CNRL $68 Million Primrose “Down-and-dirty” Lawsuit. “No-one needs an excuse to bad mouth the Regulator, they hand out opportunities.”

Oilpatch lawsuit plays blame game over pipeline failure by Claudia Cattaneo | July 8, 2015 10:43 AM ET

Contractors claim Canadian Natural moved emulsion at temperatures beyond the pipeline’s design capacity for extended periods.

.a massive lawsuit making its way through the courts in Alberta provides the down-and-dirty of the way companies deal with each other when things go wrong. [And how Encana deals with communities when the company contaminates their drinking water supplies?]

The lawsuit involves Canadian Natural Resources Ltd., Canada’s largest independent oil and gas company, and three oil services heavyweights — Flint Field Services Ltd. (owned by San Francisco-based engineering firm URS Corp.), Toronto-based ShawCor Ltd., and IMV Projects Inc. (owned by U.K. based Wood Group) — over who is to blame for the failure of a high-temperature pipeline that is part of the expansion of the oil producer’s Primrose/Wolf Lake heavy oil project in northeast Alberta.

… The lawsuit, first launched in 2010 and last amended in April 2015, has grown a thick court file, ensnared dozens of witnesses, involved more than 100 days of discovery, and is scheduled for a three-month trial starting in April 2016 at the Alberta Court of Queen’s Bench.

The lawsuit will be closely watched due to the names involved and as a case study on how companies pass the buck at a time of zero tolerance for bad practices. [Like Encana blaming bacteria for the community-wide drinking water contamination caused by Encana’s super bad (and illegal) practices fracturing Rosebud’s drinking water supplies?]

Canadian Natural is seeking $68 million in damages from companies that provided the 32-kilometre pipeline’s coating, insulation system, engineering services and construction work.

For their part, the service providers say the suit is without merit and that Canadian Natural has only itself to blame for a failure that resulted from its own actions.

Installed in 2008, the buried pipeline was unique in Western Canada because it was meant to carry emulsion materials at very high temperature — up to 160 degrees Celsius. Canadian Natural claims the pipeline’s coating didn’t hold up as expected, leading to “hot spots” along the line, coating that deteriorated and lost its integrity. The company said the whole system has to be replaced. “The … coating had degraded extensively and was no longer capable of providing an adequate thermal insulation for the surrounding environment or meeting design requirements,” Canadian Natural alleges. “The design of the insulation system was flawed and unsuitable for the pipeline as constructed.” The oil producer claims the contractors hired unqualified personnel, provided the wrong advice, used inferior materials, and failed to do adequate testing or to meet minimal trench requirements.

“The defendants misconduct particularized herein was unconscionable, particularly given the public interest in ensuring that the oil and gas pipelines operate safely and in an environmentally responsible fashion,” Canadian Natural claims. [!!!]

But the contractors claim Canadian Natural moved emulsion at temperatures that were beyond the pipe’s design capacity for extended periods.

“Any losses or damages to the pipeline, as alleged by CNRL or at all, were caused by CNRL operating the pipeline continuously at temperatures in excess of 140 degrees Celsius and 160 degrees Celsius, due to a well blowout,” in early January, 2009, alleges IMV, which designed it. The blowout forced the company to cease steaming and push high temperature emulsion into the pipeline, which caused the damage, IMV alleges.

ShawCor, which provided the pipeline’s coating, says it met all the specifications and if the pipeline failed it’s because Canadian Natural was negligent.

Flint, hired to do construction work related to the project, including building the pipeline’s trench, alleges “The damage to the coating system of the pipeline arose from or was contributed to by the improper use and operation of the pipeline by the plaintiff, for which the plaintiff is solely responsible.”

Canadian Natural’s Primrose problems didn’t stop there. The company had several bitumen leaks in 2013, resulting in an Alberta Energy Regulator investigation and lots of bad publicity as it struggled to contain them. [STRUGGLED?  ACCORDING TO THE REGULATOR, CNRL HASN’T CONTAINED THE LEAKS YET] In that case, CNRL attributed the spill to failed wellbores in abandoned wells, caused by faulty cement jobs or separated casings.

The AER was due to conclude its investigation on the causes of the spill late last year, but spokesman Bob Curran said the regulator has yet to complete its own analysis of reports by the company and by a third party. There is no set date for a conclusion, Curran said. [Protti slowing the analysis up? For how many decades? When will Protti and his enabling AER shut CNRL down at Primrose until the aquifers are cleaned up, and the caprock unfrac’d and brought back up from hell?]

Some excellent comments:

  • More bad reporting by Ms. Cattaneo, Primrose had its first leak in 2009 and again in 2013, which is still occurring, CNRL is still struggling to contain them. The company originally and previous to any investigation, blamed the bitumen leaking to surface on well bore integrity issues. Thereafter, their own internal report and the third party report makes it clear that cap rock integrity is actually the issue. The AER has also confirmed cap rock failure as the likely cause of the bitumen to surface issues of Primrose (report generated on 2009 leak and published in 2013, see AER website for more details) and the communication of the flows with naturally occurring faults. The AER report should have been completed long ago, instead the AER permitted steaming operations to resume at Primrose, without proper understanding of the flow to surface mechanics at play and the ongoing contamination of surface and groundwater in the area. Safe and responsible? [“No Duty of Care!” legally immune, even for failures, omissions and gross negligence!]

    • I’m not saying you’re wrong, but this article is about a different incident that happened at surface not underground. Not that this means it’s good in any way. CNRL has been pushing the envelope for years there.

      • Didn’t make it to the end of the article Oldgrey? I realize that the bulk of the article is about the legals, but the last two paragraphs are about Primose in general. My commenting refers to that. And the leaks are also at the surface!

        I did, but what you’re talking about is only referred to obliquely in the second last paragraph. The primary focus of this article is on the surface pipeline leak and resulting lawsuit, which is separate from the underground leaks. I agree the caprock integrity problems, which I know something about, are huge.

        Obliquely and incorrectly and since it is in a national paper, should it not be factual, each and every part of the narrative?

        • The article is about the pipeline lawsuit…the last two paragraphs referred to a completely different incident

          • Ever thought that the failed pipeline and corrosion issues, play a part in the flow to surface events? Perhaps that is why it is mentioned. Would be nice to see that thick file.

            There are two files…and they are not related at all…

            I don’t work for CNRL, but I’ve studied their previous field development plans in the course of my own work. The one thing I will say (and I’ve got to be careful here) is that they operate Primrose at much higher temperatures and pressures than anyone else in the heavy oil industry. That creates higher risks both at surface and underground.

            Right, they blew the cap rock to hell. Now they have serious issues that the AER is turning a blind eye to.

            Frightening to think that Albertan’s are now business partners for the next 30 years with CNRL in the Sturgeon/NW Upgrader project. How much damage will they do in that amount of time? Then will they sue us for their failings?

            What was factually incorrect about that paragraph? CNRL did attribute the underground spills to failed wellbore casings. Cattaneo did add a paragraph at the end that the final AER investigation into that is still underway, and she’s got to be careful legally about not jumping to conclusions.

            The AER and CNRL concluded otherwise and so had the third party report. All are currently published. And to fail to mention the 2009 leak, well again, just bad journalism.

            There was no need to mention the ’09 incident as it wasn’t remotely related to the pipeline suit…it just gives you an excuse to bad mouth the regulator….

            And the 2013 incidents are? No-one needs an excuse to bad mouth the Regulator, they hand out opportunities.

            Is the 2013 AER report the final conclusion or a preliminary one? It makes a big difference as to how it can be reported.

            And I disagree about bad journalism. The article is about the pipeline leak and lawsuit. The underground leaks are a separate issue and needn’t be dwelled on in this particular story.

            Now why would you delete your last posting Oldgrey Badger?
            Here, for posterity, I’ll copy it from my inbox.

            Oldgrey Badger

            “Yes those underground leaks are very bad. I won’t say otherwise.”

            I suppose you’re right I shouldn’t have deleted it. But my path may cross with some of the people involved in the future.

            Those underground leaks are very bad. I won’t say otherwise.

            Hmm. Typical. No principle when it may effect our earning potential. Just like Cattaneo, CNRL and so many others beholden to the industry. Doesn’t your alias protect you?

            I am a geologist, and I have a good deal of knowledge about caprock integrity. I don’t work for any single oil company but consult to many, not CNRL to this point. I have analyzed the Primrose leaks as part of a competitor analysis, and I agree with you that I think the caprock has been breached in that particular field. However I’m not an expert in that particular area and my opinion carries no legal weight.

            I don’t ever intend to work for CNRL but I will need to work again in the near future, and I certainly need to be careful about how much I divulge about any company. Especially in this case where the AER is still formulating their final verdict and action plan. Aliases can be found out readily if anybody looks hard enough, and my field is small enough that I expect people could figure out who I am if they really want to.

            If it’s any comfort to you, I have never seen any similar example of a caprock breach in the course of my work, nor have I seen any other company operate at the temperatures and pressures that CNRL does. If the AER concludes that they’ve contaminated the groundwater then I hope they’re prosecuted to the fullest extent of the law.

            The 2013 AER report is a final conclusion on the 2009 leak.
            If Cattaneo did not want the issue of the leaks discussed, why was it included in the article? Perhaps it has more to do with the legal aspects than you are appreciating. The transcripts will be fascinating.

            Again, these are flow to surface leaks! Not just happening underground, leaking, contaminating an entire aquifer, had to drain an entire waterbody and remove hundreds of tonnes of contaminated soil and the leaks are still occurring.

            That is just hysteria…no aquifers were affected in the pipeline incident….

            What is wrong with you? Read first, shill after. The bitumen flow to surface leaks have contaminated an aquifer.

            What’s wrong with you?? Don’t you know he difference between a SAGD production and pipelines?? The suit is over a 32-kilometre pipeline’s coating, insulation system not the production/steam casings…
            I’m interested because I’ve never seen insulated pipe used for crude transmission before, and am interested in the failure mode…it’s very abnormal for a pipe to fail in such a short time..the temperatures are not high enough to cause line failure ..just coating/insulation damage..

            you and your bumbuddy bltskp are losing this argument.

  • What do you think about these pipelines?

    Regardless of a few incidents and failures pipelines are by far the safest and most economical means of transporting fluids…

    Well, they seem to work until, well, they don’t work. A few days ago the excuse was the rupture at Kalamazoo wasn’t the fault of Enbridge “they didn’t build the pipe” and it was old. Makes me wonder if the same excuse might be used in BC if and when the pipeline not being replaced as part of Kinder Morgan’s proposed Trans Mountain project ruptures or leaks. Maybe the safest option is to halt the increase of dilbit exports?

    Kalamazoo is getting old…get some new material….nobody is suggesting it was not Enbridges fault and the they are paying the price…The chance of a significant leak on the new or old Transmountain lines is extremely remote.

    The comment I was referring to was demac’s and not yours, my apologies.

    The lout is half parrot.

    Wise idea, don’t respond directly to me that way you won’t receive a rebuttal. You’re incapable of making any intelligent comment on your own so why not hide under the skirts of Winespius?

    Is winespius employed in the oil idustry? [Or employed by the AER or Alberta’s Public Affairs Burreau?]

    [Refer also to:

    AER, Alberta’s new energy regulator seeks the world’s trust, as Alberta’s caprock is frac’d “to Hell”

This entry was posted in Global Frac News, Other Lawsuits. Bookmark the permalink.