N.W.T. review board to move ahead with Imperial Oil environmental assessment

A territorial regulator has ruled that it will move forward with an environmental assessment of Imperial Oil's entire operation in Norman Wells, N.W.T. 

Sahtu Secretariat Incorporated (SSI) referred two different authorizations that Imperial needs to operate – one from the Sahtu Land and Water Board (SLWB), and one from Canada Energy Regulator (CER) – to an environmental assessment in September.

Imperial Oil had asked the board not to carry out the assessment, and both sides have made arguments in filings to the review board over the last number of weeks.

"It is essential to clarify that the board's decision is strictly limited to addressing the specific legal and procedural issues raised in Imperial's request," reads a decision letter posted to the board's website Tuesday evening. It's signed by board chair JoAnne Deneron. 

"The review board intends no harm to the interests of the Town of Norman Wells, the residents of the Sahtu, or Imperial." Rather, the letter said, its focus was on fulfilling its mandate under the Mackenzie Valley Resource Management Act and making sure treaty rights under the Sahtu Agreement were upheld. 

One of the arguments addressed in the ruling is whether those two authorizations, and what Imperial Oil plans to do under them, is considered development or not. The board said the company's applications for a water licence renewal and an operations licence did constitute a development under the Act.

The letter also addresses other arguments made by Imperial Oil and SSI. For example, it says it does have jurisdiction to consider the request the oil company made, that SSI does have the right to refer applications to environmental assessments, and that the Sahtu Agreement prevails over the resource management act. 

A spokesperson for Imperial Oil told CBC News by email Tuesday evening that the company was reviewing the decision. 

The review board's decision is separate from another environmental assessment for Imperial Oil's plan to replace a damaged pipeline.

May set precedent

The decision may set a precedent for how similar situations are dealt with in the future. 

SSI is made up of the seven Sahtu land corporations, and is responsible for administering the Sahtu Dene land claim signed in 1993. 

Imperial Oil, meanwhile, is a Calgary-based company that is majority-owned by U.S. giant ExxonMobil and which has other operations in Canada. It says it produced 447,000 barrels of oil per day and made $1.24 billion from July to September this year. 

The review board was initially going to announce its decision a little more than a week ago but said parties had made "several substantive arguments" and it needed more time to consider what it called "complex, consequential issues." 

One of Imperial Oil's arguments has been that it's exempt from an environmental assessment under the Mackenzie Valley Resource Management Act because it was permitted before 1984. 

"The operations at Norman Wells had been ongoing for decades prior to the Sahtu Agreement and at the time of permitting were anticipated to continue production for decades to follow," the company said in an Oct. 31 letter. 

Imperial Oil also argued that its applications "neither extend the footprint of operations nor alter the nature or scale of operations," while SSI argues that it does constitute development under the act. 

"It clearly is," wrote SSI chairperson Charles McNeely in an Oct. 23 filing, citing part of the act that says development includes extensions, and pointing to a time when Imperial Oil itself referred to one of the applications as an extension. 

SSI has argued substantial changes to the environmental conditions around the Mackenzie River basin – like the record-low water levels – could increase the risk of Imperial Oil's operations causing harm and that that's worth examining. 

SSI also argued the review board had no jurisdiction to reconsider a decision it's already made, and asked it to dismiss Imperial Oil's request that it overturn it. 

SSI also took issue with Imperial Oil's reliance on federal law to make its point, saying that the Sahtu land claim — which it said gives SSI broader powers to request environmental assessments — should take precedence. 

'Uncertainty and risk'

When the environmental assessment first began, Imperial Oil asked the review board to stop it, saying it would subject the facility to "significant immediate-term uncertainty and risk." 

That's because, it said, the assessment could delay regulatory decisions coming from the water board and the Canada Energy Regulator that it needs to keep operating in 2025 and risks forcing a shut in – a halt in production – in the new year. 

That risk has been at least partially resolved: the CER has since granted Imperial Oil an interim extension, allowing it to operate while the environmental processes unfold. The company initially told CBC News that would allow it to avoid that winter shut in. 

Imperial Oil has since asked the Sahtu Land and Water Board or a similar extension of its water licence. The board responded last week, saying, ultimately, that it would be waiting for the review board to make its decision about the environmental assessment. 

Four Indigenous governments have also backed the Sahtu Secretariat's right to refer Imperial Oil to environmental assessment. The Town of Norman Wells and the Northwest Territories government supported Imperial Oil's application to stop the assessment, while the federal government has said it wouldn't be giving an opinion.