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Arkansas Exxon (XM) oil spill due to defects from the 1940’s: Report

UPI
1 Comment| August 2, 2013


WASHINGTON, Aug. 2 (UPI) -- The March failure of the Pegasus pipeline in Arkansas that spilled 5,000 barrels of oil was likely caused by original defects, a metallurgical report said.
 
About 5,000 barrels of a diluted form of heavy Canadian crude oil spilled from a 22-foot rupture in the Pegasus pipeline in Mayflower, Ark. Operator ExxonMobil (NYSE:XM, Stock Forum) Pipeline Co. said it had removed nearly all of the free-standing oil from the March spill and shifted to long-term remediation efforts.
 
A report by Hurst Metallurgical Research Laboratory said it was "highly probable" small cracks occurred when the original pipe was built in the 1940s. These cracks then would have spread and merged to form larger faults, which may have contributed to the rupture.
 
The 243-page report was published Thursday by the Pipeline and Hazardous Materials Safety Administration.
 
The Pegasus pipeline was built in the 1940s to deliver 96,000 barrels of oil per day from Illinois to southern U.S. refineries. A very small amount of oil spilled from the same pipeline in Missouri following the March incident.
 
Exxon has not outlined plans to restart the pipeline. The Hurst report confirms Exxon's assessments from July.
 
Student activist group Citizens Advisory Group and Global Community Monitor in June said residents showed signs of exposure to chemicals ranging from benzene, a carcinogen, to toluene, a central nervous system depressant, more than four weeks after the spill.
 
Exxon Mobil (NYSE:XM, Stock Forum) hit a price of $91.94 in early trading, down from a 52-week high of 95.49 in mid-July, while Phillips 66 (NYSE:PSX, Stock Forum) hovered around the $58.62 mark.
 
At the other end of the spectrum, small cap player Zodiac Exploration (V.ZEX, Stock Forum) was up 13.3% to $0.085 on increased volume as it seeks listing on U.S. exchanges.
 

Tags: OIL & GAS E&P OIL & GAS REFINING & MARKETING

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