Pipeline spill spoils geothermal project announcement for Razor Energy

A junior oil company is announcing government funding for an environmentally friendly geothermal power project at the same time that it is cleaning up a major spill of oil and water from a pipeline in northern Alberta.

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Calgary-based Razor Energy Corp. says it will receive $5 million from Natural Resources Canada’s Clean Growth Program and $2 million from Alberta Innovates to assist in development of a $15-million to $20-million geothermal plant capable of generating three to five megawatts of electricity.

CEO Doug Bailey says the announcement had been planned for some time and it’s a coincidence the company reported the spill of more than 10,000 litres of oily water on Wednesday to the Alberta Energy Regulator.

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He says the pipeline leak was discovered after a routine aerial inspection found dead vegetation in the right-of-way above the buried pipe, adding it may have been leaking for some time.

He says liquids produced from the company’s wells near the town of Swan Hills are 95 to 99 per cent water — the oil is skimmed off the top in an oil battery and the water is pumped back into the underground formation.

AER listed the spill as “spilled water” about 13 kilometres southwest of Swan Hills.

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Lisa Mueller, Razor’s vice-president of new ventures, says the oil-water mixture is at a near boiling temperature at the wellhead, which makes using its geothermal energy potentially viable. The company is also planning to build a natural gas power plant to try to match total generation to its electricity needs at its oilfield.

“We do flyovers with helicopters and drones for anomalies, for salinity in soil and so on. And for whatever reason, this wasn’t caught,” Bailey said of the pipeline leak.

“It’s not linked to this press release at all. This is a press release that we had planned to do before the long weekend sets in so we can get people’s attention.”