A controversial oil-sands pipeline operated by a Canadian oil company was ordered shut down Friday by the US Department of Transportation on charges that its continued operation “would be hazardous to lives, property, and the environment."

TransCanada, a leading North American pipeline operator, started operation of Keystone I, a 36-inch pipeline system, in June 2010, making it possible to deliver Canadian oil to markets across Midwest farmland in several states, from the Dakotas through Illinois.

The company wants to expand the system so that it snakes from the Canadian province of Alberta, taking oil southeast through Oklahoma and eventually into refineries located in Nederland, Tex., along the Gulf Coast. The company says its new system, titled Keystone XL, will contribute $20 billion to the US economy through job creation and local property taxes.

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However, the shutdown this week may create obstacles to getting final approval from the US State Department, which is faced with weighing the benefit of receiving 1.29 million barrels, or 54 million gallons, of oil per day into US markets with the environmental risks of having potentially hazardous crude oil moving across thousands of miles of fertile farmland and into its primary freshwater aquifer.

A decision is expected by the end of this year.

The order to shut down the existing pipeline follows two leaks, on May 7 and May 29. The first, according to the order, released 400 barrels, or 16,800 gallons, of crude oil in Sargent County, North Dakota. The second involved a leak at a pump station in Doniphan County, Kan., which released 10 barrels, or 420 gallons, of crude oil into the environment.

In his eight-page order, Jeffrey Wiese, an associate administrator for pipeline safety, said he is directing the shutdown due to “the proximity of the pipeline to populated areas, water bodies, public roadways and high consequence areas, the hazardous nature of the product the pipeline transports, the ongoing investigation to determine the cause of the failures, and the potential for the conditions causing the failures to be present elsewhere on the pipeline.”

The company is required within 90 days to submit a work plan for approval that shows corrective measures in place related to the leaks.

Environmental groups warn that, besides the leaks, TransCanada is working against the public interest because it is being allowed to use thinner steel than is typically required for US pipelines. They also say that more leaks are certain since oil from tar sands is more corrosive than conventional oil, especially when moved under high temperatures and pressure.

The leaks in May “should be a clarion call for the State Department to seriously consider the safety concerns posed by Keystone XL,” said Anthony Swift, a lawyer with the National Resources Defense Council, in a statement.

Besides the concern over future oil leaks, local farming and ranching interests say that the pipeline, if extended, could damage their industry and way of life.

The National Farmers Union, a Washington organization which advocates for family run farms, sent a letter to Secretary of State Hillary Clinton Thursday asking for an extension of the public comment period, which ends Monday.

Roger Johnson, the organization’s president, says his members continue to have “serious concerns regarding the proposed Keystone XL pipeline.”

“While several alternate routes and potential impact to various land-use types, federal lands and bodies of water were considered … we feel that [the federal environment impact statement] lacked sufficient analysis to reach an appropriate conclusion,” he wrote.

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