Oil Spill in the Gulf & Other Places

Oil-pipeline Explosions Create Environmental Disaster for China

Cleanup efforts continue after two pipelines burst in Dalian, spilling about 11,000 barrels of oil into the Yellow Sea. Environmentalists are trying to assess the damage to beaches and fisheries.

July 19, 2010

Los Angeles Times - The ground shook when the first oil pipeline burst, leading residents and port workers near Dalian's Xingang Harbor to think an earthquake was underway.

Instead, what locals were witnessing was China's most recent environmental mishap.

Two oil pipelines near the port exploded Friday, igniting a roaring inferno that shot flames 60 feet into the air and spilling an estimated 11,000 barrels of oil into the Yellow Sea.

No serious injuries were reported and the fire was brought under control Saturday, authorities reported, but as of Monday, hundreds of vessels were trying to clean up a slick that extended for miles. Port operations in the area were expected to be closed for at least a week.

Environmentalists, meanwhile, were trying to assess the damage to the popular beaches and fisheries at one of China's most important seaports. Smoke from the fire shrouded much of downtown Dalian over the weekend.

The extent of the damage will depend on such variables as containment of the oil, said Fu Guo, a professor at the Chinese Research Academy of Environmental Sciences. A large shellfish farm, operated by Zhangzidao Fishery Group, is about 50 miles from the site of the spill.

"There have been accidents in the past, but this one was more serious," Fu said. "The spill happened close to the city, so the impact on residents may be more severe."

China National Petroleum Corp., the nation's largest oil company and owner of both pipelines in Dalian, has not announced the cause of the accident, but authorities are investigating the role of a Liberian-flagged oil tanker that was unloading when the explosions occurred. Chinese analysts say the accident may have resulted from the improper loading of oil from ships to the harbor's storage tanks.

"The oil leak has been contained. The fire is under control. There is no new oil leaking into the sea," Jiang Jiemin, general manager of the oil company, said in a statement released Monday. He said the company would "learn from this and step up our safety measures."

Chinese officials and analysts said the Dalian spill was far smaller than the BP spill in the Gulf of Mexico.

Chinese companies and officials have garnered a bad reputation for flouting environmental and safety concerns for the sake of economic growth. A string of accidents capped by the Dalian explosions has prompted concerns about the country's environmental and safety practices.

In December, a large amount of diesel fuel began leaking out of a pipeline operated by the oil company in Shaanxi province, polluting a tributary of the Yellow River and threatening water supplies.

Dalian's Xingang oil port is one of four major storage locations in China and one of the first regions developed as part of the nation's strategic petroleum reserve, an emergency fuel store established in 2007. About 19 million barrels of oil are stored at the port. At one point over the weekend, there were fears that the fire in Dalian harbor could reach the oil tanks.

Authorities' response to the Dalian explosions may signal an improvement in crisis management. In 1989, an oil tanker on Huangdao, an island off the coast of Shandong province, was struck by lightning and burst into flames. It took five days to put the fire out.

In Dalian on the day of the explosions, more than 2,000 firefighters worked overnight and managed to extinguish the blaze in about 15 hours. Equipment was shipped from other Chinese provinces. By Sunday, several thousand yards of oil containment booms had been set up and at least 20 oil skimmers were dispatched to collect the oil. More than 500 fishing boats were also deployed with oil absorbent materials and dispersants to help with the cleanup.

China Seals Oil Port After Spill

July 19, 2010

Reuters - ... Maritime safety authorities are also battling to contain a 50 sq km (19 sq mile) oil slick after two crude oil pipelines exploded in the northeastern port of Dalian, state media added.

The oil executive said contamination on about 10 sq km of sea area was "quite serious."

Hundreds of firefighters battled for more than 15 hours to extinguish the blaze that started late on Friday when a pipe transporting crude oil from a ship to a storage tank blew up, causing a second pipeline nearby to explode.

RBS oil analyst David Johnson said the cost would not be significant for PetroChina's state-owned parent CNPC, at an estimated $50 million.

"It's not going to be a major cost in the big scheme of things. It's going to be in the tens of millions of dollars, not tens of billions of dollars," he said.

"The question is, who owns the oil in the tanker and whether the oil is insured. But some of them will have to pay the clean-up costs. The question is, who's going to be liable? It's like the BP story -- whose fault is it?"

Johnson said the oil spill could lead to tighter rules and regulations on the oil industry.

The incident drew the attention of top Chinese officials, including President Hu Jintao, Premier Wen Jiabao and security chief Zhou Yongkang, who all issued statements and instructions during the blaze.

"Though the oil pipe blast in Dalian has caused serious damage to the environment, it is not comparable to the BP oil leak in the Gulf of Mexico," Zhao Guojun, from the Shanghai Academy of Social Science's Centre for Studies on International Affairs, told the Global Times.

"Whether or not the blast was caused by inappropriate operations by foreign oil ships, the incident is controllable," Zhao added.

There were no casualties, but state television said oil had contaminated the ocean off the port city in Liaoning Province.

The storage facility is jointly owned by Dalian port and China's top oil company China National Petroleum Corp (CNPC), parent of PetroChina.

Shares of Dalian Port fell 4.4 percent, while PetroChina stocks lost 1.3 percent.

Workers are using skimmers and dispersants to break up the oil slick and stop it spreading, the official China Daily said. The pollution is concentrated about 100 km (62 miles) offshore.

"By Sunday evening, about 7,000 meters of floating booms had been set up and at least 20 oil skimmers were working to clean the spill," the newspaper quoted local officials as saying.

There are no residents within 3 km (1.8 miles) of the affected site, and little "marine farming," the report added.

The Xingang oil storage site, where the explosion happened, is home to one of the country's first government-held emergency crude stockpiles and a larger commercial crude reserve base built by PetroChina.

It is also a transfer spot for two nearby major refineries, Dalian Petrochemical Corp and WEPEC, both operated by PetroChina with a combined crude processing capacity of 600,000 bpd.

The blast happened when a Liberian-flagged tanker was off-loading oil, the China Daily said.

The cause of the blast is under investigation, and CNPC, the parent of PetroChina, said monitoring of the air and sea environment had been stepped up in the affected areas.