Nexen handed fines totalling $750,000 over pipeline spill
Incident at Long Lake facility in 2015 among the largest in Alberta’s history
Alberta’s energy watchdog ordered Calgary-based oil company Nexen to pay a hefty fine following a 2015 pipeline spill near Fort McMurray.
The subsidiary of China’s stateowned oil company CNOOC Ltd. was fined $460,000 after pleading guilty in provincial court to one count under the Environmental Protection and Enhancement Act. It was also levied a federal fine of $290,000.
The spill was one of the largest in Alberta’s history, said Jim Ellis, president and CEO of the Alberta Energy Regulator (AER), in a Friday news release.
“A number of landbird, shorebird, waterbird and waterfowl species protected by the Migratory Birds Convention Act use and were observed in the impacted area and adjacent unnamed lake,” said the agreed statement of facts.
The pipeline responsible for the spill was associated with the company ’s Long Lake oilsands facility, located about 45 km southeast of Fort McMurray, the release said. The spill released 5,000 cubic metres of bitumen emulsion over a 21,900-square-metre area.
The company’s statement said the leak began June 13. Although the spill was visible from satellite imagery by July 3, it wasn’t until July 15 that Nexen realized there was a problem when two employees spotted it while doing work in the area.
The double-walled pipeline — designed to carry raw bitumen from the ground to a processing plant — had been installed a year earlier. The pipeline, which used a relatively new technology, operated at 100 degrees Celsius in order for the thick bitumen to flow.
Nexen said the release went undetected because a computer failed to sound an alarm.
“This failure was unknown to Nexen prior to the release,” says the statement. “Nexen had no written procedure in place to check for the type of failure that occurred.”
The pipeline remains out of operation.
“The pipeline ... will remain suspended until Nexen can demonstrate to us that the company can operate it safely,” Ellis said.
“Over the last three years, we’ve kept a close eye on Nexen’s operations to bring the company back into compliance.”
The bulk of the provincial fine will be directed to creative sentencing, including $220,017 for a new learning centre that focuses on limiting the effects of pipeline spills on wetlands. An additional $220,000 will expand on an environmental sciences degree program for Indigenous youth, the release said.
The federal fine of $290,000, after the company pleaded guilty to charges under federal regulations, is to go into an environmental damages fund for migratory bird habitat.
Nexen will require written approval from the energy watchdog to operate the pipeline once its safe.
Nexen had no written procedure in place to check for the type of failure that occurred.