JIMMY JEONG

Spills and Leaks

Just how safe are Alberta’s oil and gas pipelines?

By Tadzio Richards

Alberta is a cyborg landscape. Beneath the surface of the land, over 400,000 km of pipelines course through the province, a steel capillary network buried a metre or two deep. Gathering lines collect raw oil and gas from wells, connecting to storage tanks, pumping stations, processing plants and larger feeder pipes that lead to superhighway transmission pipelines exporting crude oil and other hydrocarbons out of province. “The invisible industry,” as ex-premier Ed Stelmach called the pipeline network, forms an ever-growing infrastructure pumping quietly under muskeg and forest, foothills, waterways and farmland. It’s out of sight and usually out of mind, even around Medicine Hat, Brooks, Red Deer, Drayton Valley and Grande Prairie, areas of the province so dense with pipe they look like paint splotches on Alberta Energy’s map of provincial pipelines.

The safety of those pipelines is currently under scrutiny. At a time when the pressure is on to pump as much oil out of province as fast as possible, concerns about pipeline leaks and ruptures are slowing down environmental approvals for new pipelines across North America. In 2013, questions about the safety of Alberta’s oil and gas pipelines are creating uncertainty as to the future of the provincial and federal economies.

The province of Alberta faces a financial challenge. In the 2013 budget, the government blamed a $6-billion shortfall on falling oil revenues. It’s not that less oil is being produced. Production rates for Alberta crude oil and bitumen combined have never been higher, and the Energy Resources Conservation Board (ERCB) estimates that, compared to 2012, production by 2022 will have risen from 2.5 to 4.2 million barrels a day. The problem is that, compared to West Texas Intermediate, the North American benchmark for oil, Alberta’s oil sands bitumen currently fetches a low price. The widened price differential means provincial revenues are less than expected. No new taxes or tax increases were announced in the last budget, however, and the governing Conservatives refuse to increase oil and gas royalty rates. That means one of the few solutions left for getting out of the red is to sell more oil and gas to the US and possibly to Asia, at best getting a higher price for the heavy crude, and at worst selling the cheap stuff at a higher volume—an Albertan spin on the Walmart model.

Problem number one for this plan is that Alberta’s oil pipelines are pumping at maximum capacity. To pump more oil, more pipelines have to be built. Since her election in April 2012, Premier Alison Redford has actively promoted pipeline expansion, travelling frequently to the US and China to promote Alberta oil and new pipelines from Alberta. It’s a sales pitch that may or may not yield results. In the months ahead, the US State Department will say yes or no to TransCanada’s proposal to build the Keystone XL pipeline to the US Gulf Coast. In Canada, by the end of the year, the National Energy Board will rule on Enbridge’s Northern Gateway proposal for a pipeline to Kitimat, BC.

Problem number two for the pipeline expansion agenda is that in order to get social licence for new pipelines, the industry in general needs to be seen as safe, with minimal environmental impact and maximum economic benefit. In spring 2012, multiple pipeline spills garnered negative media coverage. Pipeline safety became a prominent public issue. In May a Pace Oil & Gas pipeline spilled 5,000 barrels of oil near Rainbow Lake in northwestern Alberta. In early June a Plains Midstream pipeline ruptured into the Red Deer River and spilled 3,000 barrels downstream from Sundre. National print and television media showed images of oil slicks on Gleniffer Lake, a popular fishing and boating reservoir and a source of local drinking water. Less than two weeks later, near Elk Point, in east-central Alberta, 1,400 barrels of heavy crude leaked from an Enbridge pipeline pump station.

Another jolt of negative pipeline news hit in early July 2012, when the US National Transportation Safety Board (NTSB) released their findings on the 2010 spill of more than 20,000 barrels of oil from an Enbridge pipeline into the Kalamazoo River in Michigan. Enbridge pipeline operators took 17 hours before they shut down the pipeline. NTSB chairman Deborah Hersman was scathing. “When we were examining Enbridge’s poor handling [of] their response to this rupture, you can’t help but think about the Keystone Kops,” she said, in announcing the NTSB’s findings on the spill. “Why didn’t they recognize what was happening, and what took so long?”

July 2011- Little Buffalo band member Melia Laboucan-Massimo scoops by oil from near the site of a Plains Midstream spill.

July 2011- Little Buffalo band member Melia Laboucan-Massimo scoops by oil from near the site of a Plains Midstream spill. (CP: Joe Whittle)

In Alberta, calls for an independent review into pipeline safety became difficult for the government to ignore. Over 50 different groups—including the Alberta Surface Rights Group, Public Interest Alberta, several First Nations, the National Farmers Union, Greenpeace and the United Nurses of Alberta—signed a letter asking Redford to formally look into pipeline safety. Environment Minister Diana McQueen initially deflected the concerns, saying the government would wait to decide whether a broad review was necessary until after the ERCB completed an investigation into the Red Deer River spill. ERCB investigations can take two years to complete. The outcry grew louder. In July 2012, Energy Minister Ken Hughes asked the ERCB to hire an independent third party to do a safety audit on Alberta’s pipelines.

The review was due at the end of 2012. G10 Engineering, the third party, completed the review on time. The ERCB then wrote a response to the study before delivering it to the Energy Minister by March 31, 2013. A month later, Hughes refused to immediately release either report. “It’s important to have the full context,” he said. “We’ll release it in the fullness of time.”
“A good outcome would be to have a complete review of all pipeline systems in Alberta,” said Don Bester, when I called last spring to ask what he hoped would come of the safety review. Bester is president of the Alberta Surface Rights Group, a landowner association. Landowners legally can’t say no if a pipeline company wants to cross their land, and pipeline safety has been a long-term and growing concern for farmers and ranchers. “It’s up to the provincial regulatory body to do some investigation into these older pipelines and every pipeline that crosses a river,” he said. “Some of these older pipelines are 50 to 60 years old. They must have lost their integrity to ship product. If we have to make the companies replace them, so be it.

“But it’s hard to comment without seeing the document,” he added. “Why so long to release it? I trust Hughes like I trust a snake in my bed. You can quote me on that.”

The debate over pipeline safety in Alberta exists somewhere in the gap between propaganda and fact. It’s a gap inhabited by clashing perspectives, a dataset that can be interpreted several ways, and multiple forms of silence. It’s not easy to come to a definitive conclusion. At least that’s what I found when I looked into it this spring.

Take the recent spills into the Red Deer River, for example. On June 15, 2008, high waters downstream from Sundre exposed a four-year-old pipe owned by Pembina Pipelines, bending it to the breaking point and spilling 177 barrels of oil into the river and Gleniffer Lake. An ERCB spokesman called the break “a very, very rare incident” that could not have been foreseen. Four years later, during a flood on June 7, 2012, a 46-year-old pipeline owned by Plains Midstream ruptured in the middle of the river within three km of the Pembina spill.

On June 8, 2012, the morning after the spill, Glenn Norman, a farmer and rancher near Red Deer and a member of the Alberta Surface Rights Group, drove up to Sundre to see the land and river downstream from the spill. “We came across a backwater with probably three feet of oil in it,” he said. “That should have been teeming with life. But there were no mosquitoes, no frogs, no birds, just absolute silence.”
Nearly a year later, Linda Wallace, the economic development officer for the town of Sundre, said the community is looking to move on. “We want as quickly as possible the message to be that it’s business as usual,” she said, noting that the spill was downstream from town, but the whitewater rafting and other outdoor activities that draw tourists are all upstream towards the Rocky Mountains. “Not to forget there were people impacted in much more serious ways downstream,” she said, “but from our perspective, the town, it was over as soon as it happened. The more people forget about it, the better it is for Sundre. It’s a past issue; we don’t want to discuss it anymore.”

In relative terms, the June 7, 2012, spill of 3,000 barrels of sour crude was not one of Alberta’s largest. But it did attract a lot of attention. Quoted in The Globe and Mail, Gord Johnston, a landowner immediately downstream from the spill, said, “My place is destroyed.” Neighbour Ila Johnson told CBC: “The oil is all over the lower part of our property. I’ll have to leave home.” In 2013 many affected landowners are no longer talking. People have moved out of their homes, including some who were quoted in initial media reports. Class action lawsuits have been launched against Plains Midstream and the government, and lawyers have instructed many landowners not to talk to the press.

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June 2013—This spill of 9.5 million L of oil-extraction wastewater, near Zama City, killed roughly 42 hectares of boreal forest. 

The ERCB began investigating the cause of the spill, but the regulator has not released a report. Alberta Environment and Sustainable Resource Development (ESRD) continues to research the spill’s long-term ecological impacts. Initial tests found that toluene, a neurotoxin, passed through water treatment plants without detection. The carcinogen benzene was found upstream from Gleniffer Lake and the Dickson Dam at levels exceeding drinking-water standards. Later tests did not find dangerous levels of hydrocarbons in the water, though Alberta Environment did put a ban on harvesting fish from the Red Deer River and all tributaries upstream from the dam until at least the fall of 2013.

On June 8, 2012, the day after the spill, Premier Redford gave a press conference at Dickson Dam, where Plains Midstream crews were working to contain the oil some 40 km downstream from the spill. “We do always want to ensure that we’re balancing economic development, environmental sustainability and social outcomes,” said Redford. “And there’s no doubt that, when we have economic development, there are certainly in some cases impacts.” Quoted in the news again the next day, Redford said the spill was “actually an exception.”

The assertion is debatable. What’s clear is that when a spill does occur, real people suffer real consequences. In the absence of publicly available and independently verified research to provide clarity, however, it’s hard to know whom or what to believe in relation to pipeline safety in Alberta in general.

A 2007 report, Pipeline Performance in Alberta, 1990–2005, from the Energy and Utilities Board (EUB), the precursor to the ERCB, noted that “pipeline failures are very costly from the perspective of lost production and royalties, environmental damage and cleanup, increased greenhouse gas emissions and loss of public goodwill.” In other words, no one wants a spill. And it’s no great mystery why pipelines fail. “During all the years the EUB has tracked failure data,” notes the report, “the predominant cause of pipeline failure has been internal corrosion, followed by external corrosion. This is not surprising, as most of Alberta’s pipeline infrastructure is used for production of raw oil and gas, which by nature can be highly corrosive. As pipes are mainly steel and are buried underground, corrosion of external surfaces is also possible.”

The safety debate ramps up around the question of how often pipelines fail. Industry claims that today’s pipelines are much safer than trucks or trains for transporting oil and gas over land. An International Energy Agency (IEA) study partially supports this assertion. In the US the IEA found that rail cars transporting oil are six times more likely to spill than pipelines, though pipelines spill more oil when they rupture. To avoid ruptures, high-tech control centres monitor temperature, flow rate and pressure, while “smart pig” robots make periodic internal inspections to test pipeline integrity and detect dents or corrosion. The Canadian Energy Pipeline Association boasts that from 2002 to 2011, pipelines in Canada transported oil and natural gas with a 99.999 per cent safety record. That means that the pipelines transported over 1.5 trillion L of oil and natural gas, spilling just over 8 million L.

Alberta’s ERCB uses similar metrics. The regulatory agency has jurisdiction over pipelines that fall solely within provincial boundaries. Pipeline companies are required to implement integrity-management programs to identify and monitor risks, to annually evaluate corrosion potential and replace corroded pipe, and to install automated leak-detection systems for liquid-hydrocarbon pipelines. All pipeline incidents have to be reported to the regulator, including damage that doesn’t cause a leak. Spokespeople for the agency claim their data show that aging pipelines are not more susceptible to leaks—once detected, they say, corroded sections of pipe are replaced, and corrosion can occur in new pipe as well as old. The regulatory agency also says their data does not indicate that diluted bitumen is more corrosive than conventional oil.

“Pipelines in Alberta have never been safer,” asserts the ERCB, noting that while thousands of km of pipe are added to the network every year, ruptures are now less common—16 in 2011 compared to 85 in 1994—and pipeline incidents have declined. In 2008 the pipeline failure rate was 2.1 per 1,000 km, a number that was down to 1.5 failures per 1,000 km in 2011.

The rosy picture looks bleaker if the numbers are counted in a different way. In a widely circulated analysis, “The History of Oil Pipeline Spills in Alberta, 2006–2012,” Sean Kheraj, a history professor at York University, points out that the ERCB’s method of illustrating pipeline safety doesn’t measure the volume, product type or location of pipeline spills, which obscures the resulting environmental impact. Using data from the ERCB’s 2011 field surveillance and operations summary, Kheraj showed that in 2010, an oil spill from a crude or multi-phase pipeline occurred every 1.3 days. Throughout that year, those spills dumped 21,000 barrels of oil across Alberta. When natural gas and sour gas incidents were factored in for 2010, there were 1.4 pipeline leaks every day.

The ERCB’s field surveillance and operations summary for the following year is much shorter—15 pages instead of 54—but does show that in 2011 there were 717 pipeline incidents in Alberta. Leaks and ruptures made up 539 of those. That’s a pipeline failure rate of 1.48 leaks or ruptures per day, up from 2010. Unlike the previous year, the exact amount of oil spilled from pipelines in 2011 is not provided, though a graph representation of spills in the province does show that pipelines spilled more hydrocarbons than wells and energy facilities combined, the first time in at least five years that pipelines spilled more than either wells or facilities on their own.

“Over the last year we have seen a remarkable increase in spill frequency and severity,” said Roger Swierstra, executive vice-president of Calgary-based insurance broker Iridium Risk Services, in the Calgary Herald in June 2012. “Increasing production volumes are straining existing pipeline infra-structure, and oil and gas producers are now in catch-up mode with their pipeline integrity management—there are thousands of kilometres of pipe in Alberta and a lot of it is aging and subject to things like corrosion.”

Despite the ERCB’s claim that Alberta’s pipelines “have never been safer,” the industry has an optics problem. As does the provincial energy regulator. In early 2013, Premier Redford travelled to Washington, DC, in support of Keystone XL. On February 25 she published an op-ed in USA Today boasting of Alberta’s rigorous environmental laws and safety record. The next day, the ERCB announced enforcement actions against three companies for pipeline spills in 2011, including a Plains Midstream spill of 28,000 barrels of oil from the Rainbow line in northwest Alberta, the largest spill in Alberta in 36 years. In that incident, the company had failed to properly inspect corrosion repair welding, and took eight and a half hours to shut down the pipeline after becoming aware of a problem. In these details this spill resembles Enbridge’s into the Kalamazoo River, except that in the US, Enbridge was fined $3.7-million, while in Alberta the regulator issued no fine at all. “That’s a legislative gaffe,” said ERCB spokesman Darin Barter. “Our legislation that we operate within doesn’t allow us to fine more than several hundred dollars.”

Two months later, Alberta Environment filed charges against Plains Midstream in relation to the Rainbow spill. The company could eventually face three fines of up to $500,000 each. Still, a diverse group of critics, including Nathan Lemphers of the Pembina Institute, Don Bester of the Alberta Surface Rights Group and Licia Corbella, conservative editor of the Calgary Herald, all pointed out that the ERCB’s lack of a punitive hammer for pipeline accidents in Alberta looks bad. At best it undercuts the premier’s efforts to promote the energy industry’s plans to expand Alberta’s pipeline network. At worst it reflects a systemic bias towards the industry.

A new agency, the Alberta Energy Regulator (AER), replaced the ERCB in June, and is in the process of taking over responsibilities formerly handled by Alberta Environment. This may or may not signal a substantive change. The new regulator has put Plains Midstream under a heavier regulatory burden because of the company’s spills and its 19 deficiency and non-compliance notices since 2011. Meanwhile, major incidents continue to happen. On June 1 of this year an Apache Corp. pipeline spilled 9.5 million L of toxic wastewater near Zama City, contaminating a swath of land equal to 52 CFL football fields. It took the new regulator 11 days to announce the spill. Later that month, during the floods in Alberta, debris in the Sheep River struck and ruptured a Legacy Oil and Gas pipeline near Turner Valley, which spewed sour gas. It remains to be seen what action AER will take in response to these spills.

The optics may change under the new regulator. Or they may not. This is the third different energy regulator in the province in five-and-a-half years. The AER’s new chair is Gerry Protti, a former executive with Encana, a founding member of the Canadian Association of Petroleum Producers, and a former classmate of Energy Minister Ken Hughes at the University of Calgary’s Institute of Corporate Directors. Rural landowners and First Nations groups have expressed concern about Protti’s objectivity. Even Herald business columnist Deborah Yedlin wrote, “It’s tough not to think about Protti’s appointment… as putting the fox in charge of the hen house.”

And then there’s the pipeline safety review. On August 23, Alberta Energy finally released the report—on a Friday at the end of summer, eight months after the review was submitted and nearly five months after the regulator completed its analysis of the original G10 review. Though it makes 17 recommendations and notes that the “safety of pipelines near water bodies appears to be an area without clear definition or consistent regulatory direction”, the review concludes that Alberta has Canada’s “most thorough overall regulatory regime.” Critics, however, were quick to point out the safety review’s narrow focus. The review did not examine or discuss a single pipeline spill in Alberta. It provided no information on the actual condition of Alberta’s pipelines and contained no data on the rate of incidents, or enforcement measures. “It’s a review of, really, regulations on paper only,” said Jennifer Grant, director of the Pembina Institute’s oilsands program. “You can’t really determine whether something is safe without assessing enforcement and compliance with regulations.”

At a cost of $455,000, the pipeline safety review failed to provide objective evidence as to the safety and security of Alberta’s pipelines. With such a limited scope, it’s unclear whether the review was ever intended to do so.

“What the league never understood… what it doesn’t understand now, is that it cannot be the passive actor it wishes to be. That like any laissez faire, non-interventionist approach, there are consequences predictable and certain that follow for which it is responsible, and by deciding not to intervene it is in fact intervening just as surely on behalf of those consequences.” The words are Ken Dryden’s, referring to the NHL’s response to violence in hockey in the 1970s, in his book The Game. But they could just as well be about the energy business in Alberta, with the companies as the players and the government and the regulator, the league and its referees. “A league, through its referees, sends messages to the game, the players react, the game takes on its form. But what is the message, and what is the form? And what would it be like if the message was different?” #

Tadzio Richards is an independent journalist and documentary filmmaker and the recipient of two National Magazine Awards.

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