UPDATE 2-Suncor says leak from Colorado oil refinery contained

Thu Dec 1, 2011 6:48am IST

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* Leak from firm's refinery hits South Platte River

* Firm says leak has been contained, source not identified

* Refinery warned that stricter safety measures needed

By David Sheppard and Joshua Schneyer

Nov 30 (Reuters) - Suncor Energy said on Wednesday it has contained a leak of an oily substance near its Commerce City refinery in Colorado that was running into Sand Creek, which joins a river that supplies Denver with water.

The Canadian energy firm said it had not yet identified the source of the leak, but acknowledged it was likely coming from its 93,000 barrel-per-day (bpd) refinery in the area. It said plant operations were unaffected.

The leak comes a month after Colorado's Department of Public Health warned Suncor that it needed to take stricter measures to mitigate contamination that an investigation found was coming from the site and could threaten local water supplies.

Neither Suncor nor the Environmental Protection Agency (EPA) gave an estimate on how big the leak was, which the EPA said appeared to be a petroleum product.

A spokeswoman for the company, based in Calgary, said it was not clear if there had been a leak from one of the plant's pipelines, as reported by some media.

"Our focus is on cleanup at this point," said Sneh Seetal, a Suncor spokeswoman at the firm's headquarters in Calgary. "We do not see more product leaking."

Seetal said a Suncor crew discovered an oily sheen on Sand Creek on Monday after an unusual odor was reported by one worker.

EPA spokeswoman Karen Edson said workers were using absorbent booms to contain the substance along a 200- to 300-meter stretch of the Sand Creek. Suncor workers are also building a ditch to keep it from flowing further, she said.

Sand Creek joins the South Platte River, a major source of drinking water for the Denver metropolitan area.

Suncor's Commerce City plant recently underwent a $540 million upgrade to enable it to handle more heavy oil sands crude from Canada.

While minor spills and leaks are not uncommon near major energy facilities, a series of larger pipeline leaks in recent years and fierce resistance to a proposed major new conduit from Canada has heightened awareness of the environmental risks they pose.

PLANT CITED FOR PREVIOUS RELEASES

The EPA and Suncor said they have been managing the spill response since Monday.

Colorado's Department of Public Health and Environment issued Suncor's Commerce City plant a compliance order on October 26, 2011, a copy of which was sent to Reuters.

The order says that a department investigation indicated "that recent releases of hazardous waste and hazardous constituents on-site, are now migrating off-site in excess of applicable standards."

The order set specific dates for Suncor to show it was complying with health and safety orders at its facility.

"The seeps that began on Sunday would appear to be different from the issues that are discussed in the compliance order," said Mark Salley, spokesman for the Colorado Department of Public Health and Environment. "However, that is going to be subject to investigation."

The notice also ordered Suncor to "routinely monitor" Sand Creek and another body of water nearby.

Suncor, Canada's largest oil and gas producer, is the dominant oil sands player and expects output to hit 300,000-310,000 bpd this year, but the sector has been dogged by environmental concerns.

TransCanada Corp's planned $7 billion Keystone pipeline linking Canadian oil sands production with U.S. refiners on the Gulf Coast has been vociferously opposed by environmental groups.

The Denver Post said the Commerce City leak was first reported by a local fisherman on Sunday. Workers at the Metro Wastewater plant next to the refinery have been provided with respirators due to the stench from the fluid in recent days, the paper said.

Suncor shares rose 4 percent to C$30.72 on the Toronto Stock Exchange on Wednesday, tracking higher oil prices.

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