Norwegian state oil company Equinor is having to deal with even more bad news, following release of an internal report on chronic leaks from its sprawling refinery at Mongstad on Norway’s west coast. Equinor now risks criminal charges from state environmental authorities, and admits to not knowing how much oil has leaked into the ground or what a clean-up will cost.
“We have acknowledged that we have polluted the ground,” Irene Rummelhoff, Equinor’s newly appointed executive vice president in charge of marketing, midstream and processing, told newspaper Dagens Næringsliv (DN) on Tuesday. “We have systems that measure groundwater pollution, but we don’t have a full overview over the extent of pollution in the ground. That’s what we’re now trying to determine.”
The company has reported recovering around 112,000 liters of oil from the ground so far. It still doesn’t know the full extent, however, of how much oil has actually leaked from the more than 194 kilometers of pipes running through and under the refinery, which ranks as Norway’s largest.
It’s the latest in a string of serious trouble for Equinor this year. The company has reeled from crisis to crisis, from the Corona-induced plunge in oil prices to DN‘s earlier reports of enormous losses at the company’s US operations, the political fall-out from that and then a major fire at its gas-processing plant at Melkøya in Hammerfest. That has forced closure of the facility and raised serious safety and environmental issues.
Another ‘red report’
On Friday the company was confronted with yet another so-called “red report” from internal auditors that signals the highest degree of concern and must be handled directly by top management and the board. The 150-page report charts in embarrassing detail how the refinery “seepage” may have been going on for as long as several decades.
Rummelhoff insists the company has had “good control” over leaks and spills into the sea and has “fixed” all known sources of the leaks at Mongstad. “We will continue inspections and can’t rule out finding more,” Rummelhoff told DN.
Since the vast piping systems run over a large area and are located under the refinery itself, she admitted that portions of the polluted ground may be “impossible to clean without taking down the entire facility,” while other areas can be reachable. Only after an analysis can Equinor come up with a clean-up plan.
Asked whether the pollution at Mongstad is “embarrassing,” given Equinor’s promotion of a greener and more sustainable image, she called it “unfortunate.” She insisted, however, that the oil company “is working hard every day to have consideration for the environment.”
The company’s own internal report suggests that Equinor has been more concerned with trying to control emissions and spills into the sea than seepage at Mongstad. The report even suggests that the phrase “out of sight, out of mind” came up repeatedly among employees interviewed during the internal investigation into the leaks.
“It’s a management responsibility to follow all laws, rules and regulations,” Rummelhoff told DN. “At the same time those of us in management, I mean me, haven’t had the overview to be aware of all details. We rely on a good organization.” Some of the problems weren’t reported up through the chain of command, nor was there an adequate “understanding” of the environmental demands and requirements regarding discharge at Mongstad, Rummelhoff said. She added in a prepared statement that the conditions uncovered at Mongstad “are unacceptable,” but told DN there was no danger the refinery will need to shut down.
The Mongstad refinery has been operating since 1975 for the company then known as Statoil. Mongstad is best known in Norway for its huge cost overruns during an expansion that forced the resignation of the company’s first chief executive, Arve Johnsen.
Read Equinor’s own account of the problems at Mongstad here (external link to Equinor’s website).