Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Exxon Mobil Corporation (XOM), TransCanada Corporation (USA) (TRP) & How Effective Are Pipeline Leak Detection Systems?

Recent pipeline spills, such as Exxon Mobil Corporation (NYSE:XOM)‘s not-so-minor crude oil spill in Arkansas last month, have raised important questions about the effectiveness of pipeline operators’ leak detection systems.

Exxon Mobil Corporation (NYSE:XOM)

These issues are especially pertinent for TransCanada Corporation (USA) (NYSE:TRP)‘s proposed Keystone XL pipeline, which would link production from Alberta’s oil sands to U.S. Gulf Coast refiners. With that in mind, let’s take a closer look at how leak detection systems work and how effective they are.

A primer on leak detection systems
Though pipeline companies use a wide array of techniques to detect leaks, remote leak detection technology is the most comprehensive, offering real-time, nonstop monitoring along the line’s route.

After purchasing leak detection technology from specialist firms, most pipeline operators customize their system to better serve their needs on a project-by-project basis. In most cases, sensors are placed along a pipeline, where they gauge such important metrics as temperature, pressure, and flow rates.

This information is relayed to an operator’s control room, where it has a dual purpose — to record how much oil has been delivered to the company’s customers and to monitor the line for leakages or ruptures.

When the sensing technology detects something unusual, such as a sharp change in pressure or flow rates, it sets off an alarm. The company’s personnel then conduct additional tests to figure out whether or not the unusual activity signals a leak.

In many cases, however, alarms can be triggered by non-threatening activity. For instance, the buildup of bubbles within the pipeline’s flow — known as column separation — often triggers false alarms and appears exactly as a leak would to the remote operators in the control room.

In fact, some operators may get so used to false alarms that they may become dismissive of real ones. For instance, consider the rupturing of an Enbridge Inc (USA) (NYSE:ENB) pipeline in July 2010, which discharged more than a million gallons of dilbit crude into Michigan’s Kalamazoo River in what was the first major bituminous crude spill into a U.S. waterway.

Enbridge spill highlights issues with leak detection systems
As InsideClimate News reported in a painstakingly thorough and engaging investigation of the Enbridge spill, for which it was awarded the Pulitzer Prize for national reporting, the Enbridge Inc (USA) (NYSE:ENB) accident was riddled with misunderstandings that led to an unfortunate outcome.

At the time the pipeline ruptured, the company’s controllers were monitoring data from multiple lines, while also working 12-hour shifts. At the first sign of danger — the moment pipeline 6B ruptured — numerous alarms were triggered.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.