Husky Energy stops NWT operations after safety violations

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Husky Energy Inc. has halted work at its Northwest Territories operations after being slapped with a series of safety violations, while at the same time Enbridge Inc. is cleaning up two small potential pipeline leaks in the northern territory.

On Tuesday, the National Energy Board issued Husky a safety order that said continued work at its Slater River operations "is likely to result in serious bodily injury."

The order comes after the NEB found a series of violations, including "significant deficiencies within the accommodations and kitchen areas that could affect the health and safety of personnel;" a "loss of consciousness and subsequent fall of a water truck operator" that wasn't reported for more than a week; and an equipment and procedural shortfall that "led to the occurrence of a flash fire."

Husky was ordered to halt immediately work on its two wells in the area. In response, the company said it also stopped building an all-season road, the primary component of its winter work program at a location that holds promise as a new source of oil.

"We are taking this matter very seriously and are working with the regulator to ensure our operations are brought into full compliance," said spokesman Mel Duvall. He added: "We will restart our operations only when we and the regulator are satisfied all requirements have been met."

The NEB said it could not provide further detail on the incidents, as its work is not complete. But Mr. Duvall said the fire "was a propane spark fire contained in a small bucket, which extinguished itself in seconds."

Even so, the work-stoppage has raised concern with the NWT government, which has looked with hope at the developments near Norman Wells, where Husky, MGM Energy Corp. and ConocoPhillips are all engaged in oil exploration.

"Both the government of the NWT as well as the NEB would encourage [Husky] to meet all their requirements," said Tim Coleman, director of minerals, oil and gas for the territorial department of industry, tourism and investment. The territory, he added, remains very hopeful about what energy development could bring.

"It's quite promising," he said. "Obviously they're in the exploration phase now. But we hope that will lead to them discovering something that's viable as a commercial production."

Part of those hopes hinges on the fact that a pipeline already takes oil away from Norman Wells. Enbridge's Line 21, built in 1985, can carry 50,000 barrels per day; it's now carrying about 39,500, meaning there is spare capacity.

That pipeline, however, has encountered problems, including a sizeable 2011 spill. On Wednesday, Enbridge said it is investigating whether it has experienced two other spills. The company is digging up 30 spots on the pipeline this winter as part of regular maintenance to examine areas that might be of concern. At two of those, it found contaminated soil, and is now trying to find out what happened.

"We are right now assessing that soil to see what is the nature of the contamination, and if we can determine the amount of whatever contamination is there," said spokesman Todd Nogier.

He said at one of the areas, 60 kilometres west of Fort Simpson, 30 cubic metres of soil had been removed. At the second area, not far from the location of the 2011 spill near Wrigley, NWT, roughly 65 cubic metres had been removed. A standard dump truck can hold roughly six cubic metres.

Enbridge has repaired the pipeline at those two locations by installing a sleeve around it.