Oil and Gas

Canadian regulator halts TransCanada pipeline construction following spills

CALGARY, Alberta, Nov 20 (Reuters) - Canada’s national energy regulator has halted construction on a new TransCanada Corp natural gas pipeline after reviewing evidence that it may have spilled a toxic drilling fluid into a major Western Canadian river, a spokesman said on Friday.

The National Energy Board (NEB) said it issued a safety order on Thursday after reviewing records submitted by TransCanada related to four separate spills of drilling fluid into the Athabasca River, a waterway in northern Alberta. In a separate move earlier in November, the U.S. administration rejected TransCanada’s Keystone XL pipeline project.

A TransCanada subcontractor caused the spills in Alberta while drilling to install a natural gas pipeline under the river, said company spokesman Mark Cooper. He explained that the drilling fluids consisted of bentonite clay and water, which he said would not pose an issue for humans or wildlife and would be dispersed quickly in the rapidly flowing water.

“We are working with the regulators and government agencies, and will not resume drilling before they approve our ongoing plans,” said Cooper. “We will be presenting additional information to the NEB shortly to respond to questions they have raised.”

The NEB said the spills occurred between Oct. 23 and Nov. 7 on the McDermott Extension, a natural gas pipeline under construction by a TransCanada subsidiary, north of the oil sands hub of Fort McMurray.

NEB spokesman Darin Barter said the regulator is now awaiting lab results to determine whether the fluids used were toxic. He said that companies were not supposed to be using toxic additives during this type of drilling.

“We obtained material over the last several days that called that into question that maybe the company used additives in that fluid that were toxic,” Barter said in an interview. “So that was the impetus for the inspection officer order and the formalization of (asking them) to halt all operations on the site.”

Barter said the NEB also informed the federal fisheries and environment departments about the incidents. He added that the NEB was leading the investigation but did not immediately have inspectors on the site.

The investigation comes as TransCanada pursues efforts to promote its proposed Energy East pipeline project that, if approved, would transport up to 1.1 million barrels a day of crude from Alberta across the country to Eastern Canadian refineries and the Atlantic coast. (Reporting By Mike De Souza; Editing by Diane Craft)