(Updates with debate over Keystone XL pipeline)
By Laura Zuckerman
SALMON, Idaho, July 15 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.
OBAMA ADMINISTRATION TO DECIDE
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 Canada.
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)