Pipelines blow up - expect rising gas prices
11-29-07, 11:33 AM
#1
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Pipelines blow up - expect rising gas prices
U.S. readies emergency oil after Enbridge pipe blast
1 hour, 26 minutes ago
The government may tap emergency oil reserves to offset Canadian imports lost after a deadly Minnesota pipeline explosion briefly choked off more than 10 percent of foreign supplies to the world's top consumer.
Enbridge Inc (ENB.TO)(EEP.N) restarted two of the four pipelines on the system linking Ontario to the Central United States on Thursday, with the biggest line expected back up later in the day and the last line seen back up in two to three days.
But throughput at the 1.5 million-barrel-per-day (bpd) Enbridge pipeline system will likely be reduced for weeks as the Department of Transportation investigates the Wednesday blast in Clearbrook, Minnesota, which killed two workers.
U.S. oil surged more than $2 a barrel as Midwest refiners scrambled to find alternate supplies on concerns about a prolonged crimp in Canadian crude flows.
The Department of Energy said it was contacting refiners in the region to see if they needed oil from the emergency stockpile, which could force companies to throttle back runs when they traditionally would be bolstering heating oil inventories ahead of winter.
"Crude oil from the nation's Strategic Petroleum Reserve is available to alleviate a severe supply disruption and remains available if necessary," a Department of Energy spokeswoman told Reuters.
The U.S. Homeland Security Department said there were no known links to terrorism in the fire, which was extinguished on Thursday, allowing two of the four Enbridge pipelines to be restarted.
The nearly 700,000 bpd line 4 and the 450,000 bpd line 3, which had been shut earlier to inspect a leak, were still offline early on Thursday.
"We know a crew was working on the pipeline when this happened. There was a leak. The oil that came from the leak found an ignition source and there was a fire. Unfortunately, we lost two employees," said Enbridge spokesman Larry Springer.
"On line 4, the one right next to the pipeline that caught fire, we'll need to determine if there was any damage and if it needs repairs before it is restarted."
Canada is the top supplier of U.S. imported crude, with the Enbridge line shipping around 1.1 million bpd of oil to the U.S. midcontinent region.
"The timing is pretty bad. We are coming to the strongest demand period for crude with the approach of the Northern winter," said Mark Pervan, senior commodities analyst at ANZ Bank.
Enbridge will likely have to cut the space available to shippers on the system, which has already suffered several accidents this year, if the Department of Transportation investigation drags on.
"I can definitely say the pipeline will operate at a reduced rate of pressure until we can figure out what caused the accident," said Damon Hill, a spokesman for the U.S. Department of Transportation.
Capacity on the pipeline is growing tight due to rising oil production in Alberta and Enbridge has been working to expand the pipeline.
(Reporting by Tom Doggett in Washington, Erwin Seba in Houston, Jeffrey Jones in Calgary, and Robert Campbell, Richard Valdmanis, Rebekah Kebede, Janet McGurty and Matthew Robinson in New York, editing by Matthew Lewis)
http://news.yahoo.com/s/nm/20071129/...dge_fire_dc_15
1 hour, 26 minutes ago
The government may tap emergency oil reserves to offset Canadian imports lost after a deadly Minnesota pipeline explosion briefly choked off more than 10 percent of foreign supplies to the world's top consumer.
Enbridge Inc (ENB.TO)(EEP.N) restarted two of the four pipelines on the system linking Ontario to the Central United States on Thursday, with the biggest line expected back up later in the day and the last line seen back up in two to three days.
But throughput at the 1.5 million-barrel-per-day (bpd) Enbridge pipeline system will likely be reduced for weeks as the Department of Transportation investigates the Wednesday blast in Clearbrook, Minnesota, which killed two workers.
U.S. oil surged more than $2 a barrel as Midwest refiners scrambled to find alternate supplies on concerns about a prolonged crimp in Canadian crude flows.
The Department of Energy said it was contacting refiners in the region to see if they needed oil from the emergency stockpile, which could force companies to throttle back runs when they traditionally would be bolstering heating oil inventories ahead of winter.
"Crude oil from the nation's Strategic Petroleum Reserve is available to alleviate a severe supply disruption and remains available if necessary," a Department of Energy spokeswoman told Reuters.
The U.S. Homeland Security Department said there were no known links to terrorism in the fire, which was extinguished on Thursday, allowing two of the four Enbridge pipelines to be restarted.
The nearly 700,000 bpd line 4 and the 450,000 bpd line 3, which had been shut earlier to inspect a leak, were still offline early on Thursday.
"We know a crew was working on the pipeline when this happened. There was a leak. The oil that came from the leak found an ignition source and there was a fire. Unfortunately, we lost two employees," said Enbridge spokesman Larry Springer.
"On line 4, the one right next to the pipeline that caught fire, we'll need to determine if there was any damage and if it needs repairs before it is restarted."
Canada is the top supplier of U.S. imported crude, with the Enbridge line shipping around 1.1 million bpd of oil to the U.S. midcontinent region.
"The timing is pretty bad. We are coming to the strongest demand period for crude with the approach of the Northern winter," said Mark Pervan, senior commodities analyst at ANZ Bank.
Enbridge will likely have to cut the space available to shippers on the system, which has already suffered several accidents this year, if the Department of Transportation investigation drags on.
"I can definitely say the pipeline will operate at a reduced rate of pressure until we can figure out what caused the accident," said Damon Hill, a spokesman for the U.S. Department of Transportation.
Capacity on the pipeline is growing tight due to rising oil production in Alberta and Enbridge has been working to expand the pipeline.
(Reporting by Tom Doggett in Washington, Erwin Seba in Houston, Jeffrey Jones in Calgary, and Robert Campbell, Richard Valdmanis, Rebekah Kebede, Janet McGurty and Matthew Robinson in New York, editing by Matthew Lewis)
http://news.yahoo.com/s/nm/20071129/...dge_fire_dc_15
11-29-07, 01:02 PM
#3
Lexus Fanatic
Over and above the oil loss....a real shame two employees died.
My condolences go out to their friends and loved ones, whoever they are.
But back to the decision at hand. I'm not sure it is a wise decision to dig into the nation's important SPR (Strategic Petroleum Reserve) just because gas is $3-4 a gallon. That oil reserve is there for a true national emergency, a major disruption of supplies, and truly wild price swings, like more or less what happened with Hurriane Katrina. I'm not sure what happened at this level justifies it.
I'm also not sure DHS has it right when they said there was no link to terrorism. Just a couple of days ago, Saudi authorites nabbed a ring of terroists that were planning a major strike on Western oil supplies. Perhaps the entire ring was not caught. It's possible the terrorists started to destroy the pipe, could not do so completely because of imminent detection, and hightailed it out of there after just causing a leak. Not definite, of course, but certainly possible, given what just happened in Saudi Arabia.
(And, BTW, bit..........wouldn't this thread be better suited for CLUBHOUSE than CAR CHAT?)
My condolences go out to their friends and loved ones, whoever they are.
But back to the decision at hand. I'm not sure it is a wise decision to dig into the nation's important SPR (Strategic Petroleum Reserve) just because gas is $3-4 a gallon. That oil reserve is there for a true national emergency, a major disruption of supplies, and truly wild price swings, like more or less what happened with Hurriane Katrina. I'm not sure what happened at this level justifies it.
I'm also not sure DHS has it right when they said there was no link to terrorism. Just a couple of days ago, Saudi authorites nabbed a ring of terroists that were planning a major strike on Western oil supplies. Perhaps the entire ring was not caught. It's possible the terrorists started to destroy the pipe, could not do so completely because of imminent detection, and hightailed it out of there after just causing a leak. Not definite, of course, but certainly possible, given what just happened in Saudi Arabia.
(And, BTW, bit..........wouldn't this thread be better suited for CLUBHOUSE than CAR CHAT?)
Last edited by mmarshall; 11-29-07 at 01:11 PM.
11-29-07, 01:18 PM
#4
its going to be back up in a matter of days dunno what people are having a cow over. Our oil supply isnt that razor thin with demand that 1.5 million barrels loss per day for 3-4 days is going to kill us, hell 2 of the lines are already back up, just an excuse for someone to jack up prices for a few days. Sensationalism at its best
Last edited by 4TehNguyen; 11-29-07 at 01:23 PM.
11-29-07, 06:51 PM
#5
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Just another excuse for the oil companies to up the prices again. They use anything in their favor to make more profit, without looking like thieves.
Sure, they could probably raise it a few cents to cover the losses, but they probably will raise it twice to three times more of what they would need to cover the loss.
.
Sure, they could probably raise it a few cents to cover the losses, but they probably will raise it twice to three times more of what they would need to cover the loss.
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11-29-07, 08:03 PM
#8
Lexus Fanatic
And those same people also fight new drilling.
11-29-07, 08:10 PM
#10
Lexus Test Driver
11-29-07, 08:51 PM
#11
Lexus Fanatic
True, but it will help keep the supply of gas, diesel fuel, and home heating oil up......and the prices down...........until we can start to convert to other, alternate fuels. For instance, we have some high-mileage hybrids, diesels, electrics, and propane/natural gas cars now, and in the next few years we will start to convert to hydrogen fuel-cell cars.
11-29-07, 08:59 PM
#12
Lexus Fanatic
The main problem is not oil companies; it is, in some ways, not even OPEC any more. It is the oil hype-speculators that constantly bid the price up and down, based on both real and imaginary reasons. They actually have more power than the oil companies. They go nuts on the price bidding, often for frivolous reasons.
which in turns funds terrorism. does that make me an accomplice?
11-29-07, 09:04 PM
#14
Lexus Fanatic
No. Arab countries make money from oil. Terrorists want to destroy the world oil trade and supplies. Arab governments, in general, are not going to hand over dollars to terrorists, although Saddam did to Palestinian terrorists and was working on WMD's even if he did not have them yet......that's why we had to go in and remove him from power.
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