The Alberta Energy Regulator has concluded that Plains Midstream didn't inspect its Rangeland pipeline often enough, didn't pay enough attention to government warnings, failed to enact adequate mitigation measures once the leak occurred and communicated poorly with hundreds of people affected by the spill in June 2012.
"Plains failed to complete inspections of the pipeline at the required frequency according to its own pipeline integrity management program," said the regulator's report released Tuesday.
"Plains failed to apply appropriate mitigation measures according to its own hazard assessment."
The report comes as the regulator conducts an overall audit of Plains Midstream's Alberta operations. The U.S.-based company also experienced a pipeline leak in 2011 of 4.5 million litres of oil near Peace River.
"We need to be convinced that they can continue to operate safely in Alberta," said regulator spokesman Darin Barter. "We are not convinced that can be done right now."
Alberta Environment spokeswoman Nikki Booth said it is too early to determine if charges will be laid.
The 2012 spill was discovered June 7 when landowners just north of the community of Sundre began phoning in reports of smelling rotten eggs — the telltale odour of sour gas or sour oil. The spill was soon tracked to Jackson Creek, which flows into the Red Deer River.
Heavy rains had recently swollen the flow in the river to 10 times the normal amount.
The regulator concluded that the heavy flow eroded the riverbed around the pipe and exposed it. The pipeline then experienced a "guillotine failure" at a weld circling the pipe.
"The pipeline failed due to high-cycle fatigue, likely caused by vibrations induced by river flow," the report says.
Although the report concluded there were no structural problems with the 50-year-old line, the investigation found the frequency of the company's inspections met neither provincial rules nor its own guidelines.
Plains also failed to take advantage of warnings, the report says.
"Had Plains responded to the government of Alberta’s high streamflow advisory issued prior to the incident, it could have isolated, cleaned and purged the pipeline section, leaving the pipeline in a safe condition."
The immediate area around the spill is mostly ranchland. The larger area is considered pristine wilderness by many and is heavily used by campers, hunters and fishers.
The community of Sundre is upriver from the spill, but the city of Red Deer is downstream, as is the Gleniffer reservoir, a popular boating and recreation lake.
Booms to catch oil were set up on Gleniffer. The marina and campground were closed and fishing shut down. Drinking water was trucked in for people in 750 recreation lots and permanent homes. Rafting, fishing and guiding businesses were affected.
More than 170 people were at one time cleaning up the 475,000-litre spill with lake-surface skimmers and absorbent pads along the creek. Wildlife deterrents were placed along the banks to keep animals away.
Still, people reported oil pooling along the highly braided river margins and mixing with silt and sediments. Oil also collected in protected spots such as the Butcher Creek Natural Area.
The regulator criticized how Plains dealt with those affected by the spill.
"Due to concerns regarding deficiencies in Plains’s communications with stakeholders ... (Alberta Energy Regulator) communications staff had to direct Plains’s communications throughout the incident."
A spokesman from Plains Midstream was not immediately available to respond to the report.
Plains has been ordered to update its emergency response and communications plans. It must also submit a proposal detailing how the company will prevent future regulatory noncompliance.
The section of pipe that failed has since been abandoned.
— By Bob Weber in Edmonton
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