Employer contravened both Environmental Protection and Enhancement Act and Oil and Gas Conservation Rules, says regulator
Alberta Energy Regulator (AER) has issued a $15,000 administrative penalty to McLand Resources Ltd. for failing to report a sour gas release, not activating an Emergency Response Plan (ERP), and allowing fugitive emissions to extend beyond the lease boundary.
According to the AER, the incident occurred in March 2023, at an oil battery near Tees, Alberta.
The release involved sour gas containing hydrogen sulphide at a concentration of 108,500 parts per million (ppm), a level that exceeds the threshold for immediate danger to life and health.
“The classification of major is appropriate,” the AER stated. “The evidence demonstrates that McLand was aware of the release on March 27, 2023, and took measures to stop the release, but did not report the release to the Director.”
The release was reported to the regulator only after a member of the public contacted Alberta’s Environmental and Dangerous Goods Emergencies (EDGE) reporting telephone line. The AER inspector then followed up with McLand.
The AER found that McLand Resources Ltd. contravened Section 110(1)(a) of the Environmental Protection and Enhancement Act (EPEA) by failing to immediately report the gas release.
Uncontrolled sour gas release
The length of time of the gas release was also a big issue, according to AER. The sour gas release lasted for over three hours.
The regulator determined that McLand did not have a functioning callout system to alert field operators to the tank rupture.
“The duration of the release allowed the sour gas to travel several kilometres downwind and become a concern and a nuisance to the individuals who reported it,” the AER stated.
No injuries were reported, but the regulator noted that exposure to such high concentrations of H₂S could have resulted in severe health effects or fatalities.
“If there would have been any individuals closer to the release location, the outcome may have been worse,” the AER said.
Emergency response plan not activated
McLand also failed to classify the incident as an emergency and failed to implement an emergency response plan (ERP) as required under Directive 071 of the Oil and Gas Conservation Rules (OGCR).
This is the case despite the employer receiving multiple complaints about strong hydrogen sulphide odours through its emergency line, according to AER. The company also failed to notify nearby residents about the sour gas release, and failed to assess the incident as an emergency under Directive 071 requirements, said the regulator.
“As McLand did not activate their ERP, notifications were not made to individuals near the 11-8 battery during the emergency,” the AER reported.
Fugitive emissions and regulatory compliance
The AER found McLand in violation of Directive 060 and Section 7.035 of the OGCR for failing to prevent fugitive emissions from crossing the lease boundary.
Hydrogen sulphide “has the potential to be lethal. It is critical that it is rigorously monitored and managed by the licensee,” the AER stated. “Failure to prevent the release of [hydrogen sulphide] odours from going off lease is contrary to the regulatory requirements, is a threat to human health and safety, and erodes public trust.”
While no environmental damage was reported, the AER classified the contravention as major due to the concentration of H₂S and the duration of the release.
Regulatory action and company response
The AER met with McLand representatives on Jan. 27, 2025 to review the investigation findings and penalty assessment.
“McLand said they got lucky with this incident and it was a wake-up call,” the AER noted. The company admitted that “at the time of the incident, no one at McLand knew how to use the ERP and that there was no site-specific ERP.”
McLand stated that it has since developed a site-specific ERP and a quick reference guide for operators.
The company did not dispute the regulator’s findings.
“McLand said they did not have any additional information to provide for consideration and they agree with the assessment,” the AER reported.
The AER applied the maximum allowable penalty of $5,000 per contravention, resulting in a total fine of $15,000.
