditions have resulted in massive population displacement and excess cumulative deaths,” it said.

Somalia’s last famine, in 2011, killed a quarter of a million people, half of them before famine was officially declared.

Fearful of a similar or even worse outcome this time, humanitarian chiefs were quick to say the situation was already catastrophic for many Somalis.

‘STOP WAITING’

“I have sat with women and children who have shown me mounds next to their tent in a displaced camp where they buried their two- and three-year-olds,” said James Elder, spokesperson of the U.N. children’s charity UNICEF, at the Geneva briefing.

“Whilst a famine declaration remains important because the world should be past this, we also do know that children are dying now.”

The IPC Acute Food Insecurity scale has a complex set of technical criteria by which the severity of crises are measured. Its Phase 5 has two levels, Catastrophe and Famine.

The Somalia analysis found that 214,000 people were classified in Catastrophe and that number was expected to rise to 727,000 from April, 2023 as humanitarian funding dropped off.

Catastrophe is summarised on the IPC website as a situation where starvation, death, destitution and extremely critical acute malnutrition levels are evident.

It said famine was projected from April onwards among agropastoral populations in the districts of Baidoa and Burhakaba, in central Somalia, and among displaced populations in Baidoa town and the capital Mogadishu.

The IPC data showed 5.6 million Somalis were classified in Crisis or worse (Phase 3 or above) and that number would rise from April to 8.3 million — about half the country’s population.

The OCHA is appealing for $2.3 billion to respond to the crisis in Somalia, of which it has so far received $1.3 billion, or 55.2%.

David Miliband, head of aid group the International Rescue Committee, said the underfunding of the appeal showed the world was not treating this as an urgent moment.

“The time for action is now in Somalia,” he told Reuters in an interview, adding that what happened in 2011 should serve as a warning. “Stop waiting for the famine declaration,” he said.

Reporting by Abdi Sheikh in Mogadishu, Bhargav Acharya and Alexander Winning in Johannesburg and Sofia Christensen in Dakar and Emma Farge in Geneva; Writing by Estelle Shirbon; Editing by James Macharia Chege and Ed Osmond

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Business

U.S. to reveal scientific milestone on fusion energy

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WASHINGTON, Dec 12 (Reuters) – The U.S. Department of Energy on Tuesday will announce that scientists at a national lab have made a breakthrough on fusion, the process that powers the sun and stars that one day could provide a cheap source of electricity, three sources with knowledge of the matter said.

The scientists at Lawrence Livermore National Laboratory in California have achieved a net energy gain for the first time, in a fusion experiment using lasers, one of the people said.

While the results are a milestone in a scientific quest that has been developing since at least the 1930s, the ratio of energy going into the reaction at Livermore to getting energy out of it needs to be about 100 times bigger to create a process producing commercial amounts of electricity, one of the sources said.

The FT first reported the experiment.

Fusion works when nuclei of two atoms are subjected to extreme heat of 100 million degrees Celsius (180 million Fahrenheit) or higher leading them to fuse into a new larger atom, giving off enormous amounts of energy.

But the process consumes vast amounts of energy and the trick has been to make the process self-sustaining and get more energy out than goes in and to do so continuously instead of for brief moments.

[1/2] Technicians use a service system lift to access the target chamber interior for inspection and maintenance at the National Ignition Facility (NIF), a laser-based inertial confinement fusion research device, at Lawrence Livermore National Laboratory federal research facility in Livermore, California, United States in 2008. Philip Saltonstall/Lawrence Livermore National Laboratory/Handout via REUTERS

If fusion is commercialized, which backers say could happen in a decade or more, it would have additional benefits including the generation of virtually carbon-free electricity which could help in the fight against climate change without the amounts of radioactive nuclear waste produced by today’s fission reactors.

Running an electric power plant off fusion presents tough hurdles however, such as how to contain the heat economically and to keep lasers firing consistently. Other methods of fusion use magnets instead of lasers.

Energy Secretary Jennifer Granholm is slated to hold a media briefing on Tuesday at 10:00 a.m. EST (1500 GMT) on a “major scientific breakthrough.”

The department has no information ahead of the briefing, a spokesperson said.

Lawrence Livermore focuses mainly on national security issues related to nuclear weapons and the fusion experiment could lead to testing safer testing of the nation’s arsenal of such bombs.

But advances at the labs could also help efforts at companies that hope to develop power plants fired by fusion including Commonwealth Fusion Systems, Focused Energy and General Fusion.

Investors including Bill Gates, Jeff Bezos and John Doerr have poured money into companies building fusion. Private industry secured more than $2.8 billion last year, according to the Fusion Industry Association for a total of about $5 billion in recent years.

Reporting by Timothy Gardner; Editing by Philippa Fletcher, Marguerita Choy and Richard Chang

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US

Kansas residents hold their noses as crews mop up massive U.S. oil spill

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WASHINGTON, Kan., Dec 10 (Reuters) – Residents near the site of the worst U.S. oil pipeline leak in a decade took the commotion and smell in stride as cleanup crews labored in near-freezing temperatures, and investigators searched for clues to what caused the spill.

A heavy odor of oil hung in the air as tractor trailers ferried generators, lighting and ground mats to a muddy site on the outskirts of this farming community, where a breach in the Keystone pipeline discovered on Wednesday spewed 14,000 barrels of oil.

Pipeline operator TC Energy (TRP.TO) said on Friday it was evaluating plans to restart the line, which carries 622,000 barrels per day of Canadian oil to U.S. refineries and export hubs.

“We could smell it first thing in the morning; it was bad,” said Washington resident Dana Cecrle, 56. He shrugged off the disruption: “Stuff breaks. Pipelines break, oil trains derail.”

TC Energy did not provide details of the breach or say when a restart on the broken segment could begin. Officials are scheduled on Monday to receive a briefing on the pipeline breach and cleanup, said Washington County’s emergency preparedness coordinator, Randy Hubbard, on Saturday.

OIL FLOWS TO CREEK

Environmental specialists from as far away as Mississippi were helping with the cleanup and federal investigators combed the site to determine what caused the 36-inch (91-cm) pipeline to break.

Washington County, a rural area of about 5,500 people, is about 200 miles (322 km) northwest of Kansas City.

The spill has not threatened the water supply or forced residents to evacuate. Emergency workers installed booms to contain oil that flowed into a creek and that sprayed onto a hillside near a livestock pasture, said Hubbard.

TC Energy aims to restart on Saturday a pipeline segment that sends oil to Illinois, and another portion that brings oil to the major trading hub of Cushing, Oklahoma, on Dec. 20, Bloomberg News reported, citing sources. Reuters has not verified those details.

It was the third spill of several thousand barrels of crude on the 2,687-mile (4,324-km) pipeline since it opened in 2010. A previous Keystone spill had caused the pipeline to remain shut for about two weeks.

“Hell, that’s life,” said 70-year-old Carol Hollingsworth of nearby Hollenberg, Kansas, about the latest spill. “We got to have the oil.”

TC Energy had around 100 workers leading the cleanup and containment efforts, and the U.S. Environmental Protection Agency was providing oversight and monitoring, said Kellen Ashford, an EPA spokesperson.

U.S. regulator Pipeline and Hazardous Materials Administration (PHMSA) said the company shut the pipeline seven minutes after receiving a leak detection alarm.

CRUDE BOTTLENECK

A lengthy shutdown of the pipeline could lead to Canadian crude getting bottlenecked in Alberta, and drive prices at the Hardisty storage hub lower, although price reaction on Friday was muted.

Western Canada Select (WCS), the benchmark Canadian heavy grade, for December delivery last traded at a discount of $27.70 per barrel to the U.S. crude futures benchmark , according to a Calgary-based broker. On Thursday, December WCS traded as low as $33.50 under U.S. crude, before settling at around a $28.45 discount.

“The real impact could come if Keystone faces any (flow) pressure restrictions from PHMSA, even after the pipeline is allowed to resume operations,” said Ryan Saxton, head of oil data at consultants Wood Mackenzie.

Reporting by Erwin Seba in Washington, Kansas, and Nia Williams in Calgary, Alberta;
Additional reporting by Arathy Somasekhar in Houston, Rod Nickel in Winnipeg and Stephanie Kelly in New York
Editing by Gary McWilliams, Stephen Coates and Matthew Lewis

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Business

Oil removal effort for Keystone pipeline spill to extend to next week, U.S. EPA says

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Dec 9 (Reuters) – The effort to remove oil from the largest crude spill in the United States in nearly a decade will extend into next week, the U.S. Environmental Protection Agency said on Friday, making it likely that the Keystone pipeline shutdown will last for several more days.

TC Energy (TRP.TO) shut the largest oil pipeline to the United States from Canada on Wednesday after it leaked 14,000 barrels of oil into a Kansas creek. It said on Friday it is still determining when it will be able to return the line to service.

The outage on the Keystone, which carries 622,000 barrels of Canadian crude per day (bpd) to various parts of the United States, could affect inventories at the key Cushing, Oklahoma, storage hub and cut crude supplies to two oil refining centers, analysts said. Crews in Kansas continued clean-up efforts on Friday from the breach, the cause of which remained unknown.

“We’re beginning to get a better sense of the clean up efforts that will need to be undertaken in the longer-term,” said Kellen Ashford, spokesperson for the EPA Region 7, which includes Kansas.

TC Energy aims to restart on Saturday a pipeline segment that sends oil to Illinois, and another portion that brings oil to Cushing on Dec. 20, Bloomberg News reported, citing sources. Reuters has not verified those details.

This is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010. A previous Keystone spill had caused the pipeline to remain shut for about two weeks.

TC Energy remained on site with around 100 workers leading the clean-up and containment efforts, and the EPA was providing oversight and monitoring, Ashford said. TC is responsible for determining the cause of the leak.

A corrective action order from the U.S. Pipeline and Hazardous Materials Administration (PHMSA) to TC on Thursday said the company shut the pipeline down seven minutes after receiving a leak detection alarm. The affected segment, 36 inches (91 cm) in diameter, was Keystone’s Phase 2 extension to Cushing built in 2011.

Washington County, a rural area of about 5,500 people, is about 200 miles (320 km) northwest of Kansas City.

The oil spill has not threatened the local water supply or forced local residents to evacuate, Washington County Emergency Management Coordinator Randy Hubbard told Reuters. Workers quickly set up a containment area to restrict oil that had spilled into a creek from flowing downstream.

“There is no human consumption drinking water that would come out of this,” Hubbard said.

Livestock producers in the area have been notified and have taken their own corrective measure to protect their animals, he added.

The EPA is the main federal agency that oversees inland oil spills. If the EPA finds TC Energy liable for the spill, the company would be responsible for the cost of cleanup and repairing any harm to the environment, as well as potential civil and criminal penalties.

Pipeline operators are typically held accountable for breaches by the EPA through the Clean Water Act (CWA) and the related Oil Pollution Act, among others, according to Zygmunt Plater, an environmental law professor at Boston College Law School.

Those federal acts restrict the discharge of pollutants such as oil into waterways and hold pipeline operators responsible for the costs associated with containment, cleanup and damages from spills.

CRUDE BOTTLENECK

A lengthy shutdown of the pipeline could also lead to Canadian crude getting bottlenecked in Alberta, and drive prices at the Hardisty storage hub lower, although price reaction on Friday was muted.

Western Canada Select (WCS), the benchmark Canadian heavy grade, for December delivery last traded at a discount of $27.70 per barrel to the U.S crude futures benchmark, according to a Calgary-based broker. On Thursday, December WCS traded as low as $33.50 under U.S. crude, before settling at around a $28.45 discount.

PHMSA has to approve the restart of the line. Even once the pipeline starts operating again, the affected area will have to flow at reduced rates pending PHMSA approval.

“The real impact could come if Keystone faces any pressure restrictions from PHMSA, even after the pipeline is allowed to resume operations,” said Ryan Saxton, head of oil data at Wood Mackenzie.

Additional reporting by Arathy Somasekhar, Rod Nickel, Stephanie Kelly and Clark Mindock; Editing by Marguerita Choy

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Business

Keystone pipeline shut after 14,000-barrel oil spill in Kansas

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Dec 8 (Reuters) – Canada’s TC Energy shut its Keystone pipeline in the United States after more than 14,000 barrels of crude oil spilled into a creek in Kansas, making it one of the largest crude spills in the United States in nearly a decade.

The cause of the leak, which occurred in Kansas about 20 miles (32 km) south of a key junction in Steele City, Nebraska, is unknown. It is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010.

The 622,000 barrel-per-day Keystone line is a critical artery shipping heavy Canadian crude from Alberta to refiners in the U.S. Midwest and the Gulf Coast. It is unclear how long the closure will last.

There have been no effects on drinking water wells or the public, the U.S Environmental Protection Agency said in a statement, though surface water of Mill Creek was affected.

Kellan Ashford, spokesperson for EPA Region 7, which includes Kansas, said the cause of the leak was still unclear on Thursday evening.

TC had mobilised around 100 people to respond to the spill, while the EPA had dispatched two coordinators, Ashford said. Washington County Emergency Management and Kansas’s Department of Health and Safety were also on the scene.

Keystone shut the line at about 8 p.m. CT Wednesday (0200 GMT Thursday) after alarms went off and system pressure dropped, TC (TRP.TO) said in a release. It said booms were being used to contain the spill.

LARGEST ONSHORE SPILL IN YEARS

According to U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) data, this would be the largest crude oil leak since a Tesoro pipeline leaked more than 20,000 barrels of oil in North Dakota in October 2013.

PHMSA is also investigating the leak, which occurred near Washington, Kansas, a town of about 1,000 people.

There have been seven Keystone spills since it became operational in June 2010, according to PHMSA data. The largest were in December 2017, when more than 6,600 barrels spilled in South Dakota, and in November 2019, when more than 4,500 barrels spilled in North Dakota, according to PHMSA figures.

“It is troubling to see so many failures and so much oil spilled from any pipeline, but it is especially troubling from such a relatively new pipeline,” said Bill Caram, executive director of the nonprofit Pipeline Safety Trust, in a statement.

LENGTH OF SHUTDOWN UNCLEAR

TC declared force majeure over the outage, according to a source with direct knowledge, referring to unexpected external circumstances that prevent a party to a contract from meeting its obligations. TC did not respond to a request for comment.

Two Keystone shippers said TC had not yet notified them how long the pipeline may be shut.

Keystone’s shutdown will hamper deliveries of Canadian crude both to the U.S. storage hub in Cushing, Oklahoma and to the Gulf, where it is processed by refiners or exported.

The shutdown is expected to increase the discount on Western Canada Select (WCS) heavy oil from Alberta to U.S. crude , which was already high due to lackluster demand for heavy, sour Canadian oil.

WCS for December delivery traded at $33.50 a barrel below WTI, compared with Wednesday’s settle of $27.50 a barrel below the benchmark, according to one broker.

“It’s really a worst-case scenario if this outage is long-lasting,” said Rory Johnston, founder of energy newsletter Commodity Context, noting that if the price falls further, shippers may opt to move crude by rail.

Steele City is roughly the junction where Keystone splits, with one segment moving crude to Illinois refineries and the other carrying oil south to Oklahoma and the Gulf Coast.

If the spill is located south of the junction, TC may be able to quickly restart the segment to Illinois, RBC analyst Robert Kwan said in a note.

Past shutdowns have generally lasted about two weeks, but this could last longer as it involves a water body, Kwan said.

TC shares ended down 0.1% in Toronto.

Reporting by Arpan Varghese, Brijesh Patel and Deep Vakil in Bengaluru, Rod Nickel, Nia Williams and Arathy Somasekhar; Editing by Josie Kao and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

Rod Nickel

Thomson Reuters

Covers energy, agriculture and politics in Western Canada with the energy transition a key area of focus. Has done short reporting stints in Afghanistan, Pakistan, France and Brazil and covered Hurricane Michael in Florida, Tropical Storm Nate in New Orleans and the 2016 Alberta wildfires and the campaign trails of political leaders during two Canadian election campaigns.

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Business

California offshore wind auction bids top $460 mln on day two

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Dec 7 (Reuters) – The first ever auction of offshore wind development rights off the coast of California entered its second day on Wednesday, with high bids topping $460 million.

The Biden administration’s sale is a major milestone in the its goal to put turbines along every U.S. coastline and a critical test of developer appetite for investment in floating wind turbines, an emerging technology necessary in locations where the ocean floor is too deep for fixed equipment.

The Interior Department’s Bureau of Ocean Energy Management (BOEM) is auctioning five lease areas equal to a combined 373,267 acres (151,056 hectares) off the state’s north and central coasts. Previous federal offshore wind auctions have all been for leases in shallower waters of the Atlantic Ocean.

After 22 rounds of bidding, high bids totaled a combined $462.1 million. Two leases off the central coast had commanded high bids of more than $100 million, with the remaining leases attracting high bids in a range of $62.7 million to $98.8 million, according to live auction results on the BOEM web site.

The identities of the bidders are not disclosed during the auction, but 43 companies had been approved to participate.

They include established offshore wind players like Avangrid Inc (AGR.N), Orsted (ORSTED.CO) and Equinor (EQNR.OL), which are all developing projects on the U.S. East Coast, as well as potential new entrants including Swedish floating wind developer Hexicon (HEXI.ST) and Macquarie (MQG.AX) unit Corio.

Reporting by Nichola Groom; Editing by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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