Executives at Canadian Natural Resources Limited (CNRL) said little about an ongoing blowout at an underground oilsands extraction site until late last week, when the company held a conference call for investors and analysts, claiming it had identified the cause of the problem and the situation was under control.
Yet, in that conference call, CNRL also confirmed that bitumen emulsion — a mixture of oilsands and water — is still escaping from the Clearwater formation 500 metres underground and following an unknown pathway to the surface where it is leaking out of the ground in four distinct locations at a rate of up to 20 barrels a day. To further complicate matters, the company’s explanations for the cause of the blowout don’t align with the regulator’s findings from a similar incident that occurred in 2009 at the same site.
As a result, CNRL’s explanations have raised many new questions about the incidents and the fate of the project itself.
CNRL president Steven Laut said that the 2009 blowout was a result of a well integrity issue and that his company is confident the four new leaks were also caused by a mechanical failure, this time in one or more old and abandoned wells at the site. This conclusion directly contradicts the official findings of an investigation by Alberta’s energy regulator (then the ERCB) into the cause of the 2009 incident. Furthermore, the province’s new energy regulator (the AER) has responded to CNRL’s claims saying it does not have any evidence to support the company's conclusion, and that CNRL has not provided any either."We do not currently have the evidence or data to support any conclusions as to the cause of the incident"
— AER CEO Jim Ellis
(Aug. 2, 2013)
CNRL executives blame the 2009 release on a failure of integrity of one of the wells it drilled, insisting the cap rock formations overlaying the area where the bitumen is contained are strong enough to withstand the pressure caused by injecting steam into the area to extract the bitumen. The ERCB’s findings into the 2009 incident contradict this theory, instead linking the bitumen release to high steam volume and weaknesses in the cap rock formation.
The executive summary of the ERCB’s report into the 2009 incident states (emphasis added):
“The ERCB agrees that the bitumen emulsion pathway cannot be identified with certainty based on the available data. However, the ERCB is of the view that the Clearwater shale was likely breached by high-pressure steam injection not related to a wellbore issue...
“The ERCB notes that the steam volume injected in Cycle 1 at Primrose East was significantly higher on a pore volume basis than in past HPCSS operations at PAW due to reduced well spacing. The ERCB is of the view that this likely contributed to the bitumen emulsion surface release. CNRL acknowledged that the Cycle 1 injection volumes may have contributed to the release.
“The ERCB is also of the view that geological weaknesses in combination with stresses induced by high-pressure steam injection may have contributed to the release. The geological weakness may be caused by deposition, subsequent erosion, or stressing along the salt collapse edge at Primrose East.”
Ignoring the conclusions of the 2009 ERBC report, CNRL executives told reporters last week that it would determine the source of the mechanical failures behind this latest incident and either fix them or prevent them from occurring again, and that the overall project would not be impacted by these incidents. CNRL executives have not stated if or how the project could resume if it is found that geologic weaknesses are the cause of the multiple releases.
New questions raised
CNRL’s theories on the cause of this incident raise many new questions about this incident:
What volume of bitumen emulsion has escaped the formation relative to the volume that has emerged at the surface, and what does this mean about the extent of subsurface contamination and groundwater contamination? How many groundwater-bearing zones (saline, brackish and potable fresh water) were contaminated in 2009? What volume was introduced into those zones? What volume has since been recovered? How much remains?
Normally releases of hydrocarbon products from a single failed structure like a well bore or a pipeline follow the path of least resistance to the surface. How does CNRL explain the fact that there are four different surface release points? What do these releases mean for the structural integrity of the Clearwater formation?
The ERCB investigation report into the 2009 incident stated, “As a result of this incident the ERCB has put limits on the steam injection volumes that CNRL is allowed to inject per cycle.” However, it is not clear if and when these conditions were imposed and if and how they were followed.
Implications for the new energy regulator
The Alberta Energy Regulator (AER) appears poised to handle crisis differently than its predecessor organizations. In its media release on August 2, the AER showed strong action in stating that its steaming restriction will remain in place until it is satisfied that the operator has effectively dealt with current and future blowout scenarios. The AER has said that CNRL must provide detailed containment, cleanup and remediation plans to the AER and Alberta Environment and Sustainable Resource Development (ESRD), and that another investigation will be conducted to determine the root causes of these blowouts.
It remains to be seen if the AER will conduct the investigation in a manner that is transparent and accessible to stakeholder groups, including First Nations, environmental organizations and members of the nearby communities.
In comparison, the ERCB’s investigation into the 2009 blowout was anything but transparent. The ERCB not only elected to allow CNRL to resume steaming without fully understanding the cause of the blowout or how to prevent a reoccurrence, it also delayed the public release of the investigation until January of 2013, well after the project resumed.