TransCanada shuts down Keystone pipeline after oil spill in South Dakota

CALGARY -- TransCanada said Monday it has shut down its Keystone pipeline because of an oil spill in South Dakota, drawing fresh criticism about the risks pipelines pose.

Mark Cooper, a spokesman for TransCanada, said a local landowner noticed signs of an oil spill around noon local time Saturday and informed the company.

The pipeline, which carries about 500,000 barrels of oil a day, was shut down in minutes, Cooper said.

"As soon as we got that report in we immediately began efforts to shut down the pipeline and crews were immediately dispatched to the site," Cooper said.

Greenpeace campaigner Keith Stewart said it was worrisome that it was a landowner -- and not TransCanada's spill detection system -- that noticed the spill.

"The company has been making big claims at the Energy East Pipeline hearings in Quebec about how their spill detection system will identify a leak within minutes, but the truth is that most pipeline spills aren't detected until the oil makes it way to the surface where it can be seen and smelt," said Stewart in an email.

Cooper said it's still too early to say what caused the leak but the company is investigating.

He said it was difficult to determine precisely how much oil was spilled, but the overall footprint of the visible oil covers about 3 metres by 10 metres, with no significant impact to the environment observed.

The spill was found about six kilometres from TransCanada's Freeman pump station, which sits roughly 60 km southwest of Sioux Falls, S.D.

The company said it has notified landowners and local agencies in the area as well as regulatory agencies including the National Response Center and the Pipeline and Hazardous Materials Safety Administration.

The Keystone pipeline, which opened in 2010, carries oil from Hardisty, Alta., east through to Manitoba before it turns south to markets in the American Midwest and U.S. Gulf Coast.

TransCanada said it has notified customers that the pipeline running from Hardisty to Cushing, Okla., and to terminals in Illinois would remain shut until at least Friday, while the Gulf Coast extension of the pipeline remains active.

The incident comes as TransCanada continues to push forward its proposed 4,600-kilometre Energy East Pipeline that would ship Alberta crude to New Brunswick.

The company hit a major setback in its pipeline expansion plans when U.S. President Barack Obama rejected its proposed Keystone XL pipeline last November.

Environmental groups had opposed the pipeline, which would have run from Hardisty to Nebraska, both because it would allow increased exports of oilsands crude and because of potential spills.

Anthony Swift at U.S.-based Natural Resources Defense Council said the spill reinforces the need for the Obama administration to require a thorough environmental review for Enbridge's Alberta Clipper line and other efforts to expand the Midwest pipeline system.

"This weekend's Keystone oil spill is the latest stark reminder that all too often with pipelines it's not whether they will leak but when," said Swift in a statement.