Plains Midstream charged for largest Alberta oil spill in decades, Fines could be as high as $1.5M if found guilty

Plains Midstream charged for largest Alberta oil spill in decades, Fines could be as high as $1.5M if found guilty by Matt McClure, April 26, 2013, Calgary Herald
As the province announces a pipeline giant could face fines of up to $1.5 million in connection with Alberta’s largest oil spill in over three decades, it faces fresh accusations its regulation of the industry is inadequate. The province issued a news release Friday revealing that Plains Midstream Canada ULC has been charged with three counts of violating environmental protection laws in connection with the April 2011 release of 4.5 million litres of light crude near a First Nations community in northwest Alberta. The charges relate to the spill itself, failing to take all reasonable measures to repair the problem and not pursing all steps possible to remediate and dispose of the oil that contaminated over three hectares of beaver ponds and muskeg in a densely-forested area. The charges were filed in Peace River’s provincial court mere days before a two-year limitation period expired and a year after another Plains pipeline ruptured and released nearly a half million litres into a central Alberta river. Environmental advocates criticized the Alberta Environment and Sustainable Resource Development’s response as slow.

“Plains had another spill on another pipeline while this government decided whether to lay charges,” said Nathan Lemphers, a policy analyst with the Pembina Institute. “The delay suggests the province doesn’t have the resources it needs to enforce the law even as it ramps up production in the oils sand and allows the expansion of pipelines to carry that resource.” Department investigators were unavailable, but a spokesperson defended the time it took to lay charges, “It’s important we determine all the facts and ensure the enforcement steps taken are appropriate,” Nikki Booth said. The charges come two months after Alberta’s energy regulator issued a scathing report that found the company appeared to place a higher priority on keeping the pipeline running than on any concerns about the leak. The Energy Resource Conservation Board cited Plains for inadequate leak detection and response, after finding an employee at the company’s control centre in Olds restarted the pipeline several times after the initial break. The ERCB report also found the 45-year-old Rainbow pipeline — which Plains purchased from Imperial Oil Ltd four years ago for $544 million — began leaking when a sleeve used for corrosion repair failed. Board investigators said workers did not properly inspect the weld on the sleeve when the pipeline was excavated a year before the spill. Plains also failed to properly backfill and compact soil around the pipe, resulting in additional stress that contributed to the weld’s failure.

Greenpeace said in a release Friday that documents it obtained under freedom of information legislation show that ERCB investigators recommended a public inquiry into the spill, but the proposal was rejected by the board’s chief operating officer. The groups says the documents released also show that when three more spills — including the second Plains Midstream release — occurred, Alberta’s energy minister worked closely with the oil industry to ensure a review of pipeline safety would be acceptable to pipeline companies. “A public inquiry into the Rainbow spill could have helped prevent those spills,” said Melina Laboucan-Massimo, a Greenpeace campaigner fro the affected community of Little Buffalo. “The government needs to worrying about bad public relations for pipeline companies that are cutting corners and focus on how to protect the public.” Provisions in Alberta’s environmental legislation allow for fines of up to $1 million in cases where a company knowingly allows a release or spill. In this case, the maximum fine on each charge is only $500,000 as prosecutors are only alleging the release occurred or was permitted to happen.

Filings of Plains publicly-traded parent indicate the company has spent $70 million to clean up its mess northeast of Peace River and suffered a $21-million loss in revenue while the pipeline was shut down for three months following the disaster. In response to a Herald query, the company issued a release saying it has received and is now evaluating the charges. “We will be reviewing them with our counsel and the Crown, and will respond formally with our position in due course,” the release said. Plains has been summoned to make its first appearance in court on June 17th. [Emphasis added]

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