Imperial Oil could shutter Norman Wells operation years early without timely repair to line

Imperial Oil and Sahtu leaders are locked in a regulatory tussle over a pipeline repair project on the Mackenzie River in the N.W.T., which the oil company says is vital for it to continue producing oil near Norman Wells.

Sahtu leaders are calling for a new environmental assessment to be conducted for Imperial Oil's proposal to drill below the river to replace a damaged flowline between the Goose and Bear islands.

Exchanges posted last week to the Sahtu Land and Water Board highlighted potential environmental concerns from the K'ahsho Got'ine Committee in Fort Good Hope, its contention that the board is failing to consult and involve the communities, and Imperial Oil's worry about a potential electricity outage in the winter if the project gets delayed.

Imperial Oil has also asked the federal Canada Energy Regulator (CER) to extend its operating licence, which is set to expire at the end of 2024, for another 10 years, until 2034. 

The application is still under review and awaiting approvals from both the CER and the Sahtu Land and Water Board. 

In an email, the CER said the K'ahsho Got'ine Committee has until Sept. 20 file written arguments — a deadline that was extended due to delays caused by wildfires. After that, Imperial Oil has until Sept. 25 to reply.

Everything hinges on 'timely' approval, says Imperial Oil

The line that needs replacing was damaged in 2022 and spilled treated water that had been used in the company's operations into the river. Since then, the Norman Wells facility has had to reduce its production.

In an email Friday, Imperial Oil spokesperson Lisa Schmidt said the company needs a regulatory decision by Oct. 1 in order to take advantage of the winter road season and get equipment delivered so the line can be replaced in 2025.

"If we can complete the project in 2025, we expect our operation to continue for another five to 10 years," Schmidt wrote.

"Without timely regulatory approvals, the operation is likely to shut down by 2026, and potentially even earlier, due to insufficient gas production."

Lower production also means the company may need to shut down its operations temporarily this winter, Schmidt wrote.

"While the risk is currently low, a potential scenario could involve an approximately three-month outage during the coldest period, when electricity demand is highest," Schmidt wrote.

"This winter, the natural gas we produce may not be sufficient supply for our operation as well as the town."

Imperial Oil says it has notified the Northwest Territories Power Corporation and the Town of Norman Wells of that and is working to get enough diesel into the area to offset that possibility.

Scare tactic, says chief

Collin Pierrot, the chief of Fort Good Hope and a member of the K'ahsho Got'ine Committee, pointed to a new diesel plant in Norman Wells as an option.

"They're just using it to scare the community of Norman Wells," he said of Imperial Oil's notice.

"We hope that Imperial's letter won't compromise the regulatory process."

Pierrot said the K'ahsho Got'ine Committee consists of Sahtu leaders in the region. They have asked for an environmental assessment to ensure that the replacement is safe and would not further impact their rights to clean drinking water. 

"Imperial itself indicated that reasons for the Line 4-90 spill in 2022 were unprecedented dredging of the Mackenzie River due to low water levels," Pierrot said. 

The committee has disputed Imperial Oil's argument that the project may be exempt from the environmental assessment due to there being no significant alterations in the operation.

Pierrot said the environmental conditions around the operation have changed since the last environmental assessment was done in 1980. He said there has been more development within the Mackenzie River basin that affects water quality.

"Climate change is having a great effect on our lands — not only our lands, but we can assume that this is happening under [the] Mackenzie riverbed," Pierrot said.

Pierrot said the community cannot depend on what Imperial Oil calls safe. He said when the pipeline leaked in 2022, it took four days for Imperial Oil to notify Fort Good Hope, which is 140 kilometres downstream of Norman Wells.

For its part, Imperial Oil has argued an environmental assessment isn't necessary, and would delay progress and waste resources.