Alberta oil leak has world's attention

An ongoing spill of tarry bitumen in northern Alberta is focusing the world's attention on the province's new energy regulator, says an environmental think-tank.

"The way in which Alberta and Canada is managing the oilsands has already attracted significant international attention and that's because it's not possible to point to significant progress in terms of the big environmental issues," said Chris Severson-Baker of the Pembina Institute.

"When stories like this emerge, here's another problem. The regulator doesn't seem to be in control of the situation."

For weeks now, bitumen has been oozing to the surface at an oilsands project owned by Canadian Natural Resources Ltd. (TSX:CNQ) on the Cold Lake Air Weapons Range. The leak has so far released almost a million litres of bitumen and has fouled about 20 hectares of land.

The bitumen is probably being forced to the surface through cracks in overlying rock created by the company's extraction method, which uses hot, high-pressure steam to force the product up wells.

This year's spill seems similar to a 2009 release in the same spot. After that spill, the Energy Resources Conservation Board, as the regulator was then known, allowed CNRL to resume production using lower steam pressure, even though an investigation failed to discover exactly what happened.

The Alberta Energy Regulator, which replaced the conservation board earlier this summer, now has a chance to show that it plans to conduct business differently, said Severson-Baker.

"There's an opportunity to really compare and contrast how the ERCB dealt with the first incident at this same site with how they deal with it this time," he said.

There's little doubt the world is watching.

Newspapers from the Wall Street Journal to England's The Guardian have written about the CNRL spill. It also comes at a time when Alberta's and Canada's environmental record is being considered by U.S. politicians trying to judge what the impact would be of the proposed Keystone XL pipeline, which would carry oilsands bitumen south from the oilsands to refineries on the Gulf Coast.

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