Alberta regulator lays charges against Imperial for failing to contain, report oilsands berm overflow

Imperial Oil is facing nine charges for allowing millions of litres of contaminated wastewater to leak from its Kearl oilsands mine in northern Alberta, and for failing to mitigate the environmental damage.

The move by the Alberta Energy Regulator (AER) pleasantly surprised a local First Nations leader and some environmentalists, including Ecojustice staff lawyer Zachary Biech.

"It's a sign that the pressure and scrutiny that members of the public and members of the media have been putting on Imperial and the AER for the spill incidents is having an impact," Biech said Friday.

The charges announced Friday are in connection to a January 2023 overflow of industrial wastewater at the company's Kearl mine, about 70 kilometres north of Fort McMurray, Alta.

The berm overflow was the second of two significant leaks at the Kearl mine, which put Alberta's regulatory practices in the spotlight and raised questions about transparency in the oilsands. The first of the two incidents, which happened in May 2022, was known only to the company and the AER for nine months.

In a statement Friday, the regulator said Imperial faces nine charges in connection with a release from an overflowing berm that was reported to the AER on Feb. 4, 2023 — four days after the leak occurred.

The incident resulted in the release of 5.3 million litres of tailings-contaminated wastewater from a catchment pond at the northern edge of the Kearl mine.

The charges allege Imperial failed to immediately report the release to the regulator as required, and failed to take adequate steps to contain and mitigate the damage.

The company has also been charged for releasing a harmful substance into the environment and for causing damage to public land. 

Six of the charges were laid under the Environmental Protection and Enhancement Act. The other three were laid under the Public Lands Act.

The company's first appearance in court is set for Feb. 26 at the Alberta Court of Justice in Fort McMurray.

When Imperial detected the first seepage from a pond in May 2022, neither the company nor the regulator kept local First Nations or provincial and federal environment officials briefed about the potential for contamination. Downstream, the Northwest Territories government was also kept in the dark.

The public learned about the first leak in February 2023 in an environmental protection order from the regulator, after millions of litres of runoff and wastewater escaped from another pond at the Kearl site.

The delays in reporting both leaks to the federal government and Indigenous communities downstream of the mine has raised ongoing concerns about regulatory oversight within the industry and prompted a series of investigations, including an ongoing probe by the federal government.

Alberta is required to notify the federal government of such leaks within 24 hours.

The delay in informing the public prompted anger and frustration from downstream First Nations communities and other residents, who hunt on the land and drink the water. Environmental advocates were upset too.

The regulator previously fined the company $50,000 in August 2024 in connection with the original release at Kearl, saying it violated environmental laws. The AER also required the company to make mitigation plans and research the environmental impact of the leaks.

Ecojustice represents Athabasca Chipewyan First Nation (AFCN) and non-governmental organizations challenging the $50,000 fine, arguing it's a pittance for the breach of trust.

AFCN Chief Allan Adam said Friday the charges against Imperial are welcome news for community members. However, he remains skeptical that the AER will hold the oil industry accountable for environmental harm.

Adam said First Nations should be allowed to do their own sampling in the affected areas, because he doesn't trust Imperial or the AER's environmental testing.

The AER investigation into leaks at the Kearl site is complete, agency spokesperson Renato Gandia said in an email.

Laying charges is evidence that the regulator "remains diligent and proactive in monitoring compliance and addressing infractions to ensure the safety of the public and the protection of the environment," Gandia wrote.

The Alberta government is working with the Northwest Territories government to improve information sharing under an existing water agreement, according to a statement from Ryan Fournier, press secretary to Alberta Environment and Protected Areas Minister Rebecca Schulz.

'We deeply regret'

Biech, the Ecojustice lawyer, hopes Imperial does not negotiate a plea bargain in court with prosecutors, he said.

Six of the charges laid fall under the Environmental Protection and Enhancement Act, which carries maximum fines for corporations of $500,000 or $1 million, depending on the offence. Biech said some of the fines can apply on each day a breach takes place.

Courts can also impose conditions companies must meet to prevent further potential environmental harm, he said.

Imperial Oil officials have said that the berm overflow at a spillway on the northern edge of the Kearl site began on Jan. 30, 2023. The company said it was not discovered until days later when the snow around the drainage pond began to stain.

In a statement on its website Friday, Imperial said it was aware of the new regulatory charges and were "assessing next steps." 

"We recognize this incident caused concern in the community and we deeply regret this happened," Imperial said.

The company says it has made changes to prevent further leaks from ponds and are confident the improvements work.

Imperial officials maintain the release from its drainage pond has caused no damage to local wildlife, fish or nearby river systems.

Meanwhile, the initial leak that went unreported for nine months continues to seep along the northern boundary of the mine, both on and off the site. Recent testing has found evidence of groundwater contamination from the ongoing seepage within approximately one kilometre of the site, the company said.

Imperial said it has installed an expanded control system, more than tripling the total number of pumping and monitoring wells on site to help monitor and contain the leaks.