NEB says TransCanada subsidiary must stop drilling under Athabasca River

CALGARY – The National Energy Board has ordered a subsidiary of TransCanada Corp. (TSX:TRP) to immediately stop drilling under the Athabasca River in Alberta’s oilsands area after a potentially toxic substance got into the water.

The order against Nova Gas Transmission Ltd. follows four separate incidents — one in October and three this month, said NEB spokesman Darin Barter.

In addition to the spill, the regulator said there was riverbank erosion.

The NEB is investigating how much drilling fluid was released and what chemicals were in it, Barter said.

“There is the potential within that drilling mud where the additives aren’t approved and they may be toxic.”

No harm to wildlife has been reported and the regulator is working alongside the federal Fisheries and Environment ministries as well as Alberta’s Environment Department, Barter added.

The company was installing pipe for its McDermott Extension natural gas pipeline project about 75 kilometres north of Fort McMurray, Alta., when the incidents took place.

The NEB said the company is in non-compliance with NEB rules for failure to adhere to its environmental protection plan.

TransCanada spokesman Mark Cooper said a subcontractor lost “small amounts” of drilling mud while drilling horizontally under the river, about 15 to 20 kilometres north of the hamlet of Fort McKay.

“While great care and attention goes into preventing this from occurring, the released drilling muds were composed of bentonite clay and water and do not pose an issue for humans or wildlife,” said Cooper.

“TransCanada responded quickly and voluntarily shut down drilling activities, and notified the appropriate provincial and federal government agencies,” he said.

Given the strong flow of water in the river, the clay-based material dispersed quickly, he added.

“We are working with regulators and government agencies, and will not resume drilling before they approve our ongoing plans. These plans will also identify the completion of any required environmental assessments and testing.”

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Note to readers: This is a corrected story: An earlier version said the pipeline was northeast of Fort McMurray