AER fines oil company almost $438K for leak that went undiscovered for 15 months

AER fines oil company almost $438K for leak that went undiscovered for 15 months

Regulator says leak was discovered by livestock farmer, not company

The Alberta Energy Regulator (AER) has fined a Calgary-based oil and gas company nearly $438,000 for an oil emulsion leak in western Alberta that lasted more than a year.

The AER announced on July 2 that it issued an administrative penalty decision against Entrada Resources Inc. because it “released or permitted the release of oil emulsion” in Clearwater County.

According to the regulator’s penalty assessment, the leak is estimated to have spanned 15 months, from about June 25, 2022, to Sept. 28, 2023, resulting in a large amount of soil contamination and possible impacts to some local livestock.

“It obviously was significant enough to warrant a pretty significant fine,” Jason Unger, executive director of the Environmental Law Centre in Alberta, told CBC News.

Entrada declined to comment on the matter.

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The AER penalized Entrada for three “major” contraventions under the Environmental Protection and Enhancement Act (EPEA) and one moderate contravention of the Pipeline Rules.

In its announcement, the regulator said Entrada did not report the spill as required under the EPEA and failed to take reasonable remedial measures as soon as the company “ought to have become aware of the release.”

The leak was caused by external corrosion that was not detected due to “Entrada’s failure to properly conduct an annual pipeline right-of-way inspection” in 2022, an AER spokesperson told CBC News on Tuesday in an emailed statement.

According to the AER penalty assessment, the leaked oil emulsion is known to be hazardous. Components of the substance, such as benzene, are known to be carcinogenic and can be highly toxic in the environment.

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The regulator said evidence exists that livestock came into contact with the oil emulsion, and the reproductive yield of the exposed animals may have been negatively impacted.

Additionally, leak remediation efforts required clearing 6.4 acres of land, including more than 26,000 square metres of trees, and disposing more than 61,000 tonnes of soil to a landfill, according to the assessment.

The AER learned of the leak near the end of July 2024, some time after it was first discovered by someone using the affected area to rear livestock, the regulator’s assessment says. The report didn’t specify the exact date when that person found the leak.

Satellite imagery from June 2022 clearly shows black oil staining and distressed vegetation in “an area that correlates” with the affected area, the assessment says. But the regulator is concerned impacts may go back even further, with satellite imagery showing signs of affected vegetation as far back as July 2019.

“That it was a member of the public, and not Entrada, that discovered the release is an aggravating circumstance,” the assessment said.

Unger, of the Environmental Law Centre, said this incident highlights that one of the challenges facing the AER is its reliance on individual operators to monitor remote energy infrastructure.

“How do you have enough eyes on the ground to identify those things, like a leaking pipeline, in a timely fashion, and make sure remediation happens?” Unger said.

He suggested using high-tech monitoring systems, such as satellites, could help ensure future spills like this are identified sooner.

With files from Jessica Campbell