Tag Archives: Alberta Tar Sands

Enbridge oil spill in NWT could top 1,500 barrels

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From the Calagary Herald – May 6, 2011

by Dina O’Meara

CALGARY — An oil leak in a remote area of the
Northwest Territories could reach up to 1,500 barrels — substantially
more than the four barrels originally reported by pipeline operator
Enbridge Inc.

The Calgary-based pipeline
operator said Monday its original estimate was based on oil found on
land at the leak site, located about 50 kilometres south of Wrigley,
NWT, and didn’t take into account seeping into the soil.

“Based
on current estimates provided by the third party experts on site,
Enbridge anticipates the release volume could range from a minimum of
700 barrels to a maximum of 1,500 barrels,” said spokeswoman Gina
Jordan, in an e-mail late Monday. “Based on its current analysis,
Enbridge anticipates the probability that the maximum volume would be
exceeded to be low.”

The company has removed about 100 barrels of oil from the site, she said.

Enbridge
last year faced an environmental and public relations nightmare after
its Line 6b ruptured in late July, spewing almost 20,000 barrels of oil
into Michigan waterways.

Jordan said the NWT leak was contained along the pipeline right of way and no watercourses were threatened.

The
Norman Wells to Zama, Alberta line was restarted May 20th, but is not
at full operations due an outage on the Zama to Hardisty, AB Rainbow
line, operated by Plains Midstream Canada.

Rainbow
was shut down in late April after a leak was detected on the system
near the community of Little Buffalo in northwest Alberta. The 28,000
barrel spill was the largest in Alberta for decades.

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U.S. order keeps Keystone pipeline shut down

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From the Montreal Gazette – June 3, 2011

by Sheldon Alberts

WASHINGTON — The Obama administration issued an order Friday
preventing Calgary-based TransCanada Corp. from restarting its massive
Keystone oil pipeline after an investigation into two spills in less
than a month found “serious” concerns about safety in pump stations
along the 3,450-kilometre line.

“After evaluating the
foregoing preliminary findings of fact, I find that the continued
operation of the pipeline without corrective action would be hazardous
to life, property and the environment,” Jeffrey Wiese, the associate
pipeline safety administrator with the U.S. Department of
Transportation, wrote in a letter to TransCanada executives.

The
order to keep the 600,000-barrel-per-day pipeline shut down comes after
investigations into separate spills at Keystone pumping stations in
North Dakota and Kansas determined “cyclical fatigue” contributed to the
failure on pipe fittings at both facilities. It requires TransCanada
meet 14 conditions before the pipeline can resume operations.

The
problems along the existing Keystone pipeline come at a critical time
for TransCanada, which is seeking a presidential permit approving the
construction of a second major pipeline, the Keystone XL, across the
U.S. Great Plains to the Gulf Coast in Texas.

The U.S.
State Department is completing public consultations on Monday into an
environmental impact study of the proposed Keystone XL Line.

Environmental
groups and landowners along the planned route of the new pipeline fear a
major spill could cause irreparable damage to sensitive ecosystems like
the Sand Hills in Nebraska. There are also concerns, particularly in
Nebraska, about environmental threats to the Ogallala Aquifer, a major
groundwater source for residents in the Great Plains states. Keystone XL
would cross the aquifer.

“We recognize that these
instances would lead to negative public perception about our pipelines,”
TransCanada spokesman Terry Cunha said Friday afternoon. “But we take
these things very seriously and we are taking the necessary steps to be
done to ensure the integrity of the system.”

The original
Keystone pipeline — which began delivery of oilsands crude from
Hardisty, Alberta, in June 2010 — has so far had 11 breaks along the
2,100-kilometre U.S. portion of the line.

The pipeline was
shut down May 7 after about 400 barrels of oil spilled at the Ludden
pump station in Sargent County, North Dakota. The pipeline was restarted
on May 13.

TransCanada was forced to shut down the
pipeline again following the failure of another fitting at the Severance
pump station in Doniphan County, Kansas.

About 10 barrels
of oil were spilled in Kansas, and TransCanada officials said this week
they hoped to restart the pipeline again within days.

The
Department of Transportation order revealed a third, previously
unreported leak, on May 25 at the Roswell pumping station in South
Dakota. That spill was not big enough “to meet reportable criteria,” but
it was also caused by cyclical fatigue on a transmitter fitting.

“I’m
concerned about the environmental risk. There have been 11 spills in
TransCanada pipelines in the last year, I believe. That seems to me to
be a rather high number,” said Bill Avery, a Nebraska state senator who
opposes the construction of the new Keystone XL.

“The
spills validate some of the concerns that a number of us have had all
along. Maybe TransCanada is not leveling with the public . . . about the
safety of its pipeline.”

The corrective ordered issued on
Friday “prevents TransCanada from restarting operations on their
Keystone crude oil pipeline until (the Pipeline and Hazardous Materials
Safety Administration) is satisfied with the ongoing repairs and is
confident that all immediate safety concerns have been addressed,” Julia
Valentine, a Department of Transportation spokeswoman, said in an
emailed statement.

“In addition to immediate repairs and
testing, PHMSA’s order requires TransCanada to perform metallurgical
testing and root cause failure analysis, review other parts of the
pipeline system for concerns similar to those involved in the recent
failures, make permanent repairs and continue ongoing monitoring.”

The
North Dakota spill in early May was sourced to a small “swaged nipple”
on piping that had cracked “as a result of over-torque during
installation,” the Department of Transportation said.

TransCanada
determined “the cyclic bending stress fatigue due to normal operational
vibration propagated the cracks to failure,” according to the
corrective action order.

The Keystone break in Kansas on May 29 was on a half-inch diameter nipple that also indicated “cyclical fatigue.”

In
the corrective action order, Wiese writes that there is “potential for
the conditions causing the failures to be present elsewhere on the
pipeline.”

TransCanada must now send the U.S. government a
detailed “re-start plan” including information about repairs, evidence
of proper pump station monitoring and communication with local emergency
officials along the route.

“I don’t have a timeline as to
when the start-up will be taking place,” said Cunha. “But we are
implementing all the 14 conditions outlined, and hope to have them
implemented right away so that way we could have the system up and
running as soon as possible.”

The pipeline has, as of
Friday, been shut down for six consecutive days. TransCanada remains
hopeful Keystone can “deliver all of our obligations for the month of
June,” Cunha said.

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Trade Mission: China targeting tens of billions in Alberta oilsands investment

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From the Calgary Herald – May 30, 2011

by Chris Varcoe

SHANGHAI – Alberta government and business leaders
who sat down with Chinese energy executives this week were told tens of
billions of dollars in new oilpatch investment will flow in the coming
years — if export capacity issues in Canada are improved.

Finance
Minister Lloyd Snelgrove said Sunday that senior officials from Chinese
state-owned oil firms anticipate future investment will dwarf —
potentially tripling — what they have already spent in Canada’s energy
sector in recent years.

In the past 18 months alone, Chinese oil
companies have pumped more than $13 billion into developing crude oil
and natural gas prospects in Western Canada.

However, future
spending is contingent upon Canada building new pipeline capacity to
transport oilsands — such as the $5.5-billion Northern Gateway project
planned by Enbridge Inc. — and natural gas to the West Coast, where
liquefied gas could be shipped by tanker into the Chinese market, he
said.

“They said the critical part to them was having access to
the product and now it’s stranded in the North American market. They
believe we need the Gateway pipeline ASAP,” the finance minister said in
an interview.

“It’s absolutely massive amounts of dollars when
you look at it … Between bitumen expansion and the liquid natural gas
opportunities they’ve got, you’re probably talking in excess of $20
billion over the next 10 years from one of the companies — and the
others all talked about investments — so it’s enormous. It’s huge
dollars.”

The high-level meetings were part of a trade mission to
China organized by Calgary Economic Development to promote tourism and
investment with the most populous country in the world.

Officials
with the state-owned oil companies weren’t available for comment, but
China’s Ambassador to Canada told an Alberta audience recently that
“China-Canada co-operation in energy has become a highlight of our
economic relations.”

Chinese state-owned oil producers “play by
the rules of global competition …. Therefore, they deserve equal
treatments as other foreign companies,” Zhang Junsai said at an Edmonton
address earlier this month. “With a population of 1.3 billion, China is
a major energy consumer. We need fossil fuels.”

The issue of
growing Chinese oilpatch investment is a complex matter that touches
upon energy geopolitics and foreign investment, as well as First
Nations’ rights and environmental concerns in Canada.

The debate
also comes as China’s economic expansion is expected to fuel a
75-per-cent rise in the county’s energy demand by 2035, according to an
International Energy Agency, and an upswing in capital flowing into
Alberta.

Most of the money that has already been invested has
targeted the massive oilsands reserves of northern Alberta, although
Encana Corp. signed a $5.4 billion natural gas venture in February with
PetroChina.

The Fort McMurray area is home to the world’s
second-largest proven crude reserves, and oilsands output is projected
to reach as much as five million barrels a day in the coming years, up
from about 1.5 million barrels last year. To secure such growth, though,
the industry needs massive amounts of capital.

A Canadian Energy
Research Association study recently predicted the oilsands will require
$253 billion in capital for necessary construction.

To diversify
Canada’s export options for bitumen, the Alberta government and some
producers are aggressively backing efforts to expand pipeline access to
the West Coast, such as the Gateway project that has stirred up
opposition from environmental groups and some First Nations. Much of the
line route crosses traditional First Nations territory in British
Columbia that is subject to treaty negotiations.

The proposed
1,170-kilometre pipeline would run from the Edmonton area to a port in
Kitimat, B.C., and is now under federal review.

“First Nation
people are concerned about a pipeline going through their property,”
said University of Calgary professor Bob Schulz of the Haskayne School
of Business, who is on the China trip and has been following the
project’s development.

“Each band has a separate territory and it’s like going through separate countries.”

There
are also potential environmental issues with having new pipelines cross
the area, as well as the movement of crude oil tankers off the Pacific
Coast.

Ed Whittingham, executive director of the Pembina
Institute, said governments and industry should have to produce a
clearly defined development plan for all oilsands projects before
approving unneeded infrastructure.

“We still have concerns with
the pace and scale of development and what that means for increased
pressure on … land, water, air impacts — not to mention the climate,”
he said. “If they put in a new pipe, then obviously you want to fill it
and we’re worried that’s going to drive production increases.”

Pipeline access is a key interest for the Canadian oil and gas sector.

Baytex
Energy Corp. chief financial officer Derek Aylesworth said a new
pipeline would help ship Canadian crude to Asia, where it could
ultimately fetch a higher price than in the United States.

Right
now, Canada only exports the tar-like bitumen south of the border, so
any line that allows for Asian exports would help the industry diversify
away from just one international customer, said Aylesworth, who is in
Shanghai.

“Today, we’re obviously captive to the U.S. market and
we sell heavy oil at a significant discount,” he said Sunday. “The
industry is losing out on revenue, the government is losing out on
revenue.”

Ian Wild, executive vice-president of ATB Corporate
Financial Services, said he heard from Beijing oil executives this week
that they are growing frustrated by delays in Canadian pipeline
development and future investment is clearly at risk.

“I know
they’re saying to me that their patience has run out,” he said. “They
told me specifically that there’s at least $10 to $20 billion in
jeopardy here for the province.”

As for promises that larger investments are coming, Schulz said no one should be shocked given the scale of recent moves.

“The
amount of money is not a surprise,” said the director of petroleum land
management with the university. “This is just an incremental bite and
they’re ready for the next one. And each bite will be bigger.”

© Copyright (c) The Calgary Herald

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Canada leaves out rise in oilsands pollution from UN climate report

Canada, Climate Change, Energy and Resources, Politics, Tar Sands, ,
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From ipolitics.ca – May 30, 2011

by Mike De Souza

The federal government has acknowledged that it deliberately excluded
data indicating a 20 per cent increase in annual pollution from
Canada’s oilsands industry in 2009 from a recent 567-page report on
climate change that it was required to submit to the United Nations.

The
numbers, uncovered by Postmedia News, were left out of the report, a
national inventory on Canada’s greenhouse gas pollution. It revealed a
six per cent drop in annual emissions for the entire economy from 2008
to 2009, but does not directly show the extent of pollution from the
oilsands production, which is greater than the greenhouse gas emissions
of all the cars driven on Canadian roads.

The data also indicated
that emissions per barrel of oil produced by the sector is increasing,
despite claims made by the industry in an advertising campaign.

“The
oilsands remain Canada’s fastest-growing source of greenhouse gas
pollution, and they’re the subject of a huge amount of attention and
scrutiny in Canada and internationally,” said Clare Demerse, director of
climate change at the Pembina Institute, an Alberta-based environmental
research group. “So it’s very disappointing to see Environment Canada
publish a 500-page report that leaves out these critical numbers —
especially when last year’s edition included them.”

Overall,
Environment Canada said that the oilsands industry was responsible for
about 6.5 per cent of Canada’s annual greenhouse gas emissions in 2009,
up from five per cent in 2008. This also indicates a growth in emissions
that is close to about 300 per cent since 1990, which cancel out many
reductions in pollution from other economic sectors.

The report
attributes the six per cent decrease in Canada’s overall emissions to
the economic slowdown, but it also credits efforts by the Ontario
government to reduce production of coal-fired electricity as a
significant factor.

Environment Canada provided the oilsands
numbers in response to questions from Postmedia News about why it had
omitted the information from its report after publishing more detailed
data in previous years. A department spokesman explained that “some” of
the information was still available in the latest report, which still
meets Canada’s reporting obligations under the UN Framework Convention
on Climate Change.

“The information is presented in this way to be
consistent with UNFCCC reporting requirements, which are divided into
broad, international sectors,” wrote Mark Johnson in an email.

He
was not immediately able to answer questions about who made the decision
in government to exclude the numbers from the oilsands or provide a
detailed explanation about changes in emissions.

An industry
spokesman said it favoured more transparency from the government,
suggesting that some of the figures may be misleading because of changes
in methods used to identify and calculate emissions.

“It’s just
too bad you weren’t able to get a hold of (Environment Canada) on this
one, because here I am telling you my understanding of what’s going on,
but really it’s best to hear directly from them,” said Greg Stringham,
vice-president of oilsands and markets at the Canadian Association of
Petroleum Producers. “We report the information to them, and they choose
to pass it on — they must pass it on the UN. But then they choose how
to disclose it and put it out there.”

Although Stringham said that
the industry figures did not show any significant growth in emissions
per barrel of oil produced, the full report noted an intensity increase
of 14.5 per cent from 2008 to 2009, “mainly the result of a new
integrated mining and upgrading facility as well as a new integrated
in-situ bitumen extraction and upgrading facility,” that were not
operating at “peak efficiencies.”

Emissions from a mining
category, which includes oilsands extraction, saw a 371 per cent
increase in greenhouse gas pollution, according to the report. But other
categories showed significant decreases due, in part, to the recession,
but also because of changes in use of fuel and manufacturing
operations.

Environment Canada’s report recognizes that climate
change is occurring, mainly due to an increase in heat-trapping gases in
the atmosphere. The objective of the UNFCCC is to stabilize these
emissions in order to prevent dangerous changes to the climate.

Critics
have suggested the Harper government is deliberately trying to delay
international action to fight climate change, following revelations,
reported last fall by Postmedia News, that it had set up a partnership
with the Alberta government, industry and several federal departments to
fight pollution-reduction policies from other countries that target the
oilsands through lobbying and public relations.

Environment
Minister Peter Kent has said the federal government is committed to
reducing Canada’s greenhouse gas emissions and will introduce its plan
to regulate pollution from the oilsands within months. But he has also
acknowledged that existing federal and provincial policies would still
result in an increase in emissions over the next decade.

Although
the report was due in April, during the last election campaign, Canada
was the last country to file its submission. Environment Canada even
filed its submission after earthquake-stricken Japan, and was unable to
explain in detail why its report was late.

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Uhhh, About Those Pipeline Safety Claims: Bad week for Canadian Oilies

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From the Natural Resources Defence Council Blog – May 9, 2011

by Josh Mogerman

It has been a very bad couple of weeks for the Canadian oil and pipeline industries.

This weekend, the Keystone pipeline popped, spilling more than 20,000
gallons of tar sands oil and sending a 60’ spout into the air from a
pumping station in the Dakotas. The line remains closed. It is the 10th
spill on the line, which has not been in operation for a full year yet
despite being advertised as a safe, modern pipeline that would “only”
have 1.4 spills per decade. Ooops. This spill comes on the heels of a
much bigger pipeline failure in Alberta where 1.2 million gallons of oil
were spewed in the Peace River region last week. It is the worst spill
in Canada since 1975 and it illustrates a lot of the oil infrastructure
issues that we have been hammering on for some time.

Regarding last week’s spill, the Globe and Mail noted, “The spill raises new questions about the health of Alberta’s aging pipeline system.” Us too. Though Alberta’s regulators panned our report Tar Sands Pipeline Safety Risks
when it came out earlier this year (only to later admit they hadn’t
read it before responding), the event eerily echoed many of the concerns
we raised. While we do not know what was spilled near Peace River
(initial indications are that it was not tar sands oil), we do know a
bit about the pipeline that failed. Again, from the Globe and Mail:

“It’s the second major spill from the Rainbow line, whose owner is a subsidiary of publicly traded Plains All American Pipeline, L.P. (PAA-N61.98-1.00-1.59%)
In late 2006, 7,500 barrels leaked from the pipe, which travels 770 km
from Zama, Alta. to Edmonton. At the time, an investigation determined
that “stress corrosion cracking, fatigue cracking and external coating
failure caused the release.” These issues are often related to age; the
Rainbow line was built in 1966. It is designed to carry 220,000 barrels
per day; last year, it averaged 187,000 barrels per day.”

We also know that the line carried an array of oil products: from the
light sweet crude that most of us picture when we think of oil, to the
heavy DilBit that is the subject of the report.

And that is interesting.

The “stress corrosion cracking” noted in the previous Rainbow spill
is a hallmark of lines moving high sulphur fuels like DilBit, according
to NRDC pipeline expert Anthony Swift. We will be watching to see if
that comes into play when the CSI work is done to figure out the source
of this failure, but our report makes clear that the unique chemical
composition of DilBit makes corrosion-related breakdowns in pipelines
carrying the nasty stuff much more likely.

What is clear from this event and last summer’s Kalamazoo River spill
is that the Canadian oil industry doesn’t do itself a lot of favors.
The Keystone and Rainbow pipeline incidents are likely to give a lot of
people pause—many of whom have been assured repeatedly of the safe
status of North America’s oil pipelines to quell concerns over some
projects that the industry desperately wants: Keystone XL (a
pipeline from Alberta to Houston) and the Enbridge Gateway pipeline
(from Alberta to the British Columbia coast). Both are designed to open
up foreign markets for the tar sands oil that currently can only go to
Canadian and US markets. In both cases, there is fierce pushback along
the pipeline routes from folks reasonably concerned about spills and
especially impact on water resources.

The Keystone spill is particularly damning in that it makes clear
rosy safety predictions made by TransCanada (who would also build the
Keystone XL line) simply cannot be substantiated. The spill really was
the perfect opportunity for the pipeline company to prove its claim that
a spill on their system could be stopped in 12 minutes. Instead,
despite the fact that this occurred at one of their pumping stations
instead of a far-flung field where detection or access would be harder,
it reportedly
took 30 minutes to turn off the flow, 2.5 times the company’s claims.
It would not surprise me if landowners along the proposed pipeline path
were wondering if other safety claims were off by a factor of 250%.

And anyone watching the Alberta or Michigan spill has also been given
real reasons for pause.  The lack of transparency and slow response
have been surprising (heck, even Alberta’s Premiere Ed Stelmach, oil
industry apologist in-chief, has been criticizing the Rainbow pipeline response)
where no public announcement about what kind of oil had been spilled
was made for over a week. The initial size of the spill and proximity to
wetlands were discounted. This followed the spill in Michigan, where
the mere fact that tar sands oil was even involved was vehemently denied
until OnEarth magazine and Michigan Messenger
exposed the truth. Come on guys—fess up. Instead of investigation,
there is denial and defensiveness pretty consistently which doesn’t do
anyone any good. It hinders a quality cleanup, endangers public and
first responder health, as well as undercutting the public trust.

Blaming the victims doesn’t help much either. The brusque, uncivil
response to legitimate concern from folks near the Peace River spill is
also counterproductive. Check this out from Greenwire (subscription required):

“Just because there is an odor doesn’t necessarily imply there are
health-related issues,” said Environment Minister Rob Renner, who sent a
mobile air monitoring unit to the area.

…

“Whoever is saying that really doesn’t care what is going on,”
[Brian] Alexander [principal of Little Buffalo School on Lubicon Cree
First Nation, which is at the spill site] said. “They don’t care about
people’s well-being.”

Tsk, tsk.

Pipeline industry spokespeople like to say, “Oil is oil.” They repeat
it constantly. But that is simply not true. These spills make clear
that the industry needs to do more work to figure out how to move DilBit
safely. We cannot afford to add nearly 2,000 more miles of liability
for oil that a study commissioned by DOE shows
we don’t need. With a decision looming from the Obama administration on
Keystone XL, it seems pretty clear with the events of the last couple
weeks that the new pipeline should wait.

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B.C. aboriginal groups prepare pipeline protest march – groups meet in Calgary over proposed Enbridge pipeline

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From the Calgary Herald – May 10, 2011

by Dina O’Meara

CALGARY — Representatives of B.C. First Nations
and union groups gathered in Calgary to protest a proposed bitumen
pipeline from Alberta to the coast of B.C., setting the stage for a
colourful Enbridge annual meeting.

The
Calgary-based pipeline and energy company is promoting the $5.5-billion
pipeline, with associated marine terminal, as a nation-building project
which will open needed new routs to Asia.

Opponents
say the massive 1,172 kilometre line threatens pristine lands and key
waterways along its proposed route across the Rocky Mountains, as well
as the challenging waters of the northern B.C. coast.

A
group will be marching through downtown Calgary Wednesday morning to
Enbridge headquarters to voice their concerns ahead of Wednesday’s
annual meeting.

“I’m very concerned about the
risks that the Enbridge pipeline and the tankers off the north coast
post to the industry and our communities as a whole,” said Arnie Nagy,
president of Prince Rupert’s Local 31 United Fishermen and Allied
Workers Union.

Nagy’s family has been fishing
the region for generations. The coastal waters are known to be
treacherous, and any tankage break would decimate marine populations as
well as put thousands of people out of work, he said.

Nagy,
also a member of the Haida First Nation, was in Calgary along with the
Yinka Dene Alliance, a group of five First Nations with territories
spanning the proposed route, to raise awareness about their concerns
over possible oil spills on the proposed pipeline.

In
December the Alliance publicly rejected Enbridge’s offer of an equity
stake in the project, and banned the pipeline from its traditional
territories.

Members of the alliance met with Enbridge executives and board members Tuesday to discuss their views.

Concerns
were heightened last year after an Enbridge oil pipeline ruptured in
Michigan, spilling 19,000 barrels of sour oil into waterways leading to
the Kalamazoo River. Weeks later, another Enbridge line ruptured in the
Midwest, further bruising the company’s reputation.

And
on Tuesday Enbridge confirmed a segment of its Norman Wells pipeline
system in the Northwest Territories, sprang a small leak, releasing
about 407 litres of oil in the remote area.

While
the Yinka Dene group declined commenting on Tuesday’s meeting with
Enbridge until the following day, an company spokesman characterized it
as a dialogue.

“This is part of an ongoing
process,” Paul Stanway said. “We’ve been talking to Aboriginal
communities and Aboriginal representatives now for a number of years
about Northern Gateway and this is a continuation of that process.”

Chief
executive Pat Daniel, John Carruthers, president of Northern Gateway,
and the 13-member Enbridge board met with alliance members, he said.

The
meeting was an opportunity for executives and board members to hear
concerns from communities along the proposed pipeline route, and tell
Enbridge’s side of the story, Stanway said.

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Alberta pipeline spill could take years to clean up – Major wetland contamination feared

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From the Edmonton Journal – May 6, 2011

by Elise Stolte

The 28,000 barrels of crude oil spilled into a
wetland near Peace River will likely take years to clean up, especially
if oil soaks into the subsoil or groundwater, said a managing director
of the Pembina Institute, an Alberta-based energy and environment
think-tank.

“One big spring snow storm or rainfall and we could be
facing a large contamination issue, and that’s normal weather for that
region,” Chris Severson-Baker said. “I wouldn’t be surprised if clean up
takes more than a year or two. There will be a lot of soil and
vegetation that will be saturated with oil.”

The worst Alberta spill in 35 years happened on the Rainbow pipeline, which runs 770 kilometres from Zama to Edmonton.

The
pipeline, built in 1966, ruptured previously in 2006, when it was run
by a different company. That time, 7,840 barrels of oil leaked into a
creek south of Slave Lake.

When the Energy Resources Conservation
Board issued a report on the spill in May 2007, workers were still
trying to remove all of the contaminated soil and water.

The
company was told to reduce the pressure in the pipeline by 20 per cent
until it checked out 22 other sites identified as at risk.

It was
also told to run two inspection devices inside the length of the
pipeline to ensure there were no further weaknesses in the metal, and to
fly the length of the pipeline with an airplane twice a week to watch
for small leaks. Those conditions, applicable only on the southern
portion of the line, were lifted in March 2010, said board spokesman
Davis Sheremata. They never applied to the northern portion of the line,
where last week’s leak occurred.

Corrosion on the outside of the
pipe caused the 2006 rupture. Officials still haven’t determined what
caused this most recent break.

The portion that leaked is now
being tested by an engineering firm in Edmonton. Sheremata said it’s
important to determine if the piece of pipe broke because of the overall
integrity of the line or if it was a problem only with that particular
spot. Even if the latter was the case, the board will have to look at
the whole line to be certain it won’t fail elsewhere when it is allowed
to resume operations, he said.

Stephen Bart, vice-president of
operations for Plains Midstream, could not say how much oil was running
through the pipeline when it broke. Nor could he say whether the section
in question had ever been replaced or refurbished.

Severson-Baker
said the most recent spill highlights the need for the ERCB to take an
active role in deciding how long Alberta’s aging pipelines should
continue to operate.

“I don’t think it’s fair to say you can keep
them running forever,” he said. “This is the second time this pipeline
has had this problem. More can and should be done.”

The number of
pipeline breaks dropped 50 per cent in the last 15 years, mainly because
of new devices that run through the inside of the pipe and scan the
walls for weaknesses.

The Rainbow pipeline was scanned once a
year. When information is available on what caused the Peace River
rupture, Kenny said, the association will help its members upgrade
safety practices to take that into account.

Premier
Ed Stelmach has argued Alberta needs to develop new markets, which
includes building pipelines to the West Coast and a new one through the
central United States.

The recent spills will have an impact on
residents evaluating the risks of letting oil companies run pipes across
their land, said Severson-Baker. “If we in Alberta are going to be very
convincing, we have to demonstrate that we have a very robust system to
manage pipelines in Alberta.”

Stelmach called the spill
“disappointing,” but said he has confidence in the ERCB’s ability to
monitor the clean up and ensure pipeline safety across the province.

Alberta’s
aging pipeline system is challenging for the industry, but the
application of new technology is mitigating that risk, he said. “New
technology, new materials -there is so much improvement in pipeline
construction and monitoring.”

The spill will likely affect
discussions about a new pipeline to the coast, Stelmach said, “but
overall I do know that the world needs energy. We are going to get that
energy to them, and as far as I’m concerned the ERCB is doing an
excellent job.”

William Whitehead, chief of the Woodland Cree, owns a trapline that crosses the contaminated wetland.

“That’s
the main stream; it’s a little creek there,” he said. “Good thing they
had that beaver dam on there, eh? If they wouldn’t have had that beaver
dam, God knows where that oil would have flowed. Probably down to
Lubicon Lake. It’s not far from there.”

The area around Lubicon
Lake has been set aside by the province as the future reserve of the
Lubicon Lake First Nation, if their 40-year-old land claim is ever
settled.

Whitehead called on the companies involved to attend a
community meeting in Marten Lake, a tiny community that is even closer
to the spill than Little Buffalo.

“Let (people) know what they’re going to do,” Whitehead said. “Then they would feel secure.”

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Financial Post: Conservative Majority Win Energizes Sector

Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Tar Sands, , ,
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From the Financial Post – May 3, 2011

by Claudia Cattaneo

Stephen Harper’s big election sweep bodes well for Canada’s energy sector — but that doesn’t mean it will get a free pass.

While the Conservatives are now in a position to make decisions, they
are facing a strong NDP opposition with a big Quebec voice, as well as
continuing input from the large constituency of players with a say in
the energy agenda, from provincial governments to the environmental
movement.

“The worst thing the energy sector can do right now is to assume: ‘We
submit a laundry list and we get it.’ It’s not real,” said a senior
energy industry lobbyist.

“There will still be a lot of opposition influence, so things like
oil sands, climate change, are still issues. People shouldn’t think they
go away.”

Still, some immediate threats to industry expansion are off the table.

Plans to develop new markets for Canada’s oil in Asia are not likely
to be hindered by a ban on oil tanker traffic off northern B.C. coast
any time soon. During the campaign, Mr. Harper said he did not favour
formalizing the ban, which is supported by many British Columbians
worried about possible oil spills and was embraced by opposition
parties.

However, uncertainty over the Asian push remains in areas outside
federal control, such as B.C. First Nations and environmental
organizations opposition to the Northern Gateway pipeline proposed by
Enbridge Inc.

Access to Asian market is key to industry growth.

“The current markets for oil and gas produced in B.C. and Alberta are
almost entirely continental, and those markets are in trouble,” Roger
Gibbins, president and CEO of the Canada West Foundation, said in a
statement Tuesday, calling for a full public discussion over whether
local communities should be able to block West Coast access of major
resource projects.

A cap-and-trade system proposed by the NDP and the Liberals is
probably on the back burner now, although other climate change
initiatives will continue to be a priority, with the lead coming from
outside Ottawa — the United States, interest groups, provincial
governments and even industry itself.

Rick George, president and CEO of Suncor Energy Inc., Canada’s
largest oil sands developer, suggested as much Tuesday when said he
expects progress on greenhouse gases to be made on many fronts,
including industry initiatives to reduce impact on air, land and ground.

“We are not the only oil company that feels like that and that are
making big investments in R&D and making a difference,” he said in a
conference call in response to an analyst question about his
expectations on greenhouse gas legislation now that the Conservatives
have a majority.

Ottawa’s support of the oil sands will also continue, but Ontario’s
contribution to the Tory majority will likely bring a more balanced view
of oil and gas development at the cabinet table.

Some Tory moves could even upset the oil patch. The Tories are now in
a position to move forward with the elimination of the Accelerated
Capital Cost Allowance for oil sands investment by 2015, which was
proposed in the budget and is worth $490-million. The Tories also
promised increased monitoring of environmental impacts.

Also, don’t rule out greater scrutiny of foreign takeovers, as more
energy companies court partners to accelerate development of projects,
whether in the oil sands in Alberta or in shale gas in British Columbia.

Now that he can, Mr. Harper may even be persuaded to take on the
development of a Canadian energy strategy, an initiative supported by
many groups, from think tanks to environmental organizations.

The problem is whether Mr. Harper wants to go down a road where
finding common ground and real solutions may be bigger than his newfound
majority.

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Alberta pipeline leak largest since 1975

Energy and Resources, Oil&Gas, Tar Sands,
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From The Globe & Mail – May 3, 2011

by Nathan Vanderklippe

A major pipeline oil leak is the largest in Alberta since 1975, the province’s energy regulator says.

About
28,000 barrels poured out of the Plains Midstream Canada Rainbow
pipeline 100 kilometres northeast of Peace River, the Energy Resources
Conservation Board said Tuesday, four days after the spill occurred. The
spill raises new questions about the health of Alberta’s aging pipeline
system.

The spill represents 40 per cent more than the 20,000 barrels that
leaked from an Enbridge Inc. pipe last summer, in a spill that fouled a
Michigan river and cost that company hundreds of millions to clean up.
It’s bigger than the 19,000 barrels that spilled from a BP Canada line
in 1993, but smaller than a 41,000-barrel leak in 1975, on a Bow River
Pipeline Ltd. facility.

“It’s certainly a very significant leak,” said Davis Sheremata, a spokesman with the ERCB.

It’s the second major spill from the Rainbow line, whose owner is a subsidiary of publicly traded Plains All American Pipeline, L.P. (PAA-N61.55-1.43-2.27%)
In late 2006, 7,500 barrels leaked from the pipe, which travels 770 km
from Zama, Alta. to Edmonton. At the time, an investigation determined
that “stress corrosion cracking, fatigue cracking and external coating
failure caused the release.” These issues are often related to age; the
Rainbow line was built in 1966. It is designed to carry 220,000 barrels
per day; last year, it averaged 187,000 barrels per day.

After the
previous leak, operators of the pipeline were ordered to lower the
system’s pressure, increase ground surveillance and conduct internal
line inspections.

The new spill occurred in a remote forested
area, and crews had to build several kilometres of road to access it.
The oil is largely contained on the 30-metre-wide pipeline right-of-way,
the regulator said, although some has escaped into a nearby wetland.
None has reached running water. The nearest residence is seven
kilometres away, and the ERCB noted that pipeline failure rates had been
in decline.

Critics say Alberta’s aging pipe network is a cause
for concern. The Plains spill comes within a week of a leak on a gas
line near Fox Creek, that killed a maintenance worker who inhaled deadly
sour gas, which is laced with hydrogen sulphide. In late April, another
leak on the Trans Mountain pipeline system, which is also an aging
pipeline, spilled a small amount of oil into an unnamed creek.

The
Rainbow spill was detected by Plains Midstream crews early in the
morning on April 29, the ERCB said. The Alberta regulator does not
assess fines based on the amount spilled.

“What we do is we have
an enforcement ladder ranging from fairly minor infractions, where we’ll
increase audits and inspections, right up to shutting a facility in,”
he said. “When you stop a company being able to generate revenue and
employ people, we find we get results very quickly with them taking
steps to get themselves back in compliance.”

It’s not clear what
punishment, if any, may be used against Plains Midstream, whose outage
has caused customers such as Penn West Petroleum Ltd. to truck and store
crude, Bloomberg News reported.

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BREAKING NEWS: Alberta pipeline sprouts ‘significant leak’

Energy and Resources, Oil&Gas, Tar Sands,
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From the Calgary Herald – April 30, 2011

by Reuters

A 200,000 barrel per day oil pipeline belonging to a unit of Plains
All American Pipeline LP ruptured on Friday, spilling hundreds of
barrels of oil, regulators said.

Plains’ Rainbow pipeline, which
runs from Zama in northwest Alberta 770 kilometres south to Edmonton,
sprung a leak at 7: 30 a.m. local time.

“It’s not a small leak,”
said Davis Sheremata, a spokesman for Alberta’s Energy Resources
Conservation Board, which regulates pipelines in the province.

“It’s a significant leak, in the hundreds of barrels.”

The leak occurred 100 km northeast of Peace River, the regulator said.

The
ERCB said the line was shut down and the company and authorities were
working on cleanup efforts. The regulator said the spill was 300 metres
from flowing water and seven kilometres from the nearest residence.

It’s
the second leak from an Alberta pipeline in a week. Kinder Morgan
Energy Partners’s 300,000 bpd Trans Mountain oil pipeline was shut for
five days beginning on April 22 after a small leak was spotted on the
line’s right-of-way 150 km west of Edmonton.

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