The Keystone oil pipeline, which stretches nearly 2,700 miles, was unexpectedly shut down on Tuesday morning following a rupture in North Dakota. This incident has temporarily halted the transport of millions of gallons of crude oil from Canada to U.S. refineries, which may potentially impact gas prices.
The pipeline is managed by South Bow, a company specializing in liquid pipelines. They reported that the shutdown was initiated after their control center detected a pressure drop, indicating a leak. An estimated 3,500 barrels of oil were spilled into a rural agricultural field approximately 60 miles southwest of Fargo, North Dakota.
In a statement, South Bow emphasized that the affected segment is currently isolated and operations are underway to address the situation. Their priority remains ensuring safety for personnel on-site and minimizing environmental harm.
According to Canadian regulators, the Keystone pipeline transported about 624,000 barrels, exceeding 26 million gallons daily as recently as 2024. The pipeline stretches 2,689 miles from Alberta, Canada to Texas.
There is a concern that the shutdown might lead to increased gasoline prices, particularly in the Midwest. Ramanan Krishnamoorti from the University of Houston highlighted that the disruption could lead to a spike in prices for diesel and jet fuel, as Keystone transports a heavy crude blend that is sourced from a limited number of locations. This crude type is essential for producing certain fuels.
Higher diesel prices could indirectly raise grocery costs since many goods are transported via diesel-powered trucks. Meanwhile, Patrick De Haan, an analyst from GasBuddy, remarked that refineries usually have several days’ worth of crude reserves, which might buffer some immediate impacts. However, if the shutdown extends beyond a few days, issues could arise.
Mark LaCour of the Oil and Gas Global Network suggested that immediate gasoline price increases might not occur since major refineries served by Keystone have substantial stored reserves. Even if Keystone’s supply is interrupted for weeks, refineries can continue operations with their current crude stocks.
The cause of the pipeline’s rupture remains unclear. Workers near Fort Ransom, North Dakota reported hearing a “mechanical bang,” which prompted the rapid shutdown of the pipeline in about two minutes, according to Bill Suess from the North Dakota Department of Environmental Quality.
Oil surfaced near a pump station, but fortunately, no individuals or structures were impacted. A nearby seasonal stream was preemptively blocked as a precaution. The Pipelines and Hazardous Materials Safety Administration (PHMSA) is investigating the leak.
Fort Ransom is a scenic area in southeastern North Dakota, known for its natural attractions. Though the exact flow rate of the 30-inch pipeline is unknown, past incidents have resulted in spills of significant volume.
The Keystone Pipeline, constructed in 2010 for $5.2 billion, has previously encountered ruptures and spills. Although an extension called Keystone XL was planned, it was shelved in 2021 following protests and environmental concerns.
In the event of a spill, PHMSA investigates to identify causes and check compliance. The agency, which also regulates natural gas pipelines, has faced resource and staffing challenges under past federal cuts. PHMSA has yet to comment on the current incident.
Bill Caram of Pipeline Safety Trust expressed concerns over PHMSA’s understaffing, which he believes affects pipeline safety. Keystone’s history includes multiple significant spills since its inception 15 years ago.
A previous major leak in Kansas in 2022 led to a considerable oil spill, following which the pipeline was offline for over three weeks. Investigation into that spill revealed construction-related overstressing and welding issues in the pipeline as underlying causes.