An Alberta-based corporation with a head office in Calgary and operations in Mountain View County has pled guilty in provincial court to a charge laid against it by the Alberta Energy Regulator (AER).
Whitecap Resources Inc. was charged by the regulator this past summer following an incident on June 20, 2021 at one of the company’s gas wells near Didsbury that malfunctioned and caused the release of hydrogen sulphide (H2S),
Whitecap has been ordered to pay an $80,000 penalty of which $78,000 will go towards a creative sentencing project while the remaining $2,000 will go to the Alberta Court of Justice as a fine, according to an AER statement issued Thursday, Feb, 29.
The creative sentencing project(s), which the regulator oversees on behalf of the Alberta Court of Justice, will occur within the areas of Mountain View County or the immediately adjacent counties of Kneehill, Red Deer, Clearwater, Rocky View, Wheatland, City of Calgary or M.D. of Bighorn No. 8.
Projects for consideration must demonstrate benefits to air quality, promote pollution prevention and continuous improvement, and/or have demonstrable benefits to first responders, hospitals, local authorities or educational establishments.
According to an agreed statement of facts presented to the court, which is available here, the company is said to have released or permitted the release into the environment of H2S “in an amount, concentration or level or at a rate of release that causes or may cause significant adverse effect contrary” to the Environmental Protection and Enhancement Act.
The energy company employs more than 450 people and has operations in northeast B.C., Alberta as well as Saskatchewan. Among company’s assets is an oil and gas producing field near Didsbury that is remotely monitored and operated by company employees at Whitecap’s Olds Gas Plant control room.
The computer-based system provides real-time control and monitoring of the company’s infrastructure and is also intended to offer early detection of low- or high-pressure anomalies to alert operations personnel in the event of any potential issues.
At about 8:40 p.m. on June 20, 2021, the control room received a low-pressure alarm from the Didsbury-area well that indicated a potential issue with the wellhead. Control room staff alerted on-call operators about a possible release and a foreman subsequently attended the scene alongside on-call operators.
Upon confirming a release was occurring, they developed a plan to isolate the well and by 9:41 p.m. the same day, the wellhead was isolated, the release stopped and scene rendered safe.
Despite an estimated release into the surrounding environment of anywhere between 649 and 1,418 cubic metres of highly hazardous H2S, which can cause severe adverse effects including death, “there were no injuries, property damage, or permanent environmental harm reported,” reads the statement of facts.
The investigation determined the well had in 2015 been acquired through an amalgamation process by Whitecap’s predecessor NAL Resources Limited as part of an asset purchase from an unrelated third party.
The gas causes corrosion of metallic components, and changes were made to the wellhead’s shutdown equipment in 2014 prior to the asset coming into Whitecap’s possession.
“During the change, sour service piping specifications were not followed by the third-party owner of the well,” reads the statement, adding the work ultimately resulted in an insufficient pipe wall thickness that made the wellhead “more susceptible to corrosion and failure.”
And as corrosion impacted the affected components from the inside out, a visual inspection was not possible.
“The well was equipped with emergency shutdown devices (ESD), but the trip mechanisms failed to activate the ESDs,” reads the statement, adding the well had to be manually shut down.
Despite a preventative maintenance program that in 2020 included an annual inspection report that noted a “no trip” on the low-pressure device that was caused by a component that had seized and was rebuilt and recalibrated, “the low-pressure device failed for unknown reasons and was replaced post-incident.”
