In Remote Field, North Dakota Suffers First Big Oil Spill

TIOGA, North Dakota/NEW YORK, Oct 10 (Reuters) - A Tesoro Logistics LP pipeline has spilled more than 20,000 barrels of crude oil into a North Dakota wheat field, the biggest leak in the state since it became a major U.S. producer.

The six-inch pipeline was carrying crude oil from the Bakken shale play to the Stampede rail facility outside Columbus, North Dakota. The affected part of the line has been shut down, Tesoro said.

Farmer Steven Jensen discovered the leak on Sept. 29 while harvesting wheat on his 1,800-acre farm, about nine miles northeast of Tioga, North Dakota.

Oil was gushing from the pipeline "like a faucet, 4 to 6 inches spewing out," said Jensen, who added that nearby wheat plants were ruined.

The leak did not pose an immediate threat to groundwater sources, Kris Roberts, who leads the environmental response team at the state Department of Health told Reuters.

At an estimated 20,600 barrels, it ranks among the biggest U.S. spills in recent years. It is the biggest oil leak on U.S. land since March, when the rupture of an Exxon Mobil pipeline in Mayflower, Arkansas spilled 5,000 to 7,000 barrels of heavy Canadian crude.

It comes at a time when concerns are growing over the safety of the U.S. pipeline network, which is pumping more oil than ever to bring shale oil and Canadian crude to U.S. refiners.

While authorities said no lakes, streams or rivers were within five miles of the spill, the incident could provide ammunition to activists who contend water supplies could be endangered by construction of the proposed Keystone XL pipeline from Canada to Oklahoma.

Neither Tesoro nor state regulators could give a cause for the spill or say how long it lasted. Repairs, containment and remediation could cost $4 million, Tesoro said in a statement.

"The pipeline was shut immediately and the leak is now contained," said Tina Barbee, a Tesoro spokeswoman.

For a factbox on recent U.S. oil spills, see:

"As Big As Deck"

The oil was isolated within a 7.3-acre (29,947 square meter) area, and within the top 10 feet of clay soil, according to a report filed with the National Response Center on Oct. 8.

The center generally makes such reports available on its website within 24 hours of their filing, but services were interrupted last week because of the U.S. government shutdown.

Jensen said he smelled the sweet Bakken crude oil four days before he discovered a black pool "as big as a deck" on a remote part of his wheat field.

"It was pretty ugly," he said. The nearby crop had "disintegrated, you wouldn't have known it was a wheat plant."

A day after Jensen reported the leak to an 811 line, the company sent its response team and burned oil that had accumulated on the spot.

Tesoro also dug containment ditches 14 feet deep around the area to limit the effects of the leak, which occurred below ground, North Dakota State Representative David Rust said.

Three excavators were scooping up contaminated soil and dumping it into yellow shipping containers late on Thursday. Security personnel kept trespassers at bay while men in hard hats worked on the site.

Cascading Effects

The ruptured pipeline is part of Tesoro's "High Plains" pipeline system in North Dakota and Montana, which gathers oil from the Bakken shale and delivers it to another Enbridge pipeline and Tesoro's 68,000 barrels-per-day Mandan refinery. The line runs 35 miles from Tioga to Black Slough, North Dakota.

San Antonio, Texas-based Tesoro said the refinery in Mandan is operating normally. But the shutdown has affected third-party shippers, Tesoro's Barbee said.

"We are unable to forecast potential supply impacts on behalf of our third-party shippers," Megan Arrendondo, a Tesoro spokeswoman said.

The company said the U.S. Environmental Protection Agency and the Pipeline and Hazardous Materials Safety Administration (PHMSA) were at the site. The regional EPA office could not be reached because of the government shutdown.

This is the biggest oil spill in North Dakota since 1 million barrels of salt water brine, a by-product of oil production, leaked from a well site in 2006, according to the state Department of Health.

New developments in hydraulic fracturing, or fracking, have caused a boom in North Dakota's oil production and boosted the state's economy. Oil output jumped from 125,000 barrels per day in 2007 to 875,000 bpd in July. North Dakota is now second only to Texas in oil production among U.S. states.