In another unfortunate turn of events for the oil and gas industry, an oil pipeline outside of Chicago has sprung a leak. This pipeline, which is part of the large Lakehead system that is operated by Enbridge Inc., carries 70% of the oil that travels from Canada to the United States, a volume averaging 670,000 barrels per day. The leak was detected today and the pipeline was shut down immediately. The leaking section contained about 17,000 barrels of oil at the time of the breach. Enbridge has begun to excavate the breached section of pipe and vacuum oil from the site. So far, they have collected about 7,000 barrels of a mixture of oil and water. They have also found that the oil has already contaminated a retention pond near the leak.
Enbridge Inc. is not unfamiliar with problems like this. In July, another pipeline from the Lakehead system spilled 20,000 barrels into the Kalamazoo River in Michigan. In 2007, Enbridge had to shut down three pipelines because there was an explosion and a fire on one. This disaster will affect the oil and gas industry heavily. Crude oil prices have already risen 2.2% to $76.45 per barrel in light of this news. This is because investors expect to see the demand for oil remain the same, while stockpiles could decrease as a result of losing a key inflowing pipeline. There are, however, other pipelines in the Chicago area through which Enbridge can send oil.
With the PG&E explosion that Adam wrote about, this Enbridge leak, the BP explosion, and the Mariner Energy explosion that I explained two weeks ago, I am feeling rather frustrated with the energy industry. I considered the general reaction to the BP spill to be quite strong, and I would still stick to that claim. But this event has pushed me beyond my limit. I am now frustrated with the number of problems with the energy industry that seem to have been occurring recently. It is difficult to point to any one source, but as I have said before, I would rather not have avoidable disasters put the oil and gas industry in a bad light. I only hope that Enbridge cleans up quickly and continues shipments. Disruptions like this can make oil prices skyrocket. During the 2007 issue at Enbridge, prices pushed $100 a barrel. This is something that American consumers do not want for obvious reasons.
http://online.wsj.com/article/SB10001424052748704621204575487750674045766.html
I like your analysis. It begs the question when is enough, enough. I wonder if this more than just a random series of unfortunate events or if the BP spill exposed oil production problems that happen in abundance. Indeed, these accidents are bad for the consumer in the short term, but they only prove to us more and more that we need to find alternatives to oil and move on!
ReplyDeleteI also have to agree with you that these oil "incidents" happen too often. It shows that either the Energy companies are not motivating their employees to do the job precisely or that they just want more money for their oil. It is aggravating to think about how careless these companies have been acting recently and how we the consumers have to pay for their actions in negative ways.
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