The cleanup of last year’s release of 7,400 barrels of oil in the Primrose oil fields (Alberta) has already cost Canadian Natural Resources $60 million. But, according to an article in the New York Times, the real potential cost may yet be looming in the form of decreased production.
The environmental issue at hand, is whether the high-pressure steam process used (referred to as “huff and puff”) to release the subsurface bitumen, fractured the “caprock” or if the release is the result of a malfunction. Environmental groups believe it was the former of the two while Steve Laut, president of Canadian Natural Resources said that this scenario is highly improbable.
The investigation of the cause of the release has energy and investment experts watching the Primrose developments carefully. Depending on the findings and regulatory response, it could slow oil sands production in other areas of Alberta. Morningstar oil equity analyst David McColl said, “The implications of caprock integrity is an unknown that could have significant implications for the small producers and beyond that for the larger producers as well.”
All eyes will be on the Alberta Energy Regulator who is “authorized to make decisions on applications for energy development, monitoring for compliance assurance, decommissioning of developments, and all other aspects of energy resource activities.” Determining the facts from this incident may prove to be relatively minor when compared to actually communicating those findings to the various stakeholders.
Whether it is a release to the environment, a question of compliance, or an enforcement action – they all point to the need for a sound environmental communication policy. Of course, as all environmental professionals know and understand; remaining proactive on all environmental issues is the best policy.
If you would like to read this New York Times article, click here.
If you have questions about environmental compliance, assessments or remediation, or litigation support, contact Christopher Paré (email@example.com) at 519-979-7300 ext. 114.