North America has a growing network of oil and gas pipelines, crossing many waterbodies and coming into close proximity to water resources upon which local communities depend.
Pipeline spills or releases have the potential to have catastrophic impacts on surrounding water resources, ecosystems and communities, and the long term impacts are not well understood. Recent data published by industry regulators suggests that incorrect operation and improper leak detection are rising factors in pipeline spills across Canada.
SHARE is engaging with Canadian pipeline companies with poor track records of spills or leaks in recent years compared to their peers. The implications for companies that operate and own pipelines are significant; in the near-term companies face increased capital expenditures and suspended operations, in the longer-term there are reputational, regulatory and operational risks that can impact financial value. The growing public opposition to the construction of new pipelines has put companies under heightened scrutiny; companies that manage and report on the risks signal to investors that they are better equipped to compete in the current business environment.
In 2016, Husky Energy released 225,000 litres of oil along and around the North Saskatchewan River, an incident that was later attributed to slope failure in the ground that caused the pipeline to buckle and fail. The company has spent over $100 million in repair and clean up costs, and it is possible that it will face further fines from regulatory bodies.
SHARE has been actively engaged with Husky Energy on improving its pipeline safety and maintenance. The company committed to making changes following the incident, and this quarter, SHARE followed up with the company to raise questions about improvements to the company’s ability to prevent and mitigate spills along its pipelines. Husky confirmed that it has done a complete assessment of the integrity of all its pipelines following the incident and has made changes to its operations as a result. The company has updated its leak response protocol to include a set timeline for investigating an issue and shutting the pipeline down, made improvements to leak detection systems to increase their sensitivity in high consequence areas, and has introduced new training requirements. The company has also committed to conducting regular geotechnical reviews and to use ongoing assessment and monitoring to inform stress models and planning.
SHARE has applauded these efforts and will continue to work with companies such as Husky to make lasting progress in this area. For pipeline operators, there is much work still to be done to improve the safety and integrity of the hundreds of thousands of kilometres of pipelines that cross our country.