Plains All Pipelines Guilty Of Oil Leakage Off California
Plains All Pipelines L.P.’s (PAA - Analyst Report) onshore pipeline rupture has resulted in a leakage of nearly 105,000 gallons of crude oil out of which one-fifth or 21,000 gallons are expected to have already reached the sea off the coast of California.
The spill took place on Tuesday night nearly 20 miles west of Santa Barbara. A broken onshore pipeline of Plains All Pipeline spilled oil down a storm drain and into the Pacific Ocean for several hours before it was located and shut off. The spill created two slicks that span nearly 9 miles off California coast. Initially, the slick was expected to be around 4 miles.
Plains All Pipelines officials said crude was flowing through a 24-inch pipeline at 54,600 gallons an hour at the time of the accident. However, they remained tightlipped regarding the duration of the leak and the rate at which crude oil escaped from its pipeline before it was switched off.
Federal regulators are investigating the leak and are yet to ascertain the time or the cost of the cleanup. Three sets of floating booms have been deployed to prevent the slicks from spreading, while other boats are skimming oil from the surface of the sea.
Plains All Pipelines currently has a Zacks Rank #5 (Strong Sell) and has been under the scanner for pipeline leakage and violation of environmental norms. Past record shows that this partnership’s pipelines have been culpable for at least 10 oil spills in four U.S. states. The partnership was responsible for a pipeline leakage in Canada in Apr 2011.
The financial damage from the spillage is yet to be assessed, but the major casualty will be the fragile and endangered marine wildlife. Plains All Pipelines has been allowed to continue with cleanup operations in the region. Without a doubt, the partnership will have to pay heavily for the damage caused by the spillage.
Big oil will be in focus in the coming days as environmentalists will not lose the opportunity to turn its censure on the industry. Some better-ranked stocks in the space include Holly Energy Partners L.P (HEP - Snapshot Report), Buckeye Partners, L.P. (BPL - Analyst Report) and Columbia Pipeline Partners LP (CPPL -Snapshot Report), each carrying a Zacks Rank #2 (Buy).
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