An oilsands operator in northern Alberta has been ordered to shut down due to repeated failures to meet its regulatory obligations.
The Alberta Energy Regulator has issued an order requiring Calgary-based Sunshine Oilsands Ltd. to suspend its wells, facilities and pipelines.
The order, issued Nov. 14, requires the operator to post a security deposit of more than $6.1 million, which represents 100 per cent of the company’s estimated inactive liability.
Under the order, the operator must also provide the regulator with a series of “reasonable care measures” it will adopt to improve the operation of its sites.
The order highlights a series of infractions related to the company’s West Ellis facility, including broken turbines, leaking pipelines and containment units for the industrial site that were at risk of spilling over.
The SAGD (steam-assisted gravity drainage) oilsands facility is located in the northwestern stretches of the Athabasca oilsands, about 60 kilometres west of Fort McKay.
“The company has repeatedly failed to comply with regulatory requirements and address compliance issues in a timely manner,” the regulator said in a statement.
Sunshine Oilsands — an oilsands exploration, development and production company — must immediately report any hazards that present a risk to public safety or the environment, the regulator said.
“The AER has issued this order to ensure that the sites licensed to Sunshine Oilsands will not pose a risk to public safety or the environment,” the regulator said in an advisory.
“Failure to comply with this order may result in escalation of enforcement, which could include an abandonment order.”
Broken turbines, pipeline leaks
According to the order, turbines used to generate power on the site had fallen into disrepair.
One of them, known as the North Turbine, was still being used, despite being “inoperable,” the regulator said. The turbine’s heat recovery system was broken.
The south turbine was also broken but the operator told the regulator that it would not be fixed due to the costs associated with the necessary repairs.
At the time when the order was issued by the AER, neither of the turbines had been fixed and the company continued to operate the broken North Turbine.
Questionable containment
Some secondary containment sites were also of concern to inspectors. According to the order, piling boots being used to secure four tanks at the West Ells facility had fallen into disrepair.
Pile boots are specialized attachments used in the installation of piles, which act the foundation for such tanks, especially in marshy and uneven landscapes.
The issue with the containment tanks was reported to the AER in May 2023. The company told the regulator in November of that year that the broken tanks would be taken out of service to mitigate the risks of a leak.
On Oct. 16 of this year, an AER inspector discovered that one of the faulty tanks had been put back into service without repair or any additional measures to contain a possible leak.
On the same day, an inspector discovered that steam was actively leaking from a pipeline, from three separate locations along the line.
According to the order, the inspector was told that a Sunshine operator that the company had been aware of the issue since the week before.
Sunshine was issued a notice of non-compliance at the time for failing to immediately report the three separate releases.
The regulator also found the company had not investigated the releases as required and did not have adequate an adequate leak detection program in place.
According to the company’s website, construction on the West Ells facility began in 2012.
SAGD uses horizontal wells and injected steam to heat bitumen and bring it to the surface.