Report on oil spill shows Husky Energy delayed shutting down pipeline
SASKATOON Crude oil flowed into the North Saskatchewan River from a Husky Energy Inc. pipeline for more than seven hours before it was shut down for scheduled maintenance early on July 21, according to the Saskatchewan government’s investigation into the 225,000-litre spill.
The Calgary-based company did not immediately halt the flow of oil through the pipe despite alarms from its leak detection system, and it is now up to Saskatchewan Ministry of Justice prosecutors to determine if charges are warranted, the province says.
“I am deeply concerned about this type of incident,” Energy and Resources Minister Dustin Duncan told reporters in Regina on Thursday. “I think our actions to date and going forward, I believe, show that we’ve taken this very seriously.”
The province’s report won’t be released until after prosecutors complete their review, but details released this week fill in gaps in Husky’s investigation, which attributed the spill to ground movement but was largely silent on the timeline and its response.
The government learned of the spill at 8:30 a.m. on July 21 from a private individual, who saw oil on the river while crossing the Toby Nollet Bridge on Highway 21 east of Lloydminster. Husky informed the province of the spill about 90 minutes later.
Its investigation found leak detection systems on the 19-year-old pipeline notified Husky employees before the spill was detected, Ministry of the Economy assistant deputy minister Doug MacKnight told reporters on a conference call Thursday morning.
MacKnight declined to provide additional details.
There are “varieties of reasons” why leak detection system alarms sound, but it should be incumbent on companies to verify “as quickly as possible” whether oil has been released and shut down the pipeline in question, Duncan said.
It remains unclear whether Husky will face regulatory charges under the province’s environmental protection or pipelines acts, which carry maximum fines of $1 million per day and $50,000 per day, respectively, MacKnight said.
Husky spokesman Mel Duvall said in an email to Postmedia News that the government’s summary “appears to be consistent” with Husky’s investigation and the findings of the third-party engineering firms it contracted to look into the spill.
Duvall said the company has already had experts examine its pipelines crossing rivers and near major cities, and it plans to address geotechnical risks and limit the time it spends assessing data before shutting down pipelines in the event of an alarm.
Asked about the Ministry of Justice review, Duvall limited his response to, “We respect that there is a process underway.”
About 15,000 litres of crude remains unaccounted for, and work to assess the effects of spring breakup on the remaining oil is expected to begin next month, Ministry of Environment assistant deputy minister Wes Kotyk told reporters on the call.
In the weeks following the spill, the province rushed to examine 125 major pipeline river crossings. Late last year, it introduced new legislation aimed at beefing up its pipeline regulations. That legislation is expected to be passed this session.
The Ministry of the Economy’s regulatory regime has been sharply criticized by the provincial auditor, who blasted the province for failing to implement seven safety recommendations, and the Saskatchewan NDP, which wants an arm’s-length pipeline watchdog.
On Thursday, the government said it is launching a “compliance audit of the integrity management programs” of companies that operate pipelines that cross major waterways, and that it will work with industry to develop new pipeline crossing standards.
“It’s fair to say, of course, that we’ve learned a lot through this investigation,” MacKnight said.
He declined to comment on whether a more robust pipeline regulatory regime could have prevented the Husky spill this summer.
The company said earlier this year that the total cost of the spill was $107 million as of Dec. 31.
MacKnight said Thursday the province recently submitted an invoice for “just over” $1.1 million for the costs it incurred up to the end of last year.