CNRL gets go-ahead to use low-pressure steam at troubled oilsands site

CALGARY - Canadian Natural Resources Ltd. (TSX:CNQ) has been given the go-ahead to resume work at part of an oilsands project in eastern Alberta where a bitumen-water mixture was found oozing to the surface last year.

But CNRL will be using a different extraction technique at Area 1 of its Primrose East oilsands site: low-pressure steamflood rather than high-pressure cyclic steam stimulation.

Company president Steve Laut told analysts last month it's "not possible" for the modified method to create the same conditions that led to the leaks.

Earlier this summer, the company asked the Alberta Energy Regulator for permission switch extraction techniques. On Monday, the AER granted CNRL's request.

"The AER applied a rigorous evaluation process and is satisfied that the modified approach will successfully mitigate potential risks of further bitumen release, either in the form of increased volume at the existing flow to surface sites, or new flow to surface incidents," the regulator said in a statement.

Environmental groups have questioned the safety of high-pressure cyclic steam stimulation, or HPCSS. With that method — often described as "huff and puff" — a well alternates between injecting steam and drawing the softened bitumen to the surface

With the modified method, steam is injected at less than half the pressure as HPCSS.

"If flow rates at the existing sites increase, or if new sites occur, the AER will immediately take action that may include ordering the company to stop steaming," the watchdog said.

Mike Hudema with Greenpeace Canada said in a statement that the decision means Alberta "still lacks a credible, independent regulator that is willing to put the public interest ahead of oil industry lobbying.

"As the first decision under new Premier Jim Prentice's watch, this is a worrying sign for people who care about the environment and for communities affected by tar sands development," he said.

Increased monitoring and other steaming restrictions imposed by the AER last summer remain in place and an investigation into what went wrong at Primrose is ongoing.

Some 1.2 million litres of the bitumen-water emulsion have been recovered and 20.7 hectares have been affected. CNRL said last month that clean-up is complete.