Easier to contain rupture than fallout

Nexen has contained the spill from a ruptured oilsands pipeline but managing the fallout will be another matter.

The company is still trying to determine why a double-walled pipeline installed less than a year ago “burst” and spilled about 31,500 barrels of water, oil and sand into the muskeg near its Long Lake oilsands project in northern Alberta.

With pipeline integrity one of the issues at the heart of the national discussion about the future growth of the oilsands — along with global climate change — the timing for what is one of the largest spills by the oil industry in Alberta could hardly have been worse.

“We are deeply concerned with this,” Ron Bailey, Nexen’s senior vice-president of Canadian operations, told a news conference Friday. “This is a modern pipeline. We have pipeline integrity equipment, some very good equipment. Our investigation is looking through exactly why that wasn’t alerting us earlier.”

The spill, about one-third of it crude oil, was discovered by a contractor walking the pipeline right-of-way Wednesday afternoon.

The “root cause” of the incident is yet to be determined, Bailey said.

The rupture, which occurred despite advanced monitoring and fail-safe systems, will undoubtedly become a case study for an industry preoccupied with safety given the unprecedented public scrutiny over the efforts to build new pipelines.

The ramifications will undoubtedly extend far beyond Nexen, a subsidiary of Chinese state oil company CNOOC, and the remote site southeast of Fort McMurray.

Environmental groups had a field day suggesting it is evidence even the newest pipelines aren’t safe despite industry statistics that 99.99 per cent of the products carried by the extensive underground network across the country are delivered without incident.

Nexen has shut in about 9,000 barrels a day of oil production with the pipeline shut down.

At the Council of the Federation meeting in St. John’s, N.L., Alberta Premier Rachel Notley took time from the signing of the new Canadian Energy Strategy to confirm she’s being updated regularly about the spill that has reinforced concerns about oil and gas development. “The timing is not awesome,” she said.

Energy Minister Marg McCuaig-Boyd has been in contact with Nexen since the spill and the Alberta Energy Regulator has started its investigation.

Notley said she was “troubled” by what she called an “unfortunate” accident. She acknowledged the spill was discussed by the premiers at their meeting but said they agreed pipelines remain the safest way to transport oil. She applauded the development of the much-debated energy strategy but cautioned it is a starting point for provinces to move forward co-operatively more than a green light to build new pipelines.

The Nexen spill, with enough liquids to fill two Olympic-sized swimming pools, is a far more immediate concern for Notley.

“We’ll be doing an investigation into what went wrong and ... whether everything was done to catch it as soon as it could be, as well as to prevent it at the outset,” Notley said.

Environmental groups were adamant about the lesson that Notley and her fellow premiers should take from Nexen’s spill.

“Canada’s premiers should see this as yet another opportunity to show leadership in transitioning from an outdated fossil fuel economy,” the David Suzuki Foundation said.

The oil industry has lobbied for years for new pipelines from the oilsands to tidewater ports on Canada’s east or west coasts to increase the access to global markets — and reduce price discounts on landlocked Canadian crude — for the growing production. New pipelines have been held up by intense opposition from an alliance of environmentalists, First Nations and politicians concerned with issues from climate change and the rights for aboriginal people to public safety.

Nexen, clearly working to be seen as a good corporate citizen, said repeatedly it wants to be “as transparent as possible” about the perplexing pipeline rupture and acknowledged it’ll take “some time” for it to complete the cleanup of the Long Lake spill.

The debate over oil and pipelines, meanwhile, is bound to continue far longer.

Stephen Ewart is a Calgary Herald columnist. sewart@calgaryherald.com twitter.com/stephen_ewart