AER says more spill safeguards needed before Primrose returns to normal

CALGARY – The Alberta Energy Regulator says it has a better idea now of what went wrong at Canadian Natural Resources Ltd.’s (TSX:CNQ) Primrose oilsands development in northeastern Alberta, where a mixture of bitumen and water was found to be oozing to the surface more than a year ago.

A “causation review” completed last month by the company, along with a technical review of that work by an independent panel released Tuesday, point to the problems being twofold: faulty wellbores and the manner in which CNRL injects steam underground, the AER said.

It won’t be business as usual at Primrose for a while yet, said Jim Ellis, who heads up the provincial energy watchdog.

“Our assessment of the reports leads us to believe that these flow-to-surface events can be prevented if proper mitigation measures are put in place,” Ellis said in a release.

“That said, the AER is not prepared to approve a return to full operations at these sites until all potential risks are addressed and proper requirements are in place to avoid a similar incident. This will require a gradual, step-by-step approach that allows us to manage those risks.”

An emulsion of bitumen and water was found to be leaking from four sites at Primrose in May 2013, affecting 20.7 hectares.

The AER says 1.2 million litres of the substance has been recovered and that the spill has been contained. Cleanup efforts are continuing.

CNRL has said repeatedly it believes the oily fluid made its way to surface through old wellbores at Primrose. However, it has said it’s open to other possibilities and it outlined other potential causes in its review.

The independent review suggested CNRL’s strategy of pumping large volumes of steam at high pressures into wells that are close together was a “fundamental cause” of the leaks.

AER spokesman Bob Curran said the regulator is continuing to investigate and aims to have a final report out sometime this fall.

At Primrose, CNRL uses an oil extraction method known as high-pressure cyclic steam stimulation. Steam is pumped into an oilsands reservoir through a well and left to soak for a while. Then, the liquefied oil is drawn to the surface through the same well.

The report raises questions over whether that technology should even be allowed at Primrose, said Erin Flanagan, an analyst at the Pembina Institutue, an environmental think-tank.

“Given these findings, we urge the AER to broaden the technical review to include the entire CNRL high-pressure cyclic steam stimulation project. This will help ensure that the public and the environment is protected from the risk of similar accidents.”

Greenpeace campaigner Mike Hudema agrees a closer look at the technology is needed.

“The Alberta government must acknowledge finally, that it doesn’t know enough about this technology to ensure events like this don’t happen again. This should trigger the launch of the broader safety review of in-situ tar sands technology that dozens of First Nation, landowner and environmental groups have been calling for.”

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