Rainbow pipeline to remain shut until at least end of June

EDMONTON — A pipeline that was shut down in northern Alberta in April after spilling 28,000 barrels of oil is not expected to resume crude shipments until at least the end of June.

Arial photos of the cleanup of the Rainbow pipeline break northeast of Peace River

Arial photos of the cleanup of the Rainbow pipeline break northeast of Peace River

EDMONTON — A pipeline that was shut down in northern Alberta in April after spilling 28,000 barrels of oil is not expected to resume crude shipments until at least the end of June.

Plains Midstream Canada says it is working to complete integrity checks on parts of the northern section of the Rainbow line.

But the company says the work has been slowed by factors beyond its control.

“We are working to complete the remaining digs by the end of June,” Plains Midstream wrote in an email Thursday.

“We’re challenged by the remote location of some of the dig sites, and working with summer access conditions on muskeg terrain, as well as unpredictable factors such as forest fires and inclement weather.”

Plains said once the integrity checks are complete, it will pass on the results to Alberta’s Energy Resources Conservation Board for assessment. The company said it does not have a firm timeline to restart the pipeline.

The closure has caused problems for pipeline users such Imperial Oil (TSX:IMO), which says it has curtailed production in the Northwest Territories and has had to put more crude into storage. It has also created headaches for the town of Norman Wells, N.W.T., which purchases byproduct natural gas from Imperial Oil wells to heat its homes and businesses.

The town, which has been in a state of emergency since May 6 because of the Rainbow closure, fears it could lose its natural gas fuel source by mid-July. Some residents are already using a temporary propane system as a backup, but it can’t be used once temperatures go below freezing.

Mayor Dudley Johnson said the pipeline shutdown has already cost the community of 850 permanent residents more than $800,000 in extra costs. The town is now asking the federal government to consider its fuel crisis a national emergency and provide some financial relief.

Johnson said he spoke with officials at the federal Natural Resources Department on Wednesday along with Western Arctic MP Dennis Bevington.

“Our biggest concern right now is that if this goes on for an extended period we do not have the financial ability to keep paying those bills,” Johnson said.

“This is a unique situation. No one expected that when that pipeline closed that this town way up in the Northwest Territories would be affected by it. This was caused by factors that we had no control over.”

The Rainbow closure also forced Enbridge (TSX:ENB) to shut down its Norman Wells pipeline, which feeds into Rainbow. Ten days later, Enbridge reported a leak of up to 1,500 barrels of oil south of the community of Wrigley, N.W.T.

Jennifer Varey, an Enbridge spokeswoman, said the line has since been repaired. Crude shipments have resumed, but at a reduced rate because of the Rainbow shutdown.

Both Plains Midstream and Enbridge say they continue to clean up their spills. Plains said Thursday it has now recovered almost half of the oil that was released.