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Nexen feeling regulator’s wrath
The Alberta Energy Regulator has come down heavily a month after Nexen was involved in one of the largest on-land oil spills in North America by ordering the company to shut down 95 pipelines from its Long Lake oil sands project in northern Alberta.
Wholly owned by China National Offshore Oil Co., Nexen has been accused of violating pipeline maintenance and monitoring rules.
The regulator said it has received information that pointed to a failure to comply with the rules during its investigation of the July spill which released 31,500 barrels of emulsion, comprising a mixture of bitumen, water and sand, from Long Lake.
“Given that this company has already had a pipeline failure at this site, the AER will not lift this suspension until Nexen can demonstrate that they can be operated safely and within all regulatory requirements,” Alberta Energy Regulator President and Chief Executive Officer Jim Ellis said in a statement. “We will accept no less than concrete evidence.”
Penalty harsh There is no record of such a harsh and sweeping penalty being applied in the past by the government agency.
An AER spokesman said the regulator is aware the closures will have an impact on Long Lake production, but added that was “not a consideration when we issued an endorsement order.”
He said the overriding purpose was to gain assurances that the pipelines were capable of operating in compliance with regulations.
The AER is also delving into records to determine how far back operational problems extend.
The latest order applies to pipelines that carry fresh water, salt water, crude oil, bitumen and natural gas for the steam-assisted process of extracting raw bitumen at Long Lake.
Nexen, which apologized for the July spill, has yet to disclose how much its production will be affected.
It said only that the company is “preparing to comply with the AER’s order as we work to compile the necessary information and documentation.”
Nexen said it “voluntarily disclosed all non-compliances primarily related to documentation of maintenance activities.”
Greenpeace spokesman Mike Hudema said the enforcement order shows the Alberta government is finally “getting tough” on breaches of pipeline regulations.
“We hope this is just a first government step into a much longer look into Alberta’s mounting pipeline problems. Our communities deserve no less,” he said.
- Gary Park
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