Canadian oil company promises to improve leak prevention

January 31, 2014

Earlier this month, Enbridge, Inc. announced that it would be having an independent audit of its pipeline conducted in order to better detect leaks and improve public safety.

According to a recent article on The Calgary Herald, the announcement was part of the company's broader corporate social responsibility report. The company is planning to build a $6.5-billion Northern Gateway pipeline, which will reportedly carry diluted bitumen from oil sands fields in Alberta to an export facility. Opponents of this development have questioned whether the company is opening itself up to the potential for devastating spills along the pipeline, or by tankers carrying oil off the coast of British Columbia. There have been demands for more scrutiny of the work, and even an outright halt.

Enbridge president and CEO Al Monaco told the news source that the goal of this effort is to reassure the public while also improving the future pipeline's performance.

"We are being challenged to achieve unprecedented levels of performance in safety and environmental protection while at the same time realizing the social and economic benefits created by new energy opportunities," he said. "We are responding in ways that are fundamentally changing the way we do business."

This should not come as a surprise. This blog has already featured a post about the growing concerns people have regarding the potential environmental threats posed by increased North American oil production. In fact, the U.S. alone is expected to see its production rate grow faster than the nine next largest oil producing countries combined, over the next two years, according to a report from PIRA Energy Group. At the same time, the cost of complying with environmental regulations is rising.

For this reason, and as we have mentioned before, oil and gas companies need to prepare themselves for unexpected environmental liabilities the way Enbridge is planning on doing. The consequences of not doing so can be severe, as Chevron learned last year when a ten-inch pipeline carrying liquefied petroleum gas through a town south of Texas exploded, setting several vehicles on fire and forcing a number of buildings to be evacuated.

Such disasters can be expensive—especially if injuries happen as a result—and they can also reduce the public's faith in the ability of energy companies to manage themselves.

For its part, Enbridge has not been without problems during the past several years. The company's spill figures show that in 2012 it spilled 10,224 barrels of oil, compared with only 2,366 barrels in the previous year. This is part of the reason why the company has pledged to spend $500 million on additional spill-prevention measures. These will include thicker pipes, especially when crossing rivers. There will also be more staff members at pump stations.

This is an investment. After all, preventing oil spills carries one more important benefit apart from protecting the environment and maintaining a good image: oil that gets spilled can't exactly be sold.

That's why more companies should follow Enbridge's lead and work with environmental consultants to protect themselves from such incidents.