September 2013

Surviving the flood

Oil sands companies adapt to avoid heavy impacts on production

By Dave Kaufman

Calgary’s second “flood of the century” in the last eight years hit in June and while it had dire consequences for Canada’s oil and gas capital, the effects on oil sands companies were minimal due to efficient emergency responses and preventive action.

At the peak of the crisis, more than 75,000 Calgary residents were evacuated from their homes, and the flooding Bow and Elbow Rivers made it impossible for many to go to work in the downtown core. Dozens of communities along many Alberta rivers declared states of emergency, and parts of northern Alberta also experienced flooding due to the snow melt and large amounts of rain.

Enbridge, the largest transporter of western Canadian crude oil to the United States, closed its 17-kilometre-long Line 37 pipeline after discovering a leak on June 22, due to heavy rainfall in the Fort McMurray region. The company also shut two more of its pipelines in the area as a precautionary measure. According to Enbridge, the majority of the 750 barrels of light synthetic crude oil released from the Line 37 spill has been recovered. The line returned to full service in late July.

Suncor was affected by the pipeline closures. Media manager Sneh Seetal said the shutdown of Enbridge’s regional pipeline system reduced the company’s aggregate June production by around two million barrels. “That’s just lost,” she said. “Obviously we will work hard to continue to produce what we can safely and reliably, but two million barrels would not be something that would be easy to make up.

“[We tried to] minimize the work on our oil sands operation as a result of those shutdowns by as much as possible,” Seetal said. “We put more product in storage and used our storage to capacity. And also we do have a pipeline from our oil sands operation that helped to take away product.”

Enbridge closed its Calgary offices during the flood and implemented its business recovery plan, which, according to the company, ensured that critical functions of their operations continued without interruption.

Seetal said one thing Suncor tried to be very cognizant of was that “the city of Calgary was asking people not to overload the public systems in terms of transportation, phones, cable, and Internet. [We] really worked hard to respect their request and asked that employees working critical functions work remotely and others to perhaps volunteer in the community if they were so inclined during that time.”

The company set up additional workspaces at its office near Calgary’s Mount Royal University, outside of the downtown core on the southwest end of town and away from the major flooding. The one caveat for Suncor employees was that if they wanted to work, “it had to be safe for them to get there,” said Seetal.

A number of oil and gas companies, including Suncor, also reached into their pocketbooks to make substantial donations to flood relief efforts. Among them were Statoil Canada and PTTEP Canada Limited, which gave $500,000 each, and Husky Energy and ConocoPhillips, which each donated $1 million. Cenovus contributed $1 million and also pledged to match any employee’s donation, up to a maximum of $25,000 per employee. “Many companies made donations to flood relief organizations,” said Geraldine Anderson, spokesperson for the Canadian Association of Petroleum Producers. “Calgary is an incredible city. Everybody stepped up, put on their boots, rolled up their sleeves and helped out.”

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