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Canadian Province Reviews Oil Pipeline Standards After Spill

Saskatchewan will review the engineering standards and other rules for crude oil pipelines following a more than 200,000-liter crude oil spill from a Husky Energy-operated pipeline last summer. The spill, in the North Saskatchewan River, forced two towns to seek alternative water supplies until the spill was contained.

At the time, a government probe concluded that the pipeline had leaked because a buckle had cracked as a result of ground movement. Now, the Saskatchewan authorities plan to strengthen regulations regarding pipelines near water, and as part of this, it will review the designs of existing pipelines.

Meanwhile, Husky Energy reported yet another leak yesterday, this time from a pipeline in Alberta, according to a company spokesman, where 25,000 liters of oil were spilled and are now in the process of being cleaned up.

Such incidents have played a central role in fueling anti-pipeline sentiment in both Canada and the U.S. Although the infrastructure is vital for the energy industry, which supports hundreds of thousands of households in oil-rich Alberta and Saskatchewan, opposition is also strong, prompting lengthy reviews of new pipeline projects.

Late last year, environmental opposition led to the suspension of one Canadian pipeline project, the Northern Gateway, on the grounds of what PM Trudeau said were excessive risks. In acknowledgment of the fact that Canada’s oil production is growing and its pipeline network will soon run out of capacity, he approved two new pipelines in November: Kinder Morgan’s Trans Mountain and Enbridge’s Line 3 overhaul.

South of the border, the situation is pretty much the same, with two projects drawing major attention: Keystone XL and Dakota Access. Both these were suspended by the previous administration, but were given the go-ahead by President Trump shortly after taking office.

Related: OPEC Out Of Moves As Goldman Sachs Expects Another Oil Glut In 2018

Opposition was strong against both projects, but the new administration’s priority list has energy independence as one of the top entries, granting approval for all projects seen as moving it in the right direction. The Dakota Access should start moving oil before the end of this week after receiving final approval from the U.S. Army Corps of Engineers for the construction of a short stretch that became the object of heated controversy. Official White House approval for Keystone XL is expected today.

By Irina Slav for Oilprice.com

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