Total E&P Canada will apply to abandon its Joslyn thermal oilsands pilot project north of Fort McMurray, the Alberta regulator says in a report released Tuesday that blames the company in part for an explosive release of steam four years ago.

The Alberta Energy Resources Conservation Board recommends no further action be taken against the company in spite of its conclusion that Total exceeded the amount of steam pressure it was allowed to use, leading to the violent blowout on May 18, 2006.

In its report, the ERCB notes that no one was injured and no harmful gases were released but the steam release “caused a surface disturbance about 125 metres by 75 metres, with rock projectiles travelling up to 300 metres horizontally from the main crater and a plume of dust about one kilometre long stretching to the southwest of the release point.”

News that Total plans to abandon the site follows a report last April from the company’s French parent, Europe’s third-largest oil company, that said its Canadian arm has suspended and may dismantle the steam-assisted gravity drainage pilot project.

In SAGD, steam is injected into an underground oilsands formation through one well to make the sticky bitumen flow and the resource is collected and pumped out through a second well.

Total SA went on to say last spring the project did not reach the expected 10,000 barrels a day production plateau “due to constraints on the pressure of the steam being injected.”

ERCB spokesman Bob Curran confirmed Tuesday that the regulator reduced Total’s maximum allowable steam pressure for the project after the incident in 2006.

He said the ERCB can’t fine companies that disobey the rules but it can make operational changes.

“We’re just looking at it from the standpoint of what is required operationally to ensure that public health and safety and protection of the environment and protection of the resource are all considered,” he said.

“Ordering them to operate at a reduced pressure was directly connected to the event that occurred and until they could address the concerns and meet the requirements, they weren’t allowed to increase that operating pressure.”

Total’s Calgary spokeswoman, Elizabeth Cordeau-Chatelain did not immediately return phone calls.

Simon Dyer, oilsands director for the environmental group Pembina Institute, said the steam release proves that not all of the hazards of in situ oilsands projects are understood and the industry must be regulated as strictly as oilsands mining.

“It is a concern that Total was operating at steam pressures higher than it was approved for,” he said. “It’s surprising there is no penalty associated with that.

Total wrote an 1,100-page technical report into the incident about two years ago.

The ERCB notes that the incident is the only time that a SAGD operation in Alberta has had a cap rock breach that resulted in a steam release to the surface.

The ERCB added the SAGD well pair involved in the incident and three adjacent well pairs were shut in immediately and Total was required to implement extensive monitoring.

The ERCB said it also deferred approval of a proposed project expansion pending the outcome of the incident investigation. It said thermal project applications are now required to provide more geological information on the cap rock.

Curran said is now “very unlikely” that such a steam release could occur again.

Total is still planning an oilsands mine at Joslyn, 65 kilometres north of Fort McMurray, which could eventually produce as much as 200,000 barrels per day from two equal-sized mining phases.

It and partner ConocoPhillips recently said they plan to increase production at their Surmont thermal project to 110,000 barrels per day from current output of 27,000 bpd by 2015.

DHEALING@THEHERALD.CANWEST.COM