Bloomberg News

Exxon Developing Excavation Plan for Pipeline Spill in Arkansas

April 01, 2013

Exxon Mobil Corp. (XOM:US) is developing an excavation and removal plan for a damaged section of its 96,000- barrel-a-day Pegasus crude pipeline, which was shut after a leak was discovered in Arkansas on March 29.

The company said it collected about 12,000 barrels of oil and water from the spill, classified as major by the U.S. Environmental Protection Agency, according to a statement from the Mayflower Incident Unified Command Joint Information Center. Local officials recommended 22 homes closest to the leak remain evacuated.

“We didn’t really update it much beyond yesterday, so we’re using 12,000 (barrels of oil and water mixture), hopefully we can get a newer number tomorrow,” said Charlie Engelmann, a spokesman for Exxon, by phone. “We’ve been continuing our cleanup efforts, without a question.” Engelmann said he couldn’t speculate on timing for repairs to the line.

The line shutdown may limit flow of crude from western Canada and the U.S. Midwest, exacerbating a glut of oil in the area. Domestic benchmark West Texas Intermediate weakened $1.22 today to $14.01 a barrel against Brent, the international marker, from $12.79 on March 28, the smallest gap since July.

The 20-inch Pegasus line runs 940 miles (1,512 kilometers) from Patoka, Illinois, to Nederland, Texas, and serves refineries around Port Arthur and Beaumont, close to the Louisiana line. There are four plants near the city able to process about 1.4 million barrels a day of crude, according to data compiled by Bloomberg. The sites are operated by Exxon, Valero Energy Corp., Total SA and Motiva Enterprises LLC.

Heavy Crude

The line was carrying Wabasca Heavy Crude from western Canada at the time of the incident, Kimberly Brasington, an Exxon spokeswoman, said yesterday. Wabasca Heavy is a blend of heavy oil produced in Alberta by Cenovus Energy, Canadian Natural Resources and other companies that typically has about 4.15 percent sulfur and a 19-20 API gravity, according to Crude Quality Inc.

Western Canada Select, a blend of heavy bitumen and diluent that serves as a benchmark for Alberta tar sands formations, slipped 65 cents a barrel to trade at a $15 discount to WTI at 4:57 p.m. New York time, according to data from Calgary energy broker Net Energy.

Exxon didn’t offer a timeline for repairs to the line. The rupture has been located and Exxon is awaiting regulatory approval from the Department of Transportation to begin excavation work and repairs, Alan Jeffers, a spokesman for the company, said by phone yesterday.

Oiled Ducks

About 54 claims have been made, according to the joint statement, and 10 ducks with oil on them have been recovered for treatment, the statement showed. Two other ducks were found dead.

A major spill in Michigan in July 2010 shut an Enbridge Inc. crude pipeline for two months, and the cleanup still isn’t complete. The U.S. Environmental Protection Agency last month directed Enbridge to perform more dredging in Michigan’s Kalamazoo River as part of a cleanup from a July 2010 rupture of a 30-inch pipeline that also carried heavy crude.

Exxon was fined $26,200 in 2010 by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration for failing to regularly inspect each point where the Pegasus line crosses under a navigable waterway. PHMSA specifically cited the line’s crossing under the Mississippi River between Missouri and Illinois.

The Arkansas spill was estimated at a few thousand barrels, according to a statement yesterday from the Mayflower Unified Command Center, which includes Exxon, Faulkner County and the city of Mayflower, Arkansas, said in a statement yesterday. Exxon hasn’t stated the size of the spill.

Fifteen vacuum trucks and 33 storage tanks had been deployed to the site of the spill to aid clean up efforts, according to the Unified Command. Exxon has sent 120 workers in response, and crews were steam-cleaning oil from property today, according to the joint statement.

No oil had reached nearby Lake Conway, and cleanup crews have deployed 3,600 feet of boom as a precaution, the command said.

To contact the reporters on this story: Eliot Caroom in New York at ecaroom@bloomberg.net; Naureen S. Malik in New York at nmalik28@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net


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  • XOM
    (Exxon Mobil Corp)
    • $97.12 USD
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