Canadian Natural Resources Ltd. (CNRL) says the mechanical failure of several wellbores is the cause behind four sites at Primrose East and South seeping bitumen emulsion to the surface for at least the past seven weeks.
The company stated last week that the damaged area had been contained and that clean-up efforts are ongoing.
CNRL estimates approximately 6,300 barrels of bitumen emulsion (close to one million litres) have been collected from the 13.5 hectares of impacted land.
“Canadian Natural is confident the cause of the bitumen emulsion seepage is due to mechanical failure of wellbores in the vicinity of the impacted location,” said President Steve Laut in a conference call on July 31.
“We have a pretty good idea of the likely wellbores. The one well that we are looking at was an old well drilled by a previous operator in the area, in like 1997. That is what we think the most likely culprit is,” said Laut.
The Alberta Energy Regulator (AER) is on site with CNRL officials aiding in the ongoing investigation and mitigation efforts.
“The AER will confirm their conclusions in an investigative report,” said the regulator's spokesperson Cara Tobin. “We look forward to receiving their evidence and data that will aid in that process.”
The rate of bitumen emulsion seeping at all four sites has declined but is expected to continue seeping for “a period of time”, according to CNRL. The company estimates the seepage from all four locations to be less than 20 barrels (or 2,400 litres) a day.
After doing aerial and ground surveillance checks across the sites, the company reported having found no additional bitumen emulsion seepages throughout the Primrose operations area.
The company acknowledged an increase in the number of animal fatalities as a result of the incident, bring the totals to 16 birds, seven small mammals and 38 amphibians dead.
Laut says CNRL's focus will be to review all wellbores on the Primrose sites to ensure incidents like this do not happen in the future.
“We now are taking a further review of all wellbores to locate potential wellbores that are technically thermally compliant, that may have had issues during cementing or other concerns,” said Laut. “The vast majority of cases are repairable, and if the wellbore is not repairable, steaming strategies can be modified to prevent these incidents from happening in the future.”
CNRL estimates clean-up cost to be around $40 million dollars, with another $20 million expected to be spent drilling new monitoring wells.
Mike Hudema, a Greenpeace Climate and Energy campaigner, is baffled by CNRL's inability to stop the on-going seepages and feels the company needs to be held responsible.
“A company should only get so many chances before the government steps in and says ‘no more'. Given the four current on-going spills and CNRL's poor spill track record, CNRL has had more than its fair share (of chances),” said Hudema.
“The Alberta Energy Regulator should revoke CNRL's approval at this site and review and increase safety measures for in-situ sites throughout the province. It's time Alberta's energy regulator actually stood-up for the public interest. Revoking CNRL's approval would be a good and justified start.”
Greenpeace Canada claims it has analyzed the data on spills compiled by Global News and found that CNRL has experienced more spills than any other company operating in the oilsands. According to Greenpeace Canada, in the last 10 years, CNRL has reported 2,168 spills, well ahead of the next largest offender Penn West Petroleum (1,474 spills).
The AER suspended CNRL's steaming operations at the Primrose East site earlier in the year, as a result of three releases of bitumen emulsions to the surface reported on May 20 and June 8. The AER took further measures after the fourth release was reported on June 24 at Primrose South. Steaming operations have been suspended for all wells within a one-kilometer radius around the Primrose South incident, effecting roughly 20 wells, according to an earlier AER press release.
Tobin says the company needs to collect data and evidence from CNRL and verify the information before determining their next step.
“We wouldn't determine enforcement until we have enough evidence to back up the potential enforcement. So typically that is at the end of an investigation when we would issue a report that would include an enforcement action,” said Tobin. “However it is not unheard of for us to issue enforcement action as we gather that evidence and feel that it is necessary.”
CNRL responded to several concerns regarding its shareholders during the conference call July 31, stating the incident is expected to have minimal impact on the company's production guidance for 2013 and 2014.
“July production will come in at about 120,000 barrels per day. As a result, productions guidance for 2013 will remain unchanged at 100,000 to 107,000 barrels per day,” said Laut. “We expect 2014 to be in line with 2013 about 10,000 less barrels a day than originally targeted.”
