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These are stories Report on Business is following Wednesday, July 31, 2013.

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Oil giant scrambles to control seepage
Canadian Natural Resources Ltd. says it's getting a handle on a series of bitumen leaks in that have killed several animals and focused attention on the oil sands at a time when the industry can least afford it.

Bitumen has been seeping to the surface for weeks at the Canadian oil and gas company's Primrose project at the Cold Lake Air Weapons range in northeastern Alberta.

In an update today, Canadian Natural said there is no risk to humans, but that 16 birds, seven small mammals and 38 amphibians have been killed.

As The Globe and Mail's Carrie Tait reported earlier this month, the bubbling bitumen has killed frogs, beavers and other animals.

The seepage – the equivalent of thousands of barrels - at first affected four Primrose areas covering 20.7 hectares. Most recently, it also affected a body of water the company has not identified, leading to regulatory restrictions on its operations.

"The bitumen emulsion seepage is now controlled to specific containment areas where it is effectively recovered as it reaches the surface," Canadian Natural said today.

"As a result of the company's successful active clean-up efforts, approximately 6,300 barrels of bitumen emulsion has been collected to date, with the company now focusing on a reduced impact area of 13.5 hectares," it added in a statement.

"The rate of bitumen emulsion seepage in all four locations has declined as expected and now totals less than 20 barrels per day."

The company said it thinks the troubles are the result of "mechanical failures" of wellbores, or drilled-out holes. Canadian Natural uses high-pressure steam in a three-decade-old process that melts the bitumen, allowing it to come to the surface.

"In over 30 years of using the current steaming and extraction method in the Primrose area, there have been few bitumen emulsion seepages to surface," the company said.

"This is due to the fact that most potential wellbore failures are corrected before steaming," it added.

"In cases where potential wellbore failures are not repairable, steaming strategies can be modified, to prevent these types of incidents from occurring in the future. A complete review is ongoing and Canadian Natural has a specialized team focused on investigating wells in the impacted areas for any potential required remediation work."

The company has restricted steaming in some Primrose areas amid a regulatory probe, but said it still thinks it will meet its 2013 production targets.

The Alberta Energy Regulator ordered Canadian Natural to suspend steaming at part of the project earlier this year in response to the first three incidents. It then ordered further restrictions in late June with the fourth seepage.

Canadian Natural's troubles comes amid heightened environmental scrutiny of the Alberta oil sands, particularly given the raging debate over TransCanada Corp.'s push for its Keystone XL pipeline in the United States.

GDP tame
Canada's economy expanded by a tame 0.2 per cent in May, picking up slightly from April's 0.1 per cent, held back by a drop in oil sands output.

It marked the fifth month in a row that gross domestic product has increased, Statistics Canada said today.

The services sector, buoyed by consumer spending, was largely responsible for the gains, but there was a "notable decrease" in Canada's resource industries, The Globe and Mail's Barrie McKenna reports.

The retail industry chalked up an increase of 1.8 per cent, primarily because of autos flying off the lots, but also because of building supplies and garden equipment, the federal agency said.

Mining was little changed, though oil and natural gas production contracted by 2.2 per cent, partly because of maintenance.

Manufacturing declined by 0.3 per cent.

Today's reading puts second-quarter economic growth on track for an annual pace of about 2 per cent, economists said, still better than the Bank of Canada has projected.

The June measure is expected to be hit by the floods in Alberta and a major construction strike in Quebec.

"The economy posted gains in the first two months of Q2 which would, on their own, set up for growth in the quarter to be only slightly lower than Q1's 2.5-per-cent pace," said assistant chief economist Dawn Desjardins of Royal Bank of Canada.

"However the flooding in Alberta and the construction sector strike in Quebec are expected to contribute to June GDP declining 0.3 per cent," she added in a research note.

"As a result, the moderation in Q2 growth is likely to be more substantive and we forecast that the economy's growth rate slowed to 1.7 per cent. That said, the hit to growth in June, due to these factors, is expected to be quickly reversed in July as construction activity in Quebec returned to more normal levels and the repair and rebuilding in Alberta got underway."

The Canadian number was something of a disappointment for economists who had been looking for growth closer to 0.3 per cent.

In the United States, however, the latest economic reading was better than expected, showing the economy expanded at an annual pace of 1.7 per cent in the second quarter.

Europe makes gains
Europe has chalked up the tiniest of wins on the jobs front, but remains crippled by high unemployment.

The jobless rate dipped to 10.9 per cent in the 27-member European Union in June, down from 11 per cent a month earlier, while it held at 12.1 per cent in the smaller, 17-nation euro zone.

The number of people without work declined by 32,000 in the EU and 24,000 in the monetary union, according to data released today by the Eurostat agency.

Still, Almost 26.5 million people in the EU can't find jobs, more than 19 million of them in the euro zone.

And countries such as Greece and Spain remain hobbled by jobless rates of 26.9 per cent and 26.3 per cent, respectively.

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