More on the explosion and aftermath that killed two workers and put a couple of Canada-to-US oil pipelines out of commission early this morning (emphasis added):

Enbridge Says Pipeline Fire Put Out, Two Links Open (Update3):

Enbridge Inc., Canada’s largest pipeline company, said a fire that killed two workers and disrupted crude supplies to the U.S. was extinguished and two of four links were reopened.

The blaze near the Clearbrook terminal in Minnesota was put out at about 5:45 a.m. local time and lines No. 1 and No. 2 on Enbridge’s Lakehead system resumed shipments, Blake Olson, terminal supervisor, said in a telephone interview. The system’s No. 3 pipeline exploded as it was being refilled after maintenance, Olson said. Pipelines No. 3 and No. 4 remain closed while an investigation into the incident continues.

Oil futures in New York jumped as much as 5 percent, their biggest intraday gain this month, after the explosion disrupted pipelines carrying about 15 percent of U.S. crude imports. The Lakehead system carries an average of 1.5 million barrels of oil a day to refineries in the U.S. Midwest and eastern Canada. Crude supplies to some refineries may be affected, Olson said.

U.S. `Reaching Out’ to Refiners After Pipeline Blast (Update1) :

The U.S. Energy Department said it’s “reaching out” to refiners in the Midwest after a pipeline explosion in Minnesota disrupted imports of Canadian oil.

Crude oil from the U.S. Strategic Petroleum Reserve “is available to alleviate a severe supply disruption and remains available,” Megan Barnett, a spokeswoman for the department, said today in a telephone interview. She declined to say whether the department has received any requests to tap the reserve.

…

“The Department of Energy is currently reaching out to refiners in the Midwest, Enbridge officials and individuals across the federal government to further assess the situation and offer assistance,” Barnett said.

The reserve currently holds 695 million barrels of oil in salt caverns along the U.S. Gulf Coast. President George W. Bush is seeking to expand the size of the reserve to 1.5 billion barrels by 2027.

This is a big hint that the government is taking this seriously. The current administration has made it very clear that it does not see the value in using the SPR merely to ease price fluctuations; they want it used only for emergencies. For them to “reach out” like this and make the offer so quickly is quite revealing.

One other SPR detail: While it has 695 million barrels of oil, no one knows exactly how quickly it could be tapped in an all-out emergency. I’ve seen estimates that we could use at a rate of no more than four million barrels/day, which is only about 20% of US consumption, and, more important, only about 30% of US imports.

ConocoPhillips Illinois Plant Expects Adequate Supply (Update1):

ConocoPhillips said production at its Wood River refinery in Illinois won’t be affected by an explosion yesterday that disrupted crude oil imports from Canada on a pipeline run by Enbridge Inc.

The refinery, which can process 306,000 barrels of crude oil a day, doesn’t rely on the Enbridge line, spokesman Bill Graham said today in an interview from ConocoPhillips headquarters in Houston. The refinery is the largest for ConocoPhillips.

…

Midwest crude oil prices probably will rise as processors that use more Canadian oil, such as BP Plc’s Whiting, Indiana, refinery, try to replace lost supply, Graham said.

“It’ll make the whole central U.S. crude market a bit tight right now, whether you get it directly off of Enbridge or not,” Graham said.

Enbridge pipeline explosion prompts oil price jump

Explosion At A US-Canadian Pipeline Sends Oil Prices To $95.17 A Barrel, 5pct High

IEA monitors Canada-U.S. oil pipeline outage

Oil falls back after surge on pipeline explosion

Time To Tap The Strategic Petroleum Reserve As Pipeline Explosion Cuts U.S. Supplies

As always with such events, the two key oil questions are: How large is the disruption, and how long will it last? Right now, it seems that this won’t be that big a deal in the energy markets; as I type this oil is up $1.61/barrel, and gasoline is up 3.58 cents/gallon on the day.

By the way–Canada is the leading source of US oil imports at about 2.3 million barrels/day, according to the Annual Energy Review, Table 5.4. For those keeping score at home, Mexico is second at 1.7 mb/day, Saudi Arabia is third at 1.461 mb/day, and in fourth place is Venezuela at 1.409 mb/day.