On Friday afternoon in the town of Mayflower, Ark., a leak occurred in ExxonMobil's (NYSE: XOM ) Pegasus pipeline spilling crude oil all over yards, driveways, and into the street.
On 2 blocks, 22 homes were evacuated as over 12,000 barrels of oil and water leaked from the pipeline.
The Pegasus pipeline is an 848-mile long, 20-inch thick, crude pipeline that connects Patoka, Ill., to Nederland, Texas. In 2009, Exxon expanded the pipeline's capacity by 50% to 90,000 barrels per day. After learning of the spill, Exxon shut down the pipeline and emergency personnel responded to the spill site within 30 minutes. Exxon sent 15 vacuum trucks and over 100 personnel to begin cleaning it up and to figure out what happened. Inspectors and staff from the Environmental Protection Agency as well as the Pipeline and Hazardous Materials Safety Administration also responded.
Opponents of TransCanada's (NYSE: TRP ) Keystone-XL pipeline are taking advantage of the spill to push the White House not to approve the Keystone-XL. Opponents hope that by stopping the pipeline they will slow the development of oil sands in Canada which is being led by SunCor Energy and Canadian Natural Resources. Opponents argue that the development of oil sands is terrible for the environment and that oil sands are more corrosive to pipelines than predicted. However, not approving the pipeline won't stop the development of oil sands. Producers will find some way to transport their goods; so far, the effect has just been a large increase in railroad traffic.
While the spill is terrible for residents, pipelines are safer, less polluting, and more efficient than the alternatives of transporting oil by truck or railcar. A recent report from the EPA found that the environmental impact is not as bad as opponents claim. Pipeline accidents, like airplane crashes, suffer from availability bias, which means that since the media heavily reports every major accident, people overestimate the probability of such an event happening again. That's why after an airplane crash fewer people fly, yet people don't worry about driving everyday even though it is far more dangerous.
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