Murphy Oil fined $172,500 for spill near Peace River
Investigation concludes company failed to follow pipeline safety procedures
CALGARY Murphy Oil has been fined $172,500 by the Alberta Energy Regulator for a 2015 pipeline spill at its Seal heavy oil site southeast of Peace River.
The spill — which went undetected from approximately Jan. 15 to March 1, 2015 — released about 1.4 million litres of condensate into the environment and caused damage to soil, vegetation and water on public lands, the AER said. Condensate is a light oil used to dilute heavy oil to help it flow in a pipeline.
The Arkansas-based company has since repaired the pipeline and remediation work on the affected area continues.
The AER’s investigation concluded Murphy Oil failed to follow its own written procedures with respect to pipeline safety. Though the company’s manuals call for it to annually evaluate its pipelines for signs of internal corrosion, the regulator found Murphy Oil failed to complete the requirement for three consecutive years. The regulator also found the company failed to perform regular maintenance on its leak detection system.
In addition, according to the AER, Murphy Oil did not provide its employees with proper training about its leak detection procedures. It concluded Murphy Oil staff lacked sufficient knowledge to interpret warning signs such as elevated meter readings, adding the company “ought to have known” the leak occurred and caused unnecessary damage to the environment by not taking remedial action sooner.
Craig Sinclair, director of health, safety and environment for Murphy Oil’s Calgary-based Canadian operations, said the company has agreed to pay the fine and is working to ensure similar leaks don’t occur in the future.
“We’ve made significant changes,” Sinclair said, adding that Murphy Oil is performing pipeline integrity checks more frequently and is investing in more training of personnel assigned to conduct those checks. Some repairs were made to the five-year-old pipeline but the company has since purged and abandoned it, using other pipelines to ship condensate from one part of its Seal heavy oilfield to another, he said.
The fine is one of the largest the AER has issued for a pipeline spill since it was formed in 2013.
According to an AER database, the largest financial penalty for a pipeline spill was $250,000 last year against Calgary-based producer Pengrowth Energy for a leak of about 540,000 litres of oil emulsion. That spill near Red Earth in northwestern Alberta went undetected for 48 days.
In his report, AER director of pipelines Ron Wagener acknowledged Murphy Oil has initiated significant changes at its Seal Lake operations and other sites in Alberta as a result of the spill, including improved pipeline leak detection systems, regularly scheduled training and increased management presence in the field.