Alberta Energy Regulator fines Calgary company for 48 day oil pipeline leak

EDMONTON—A Calgary-based company has been fined over a pipeline breach that spilled 537,000 litres of oil emulsion in northern Alberta over 48 days.

The Alberta Energy Regulator says Pengrowth Energy Corporation failed to properly detect, report and deal with the spill near Red Earth Creek.

The regulator says the mixture of oil and oilwell salt water leaked between Dec. 1, 2013, and Jan. 18, 2014, before the company became aware of the spill.

Pengrowth (TSX:PGF) has been fined $250,000 for breaching Alberta environment and public lands laws.

Rob Borth, the regulator’s director of enforcement, says in a report that Pengrowth lacked knowledge, training and management oversite of the pipeline.

He says those shortcomings included being able to detect leaks.

“Aggravating factors include indicators of the poor performance and operation of the pipeline were not well understood, incorrect assumptions were made by field staff and procedures were not followed,” says the report posted on the regulator’s website Thursday.

“I find Pengrowth lacked diligence concerning the failure to report the release, failure to remediate and for the loss or damage to public lands.”

Officials at Pengrowth were not immediately available for comment.

The company’s website says Pengrowth is an intermediate Canadian oil and natural gas producer with more than 27 years of operating history.

The regulator says the company has since cleaned up the area affected by the spill.

In 2013 the Energy Resources Conservation Board, the regulator’s predecessor, issued an enforcement action against Pengrowth over a 2011 pipeline spill near Swan Hills that sent about 117,000 litres of oily water into a creek.

The company was cited for operating the pipeline for more than a year under faulty construction practices before it failed.

The ERCB directed the company to immediately modify its construction management system to include clear definitions of roles, responsibilities, experience, and expectations of anyone involved in pipeline design, construction and inspection.