AER says Primrose leak result of design problem
Board refuses to end restrictions
Bitumen emulsion leaks to surface from the Primrose oilsands play near Cold Lake are preventable, says the Alberta Energy Regulator, but it won’t immediately lift limits placed on the producer.
The AER on Tuesday released results of an independent technical review of a causation report submitted June 27 by operator Canadian Natural Resources Ltd. looking at incidents in the east and south sections of the company’s Primrose project.
A series of four spring 2013 leaks affected 20.7 hectares and an ongoing cleanup effort has so far recovered about 7,400 barrels (1.2 million litres) of bitumen emulsion, which continues to ooze out of the marshy ground.
“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,” AER president and CEO Jim Ellis said in a news 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.”
The AER imposed restrictions on steaming activity at Primrose East and within one kilometre of Primrose South in June 2013.
Canadian Natural initially blamed the seepage on well bore failures but conceded in its June report to four conditions that enabled or significantly increased the probability of a flow-to-surface event.
The technical review determined the “enabling factors” were Canadian Natural’s strategy to “inject large volumes of steam at fracture pressure in closely spaced wells,” as well as the failure of old well bores in the area.
The Primrose field is produced using high pressure cyclic steam stimulation or CSS, where wells are steamed for a period of months to mobilize the heavy oil, then the steam is halted while the oil is pumped to surface.
Chris Severson-Baker of the environmental Pembina Institute said the third-party report zeros in on Canadian Natural’s design as the cause of the seepage, rather than its contention initially that it was a mechanical failure.
“This third-party panel really says the most likely cause was the design and the way it was being operated by CNRL, which is consistent with what the ERCB found when it investigated the 2009 blowout,” he said.
“It suggests there is a more fundamental problem with this project and with the approach of using high-pressure cyclic steam stimulation.”
He said he is impressed, however, with the degree of transparency from the AER — its predecessor, the Energy Resources Conservation Board, didn’t release its investigation into the January 2009 release of bitumen emulsion until early in 2013, after operations had already returned to normal.
In an e-mail response, Canadian Natural spokeswoman Zoe Addington said the company will not apply to resume high pressure steaming at Primrose East until a final AER report is completed.
“While the causes have been identified, a final report will be prepared that includes a review and discussion of all data required as well as risk mitigation,” she said.
She said Canadian Natural is not changing its reserve estimates for Primrose because it believes its life cycle recoveries will be substantially unchanged.
“We have reduced steam volumes, enhanced monitoring, and if we do see infrequent subsurface releases from the Clearwater (formation) into the Grand Rapids, we have an enhanced response,” Addington wrote, responding to a question about what Canadian Natural is doing differently in view of the seepages.
AER spokesman Bob Curran said there is no timeline as yet for when Canadian Natural can return to developing the field but a final report is expected in the fall.
“We haven’t completed the investi- gation ... We have to be very comfortable that mitigation is in place and we have to be confident it is going to address those issues before we allow full return to operations.”
Curran said the geology in Canadian Natural’s area has “distinct characteristics” from other operations such as Imperial Oil Ltd.’s high-pressure CSS operations at Cold Lake and a general review is not needed.