Plains Midstream Canada says when the spill was discovered Thursday night it closed off its network of pipelines in the area.
Tracey McCrimmon, executive director of a community group that works with the industry, said it was rural homeowners who first raised the alarm about an oil pipeline spill.
She said people who live just north of Sundre phoned in reports Thursday night of smelling rotten eggs — the telltale odour of sour gas or sour oil.
"The first call that we got was at 8:40 pm. There was an odour complaint. We had multiple calls of a rotten egg smell," said McCrimmon, director of the Sundre Petroleum Operators Group.
"We called all of the oil and gas operators within six kilometres of the area. They were able to source the odour within an hour."
The company said the oil spilled into Jackson Creek near the community of Sundre, about 100 kilometres from Red Deer. Jackson Creek flows into the Red Deer River.
Recent heavy rains have swollen streams and rivers in the area, some to near flood stage, and local officials are concerned the oil will spread more quickly down the system.
"There's oil in the river and the river is moving very quickly right now because of the recent rains and meltwater," said Bruce Beattie, reeve of Mountain View County, which is on the river system.
"Certainly anything that is coming out of the pipeline or that did come out of the pipeline is certainly moving quickly down stream.
"It's going to be a major environmental concern for sure."
The region around Sundre is considered pristine wilderness by many in Alberta. It's a common getaway area for people in Calgary and popular with anglers and hunters. The area where the oil spilled is sparsely populated and mostly ranch land.
Alberta Environment spokeswoman Jessica Potter said communities and individuals downstream of the spill have been told not to use river water until further notice.
"Residents in the area have been notified that a spill has taken place," she said.
"Water intakes have been shut at all facilities downstream and we are encouraging people to shut-in their water and not draw from the river at this time."
Premier Alison Redford headed to nearby Dickson Dam to hold a news conference Friday afternoon where she said the spill had been contained to the Glennifer reservoir and crews were working to minimize the environmental impact.
She said there will be an investigation but added that Alberta's pipeline system is supported by a strong regulatory framework that serves as a model for other jurisdictions.
"It's my expectation that the minister of environment and the minister of energy, as well as the (Energy Resources Conservation Board), will have to review those investigations once they're completed to determine the cause of this incident and then to take whatever steps might need to be taken in order to prevent this in the future."
She said until the investigation is complete, it's too early to say whether aging infrastructure is to blame.
"Albertans have an expectation that the infrastructure that we have in place ... is strong," she said.
"It is unfortunate when these events happen. We are fortunate in this province that they don't happen very often, and we can have some confidence that when they do happen, we have plans in place to deal with them."
But Mike Hudema of Greenpeace said the damage has already been done to the central Alberta ecosystem. He wants a halt to approval of any new pipelines until changes and upgrades can be made to the existing infrastructure.
Green Party Leader Elizabeth May said changes need to be made to existing laws.
"I don't think we're paying adequate attention to what happens in real life versus what happens in the fossil fuel wonderland where everything goes wrong," she said.
The community of Sundre is upriver from the spill, but Red Deer is downstream.
The City of Red Deer has been told booms will be set up on the river near the Dickson dam and Gleniffer reservoir.
Leslie Chivers, a city spokesman, said people in Red Deer have been told there is nothing to worry about.
"I hesitate to use the word concern because if they can clean up the spill, then life is normal," Chivers said. "We are monitoring the situation at this time. And if things change, then we'll advise residents of further actions that will be happening."
Plains Midstream said it was light sour crude that spilled. It said Alberta energy regulators and government health and environment officials are monitoring water and air quality in the area.
"Light sour crude oil has a strong petroleum odour but this odour does not pose a health or safety risk to the public," the company said in a news release.
Company vice president Stephen Bart expressed regret.
"We deeply regret this incident and are working to ensure we're doing all we can to limit the extent of the release and any community and environmental impacts," he said in a statement. "We're committing the resources necessary to mount a full-scale response."
Staff at the Gleniffer Lake Resort on the shores of the reservoir said the company told them to stop using water from the lake and was hauling fresh water in for them. Otherwise, they said they hadn't noticed the spill.
The spill comes as Plains Midstream continues to clean up an April 29, 2011, pipeline spill of 4.5 million litres of oil northeast of Peace River, Alta.
That leak — one of the largest in Alberta history — happened in a remote area on the 772-kilometre, 44-year-old Rainbow line between Zama, Alta. and Edmonton.
Early estimates suggested that spill was only several hundred barrels of oil. It wasn't until four days later that the energy board reported the full extent of the leak from a centimetre-wide crack around the bottom of the pipe.
Energy critics and conservation groups say the spill near Sundre raises new questions about pipeline safety, monitoring and the enforcement of environmental regulations.
"Albertans should be extremely concerned that these pipeline spills keep happening and the weak detection systems in place," said Madeline Wilson of the Alberta Wilderness Association.
Alberta's Opposition Wildrose Party called the spill further evidence the government is failing to effectively enforce the energy industry.
"Our regulations are no good unless we have the boots on the ground to enforce them," said Wildrose environment critic Joe Anglin. "There is no reason why these kinds of spills should be occurring in Alberta."
Alberta's Energy Resources Conservation Board estimates there are about 400,000 kilometres of energy-related pipelines criss-crossing Alberta.
The conservation board is responsible for regulating pipelines that begin and end in Alberta. Pipelines that cross provincial boundaries or the U.S. border are regulated by the federal National Energy Board.
Since the Rainbow spill and a handful of less serious ones that followed, environmentalists have stepped up their calls for Alberta's regulators to review how aging oil pipelines are monitored and maintained.
But the regulator argues pipelines in the province have never been safer. It cites 2010 statistics that showed 1.6 incidents per thousand kilometres of pipeline.
(The Canadian Press, CKGY, CFFR)
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