Inspectors found a warped, near-failing boiler, leaking steam valves, fractured gas lines and unpurged pipelines with undetected leaks
An Alberta Energy Regulator (AER) hearing panel has upheld orders forcing Sunshine Oilsands Ltd. to permanently shut down and decommission its West Ells thermal project, according to a recent report.
The Calgary-based company's appeal was dismissed after commissioners concluded Sunshine could not be trusted to bring the site, located north of Fort McMurray, into compliance, CBC News reported.
The regulator suspended operations in November 2024 and ordered abandonment of the assets in May 2025, citing non-compliance and worsening finances. Sunshine had argued restarting production was the only way out of a cash-flow crisis.
Commissioners rejected that argument. "Sunshine attributed many of the major non-compliances to mistakes or lack of funding. Neither of these constitute a valid reason for not complying with AER requirements," the panel wrote, according to the CBC report.
Safety and workforce failures
Hearing documents describe workers going unpaid for months, in some cases more than a year, at the remote site reachable only by a 52-kilometre dirt road described as barely passable, according to CBC.
Inspectors found a warped, near-failing boiler, leaking steam valves, fractured gas lines and unpurged pipelines with undetected leaks. Both power turbines were dead, and gas-detection safety devices had been bypassed.
Environmental monitoring stopped entirely at one point because Sunshine had stopped paying workers and contractors, triggering 19 separate monitoring violations. The AER's compliance branch told the hearing that "a promise that one will comply with a regulatory regime is not the same as compliance."
Sunshine told the hearing it needs roughly $76 million to restart West Ells. The regulator estimated regaining control and completing repairs would cost at least $37 million, not including $34 million in unpaid municipal taxes and outstanding wages.
The Orphan Well Association (OWA) took custody of the site in February 2025. OWA president Lars De Pauw told CBC News the assets are not orphaned, since Sunshine remains the responsible owner, adding the order is "quite minor relative to other work" the association manages.
