River oil leak cleanup estimated to cost $53-million
The cost to clean up and remediate the area impacted by an oil leak near Sundre in June was estimated at $53-million in a quarterly report released by Plains All American Pipeline.
Plains Midstream, the company which owns the pipeline near Sundre which released the light sour crude oil, is an indirect subsidiary of Plains All American.
On June 7, oil was leaked into the Red Deer River from a pipeline that crosses the river. The oil flowed down the river to Glennifer Lake where a boom was installed to keep it from going through the Dickson Dam.
The quarterly report estimated the amount of oil to be 1,000 barrels or less. Previously the estimate given was 1,000-3,000 barrels of oil.
“We estimate that the aggregate total cleanup and remediation costs, before insurance recoveries, will be approximately $53 million,” reads the report. The report is publicly available on Plains All American’s website.
“Although actual remediation costs may be more than amounts acrrued, we believe we have established adequate reserves for all probable and reasonably estimable costs,” it continues.
The report goes on to state the company’s insurance coverage “is adequate to cover the current estimated total remediation costs, and management believes that this coverage is also adequate to cover any potential remediation costs that may be in excess of amounts currently identified.” It says the insurance coverage is subject to certain exclusions and deductibles.
Plains Midstream Aug. 17 update on the leak, clean up has been completed at approximately half of the river sites. The quarterly report said clean-up at the Glennifer Lake site was completed by the end of June.
The update said a segment of the pipe that leaked the oil has been removed from the water and signed over to Alberta Environment and Sustainable Resource Development.
Plains Midstream did not provide a comment regarding the cost of the cleanup.
Don Bester, a local member of the Alberta Surface Rights Federation, took a boat ride on the Red Deer River from Sundre to the reservoir on Aug. 22.
He said his observations show a lot of work left to be done.
“I think they’re going to be there till next year,” Bester said. “There is still one helluva pile of oil residue left.”
He said there’s “not as much” cleanup activity along the river as he’d observed on previous trips.
“It’s a major spill and it’s a major cleanup,” he said of the estimated costs to the company. “I’ve heard the $53 million (estimate) but I think it’s going to cost them a lot more than that.”
During the river trip and some time at the trout pond, he and other people on the boat ride caught and released some fish.
“Some of the fish are getting these brown sores on them,” Bester said.
A zero-harvest rule was put into place along the Red Deer River and its tributaries after the August long weekend. Jessica Potter of Alberta Environment and Sustainable Resources said in a previous interview this was in part so the ministry can begin to assess the impacts of the spill on the fish.