A northern Alberta oil sands operator has been ordered to shut down after repeatedly failing to meet its regulatory obligations.

Alberta’s energy regulator has issued an order requiring Calgary-based Sunshine Oilsands Ltd. to suspend its wells, facilities and pipelines.

The order, issued Nov. 14, requires the operator to post a security deposit of more than $6.1 million, which is 100 percent of the company’s estimated dormant liability.

According to the order, the operator must also provide the regulator with a series of “reasonable care measures” it will take to improve the operation of its sites.

The order highlights a series of violations related to the company’s West Ellis facility, including broken wind turbines, leaking pipes and containment units for the industrial site that were at risk of spillage.

The SAGD (steam assisted gravity drainage) oil sands facility is located in the northwestern portions of the Athabasca oil sands, approximately 60 kilometers west of Fort McKay.

“The company has repeatedly failed to comply with regulatory requirements and address compliance issues in a timely manner,” the regulator said in a statement.

Sunshine Oilsands – an oil sands exploration, development and production company – must immediately report any hazards that pose a risk to public safety or the environment, the regulator said.

“ARE issued this order to ensure that Sunshine Oilsands licensed sites will not pose a risk to public safety or the environment,” the regulator said in an advisory.

“Failure to comply with this order may result in the escalation of foreclosure, which could include an order to abandon.”

Broken turbines, leaking pipes

According to the order, the wind turbines used to generate power at the site fell into disrepair.

One of them, known as the North Turbine, was still in use despite being “inoperable”, the regulator said. The turbine’s heat recovery system was broken.

The south turbine was also broken, but the operator told the regulator it would not be repaired because of the costs associated with the necessary repairs.

At the time the order was issued by the AER, none of the turbines had been repaired and the company continued to operate the broken North turbine.

Questionable limitation

Some secondary containment sites were also of concern to inspectors. Piling boots used to secure four tanks at the West Ells facility fell into disrepair, according to the order.

Pile boots are specialized attachments used in the installation of piles, which act at the base of such tanks, especially in swampy and uneven landscapes.

The problem with the containment tanks was reported to the AER in May 2023. The company told the regulator in November of that year that the ruptured tanks would be taken out of service to mitigate the risks of a leak.

On October 16 this year, an AER inspector discovered that one of the faulty tanks had been put back into service without repairs or additional measures to contain a potential leak.

On the same day, an inspector discovered that steam was actively leaking from a pipeline at three separate locations along the line.

According to the order, the inspector was told by a Sunshine operator that the company was aware of the problem as early as a week before.

Sunshine received a notice of non-compliance at the time for not immediately reporting the three separate versions.

The regulator also found that the company did not investigate emissions as required and did not have an adequate leak detection program.

According to the company’s website, construction on the West Ells building began in 2012.

SAGD uses horizontal wells and injected steam to heat the bitumen and bring it to the surface.