UPDATE 1-Exxon: Ruptured pipeline carried tar sands crude

Sat Jul 16, 2011 12:42am BST

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 (Updates with debate over Keystone XL pipeline)
 By Laura Zuckerman
 SALMON, Idaho, July 15 (Reuters) - ExxonMobil (XOM.N) said
on Friday a pipeline that failed two weeks ago, leaking oil
into the Yellowstone River, routinely transported a heavier and
more toxic form of crude than the company and federal
regulators initially acknowledged.
 The Silvertip pipeline carries so-called tar sands crude
from Alberta, Canada, as do the U.S. pipelines of most major
oil companies, Exxon spokeswoman Karen Matusic told Reuters.
 Matusic said the tar sands crude was present along various
segments of the pipeline but not at the spill site in Montana.
 "Oil from Canada was in the line, but not that area that
was affected by the breach. The oil that spilled out, that oil
came from Wyoming," she told Reuters, referring to sweet crude
produced in oil fields at the Montana-Wyoming border.
 Tar sands oil or bitumen, derived from tar sands or oil
sands, contains more toxic components than the sweet, or low
sulfur, crude that Exxon and government regulators initially
said flowed in the Silvertip.
 Almost all the oil reserves in Canada's Alberta province
are found in oil sands, and Alberta accounts for more than 95
percent of Canada's total oil reserves.
 The news comes amid an intensifying debate over TransCanada
Corp.'s proposed $7 billion pipeline to carry more than half a
million barrels a day of tar sands crude from Alberta to U.S.
refineries in the Midwest and the Texas Gulf Coast.
 Environmentalists and wildlife advocates are fighting the
so-called Keystone XL pipeline, which would cut through six
states from Montana to Texas and cross rivers like the
Yellowstone, Platte and Missouri.
 Citing a University of Nebraska study released this week,
activists say spills from pipes weakened by the corrosive and
abrasive agents in tar sands crude would contaminate water
supplies for hundreds of thousands of Americans and destroy
bottomlands in the nation's midsection vital for endangered
birds like the whooping crane.
 The Obama administration is expected to make a decision
later this year on the pipeline, which TransCanada said would
create U.S. jobs and ensure a reliable source of oil as imports
from other countries such as Venezuela and Mexico decline.
 Environmental groups on Friday pointed to the July 1
rupture of the 69-mile Silvertip, which spilled what Exxon
estimates at 42,000 gallons of oil, or 1,000 barrels, into the
Yellowstone River west of Billings.
 Officials with the U.S. Transportation Department's
Pipeline and Hazardous Materials Safety Administration said on
Wednesday they had just learned the Silvertip carried oil from
 Federal inspectors were trying to determine if transport of
the synthetic petroleum product could have triggered internal
corrosion that may have played a role in the rupture.
 Montana Governor Brian Schweitzer has faulted Exxon for
failing to tell the state exactly what kinds of crude ran in
the pipeline or spell out what hazardous chemicals were in the
mix now contaminating riverside properties and sickening at
least five residents.
 On Friday, he underscored his support for the Keystone XL,
which Exxon and other major oil companies are counting on.
 The pipeline "could help maintain and even increase oil
production in Montana while bringing hundreds of new energy
jobs and over $1 billion in investment to Montana," Schweitzer
said in a statement.
 Unlike the Silvertip, he added, the Keystone would be
installed 25 feet below the riverbed and would feature an
automatic shutdown in the event of a failure.  
  (Additional reporting by Jeffrey Jones and Timothy Gardner,
editing by Dan Whitcomb, Peter Bohan and Cynthia
Johnston;editing by Sofina Mirza-Reid)