Imperial Oil asks regulator to halt environmental assessment

Imperial Oil has asked an NWT regulator to shut down an environmental assessment of its Norman Wells facility that was triggered by the Sahtu Secretariat last month.

If that fails, Imperial says it may take the matter to court.

The company says the assessment will delay its ability to receive the permissions it needs to keep operating in Norman Wells beyond the end of 2024.

If the assessment goes ahead, Imperial says that will result in the company closing down the site in the next few months. It says it would have no regulatory approval to remain open.

“Shutting in” the site in winter will mean increased risk to workers and the environment, Imperial argued in a letter to the Mackenzie Valley Review Board dated Wednesday.

Imperial is also challenging the legality of an environmental assessment of its entire operation in Norman Wells. (A second environmental assessment, also launched last month, looks at the company’s plan to replace pipelines at the site. That assessment is not mentioned in Wednesday’s letter.)

The company argues that the Supreme Court of Canada has ruled environmental assessments are designed to study proposed developments, not existing operations.

While the Sahtu Secretariat says there have been “many changes in the broad environment” at Imperial’s Norman Wells site, Imperial says it has “operated without material alterations for approximately 40 years.”

The company says its latest applications to regulators, filed in November 2023 and June 2024, were to extend existing permissions “to maintain the economic and environmental status quo for an additional five to 10 years” rather than make significant changes.

Imperial also says the federal law governing environmental assessments in the NWT includes provisions that rule out an assessment of its entire operation, and says it was given no chance to make any submissions before an assessment was formally launched.

“Given the circumstances, Imperial requests a ruling on an urgent basis with a decision by October 23, 2024,” the company wrote on Wednesday.

“If required,” the letter continued, “Imperial may seek judicial review on the grounds established in this letter. Imperial and the court will require time to render an expedited decision prior to the date shut-in must commence.”

‘Noticeable environmental changes’

The Sahtu Secretariat, which represents the region’s Sahtu Dene and Métis, has the legal power to refer a project to environmental assessment of its own accord. (Imperial is arguing that the regulator should have subsequently rejected the referral.)

Environmental assessments are a central pillar of the way the NWT manages the effect of industrial development on the surrounding environment and also on nearby communities.

Almost any major project goes through an environmental assessment at its start – for example, the Mackenzie Valley Highway is going through one at the moment, even though no funding exists to build it. Since they are designed to be thorough, assessments can take years to complete.

In referring the entire Norman Wells facility to environmental assessment, the Sahtu Secretariat questioned the need for the century-old oil field to continue operating.

The group wrote that there had been “noticeable environmental changes, changes to geopolitical concerns affecting development, and increasing recognition of Indigenous rights” that, in its view, warranted fresh scrutiny of Imperial’s local operations.

“These changes not only impact the operation of the Norman Wells oil field, they call into question the very need for that operation,” the letter continued.

“Today, in an area of increasing environmental sensitivity, does it make sense to accept any degree of risk from an ageing oil field that in 2021 provided less than one percent of Canada’s daily conventional light crude production?”

The Sahtu Secretariat went on to challenge whether Imperial’s activities were bringing sufficient benefits to the region, adding that it “believes a full environmental assessment process is required to ensure that Sahtu residents can be meaningfully involved in decisions relating to development on, and affecting, their lands and waters.”

Broader Sahtu concerns

The secretariat’s request and Imperial’s response are taking place against a backdrop of a mounting economic crisis in the Sahtu.

Imperial’s oil field is the financial heartbeat of the community of Norman Wells. However, even if the facility remains operational in the short term, there is broader recognition that the field has at most another 10 years of life left.

At that point, what drives forward the Sahtu’s economy is not clear. Some critics of Imperial – which also operates the notorious Kearl facility in northern Alberta – say the short-term gain of keeping the facility open isn’t worth any further long-term environmental risk.

Meanwhile, low water levels caused the summer barge resupply season to fail and a proposed all-season road to the Sahtu is, in all likelihood, at least a decade away if not more. The NWT government on Wednesday released a $1.8-million support package for businesses in the Sahtu and Beaufort Delta hit by higher air freight costs because the barges, a cheaper option, could not run.

Gas prices spiked in Norman Wells last week and home heating fuel is expected to similarly become more costly. Imperial, which supplies fuel to the community, has said having to bring the fuel in by air – because of the barge problem – is behind that increase.

Norman Wells’ mayor has said he will soon struggle to afford fuel if prices remain as high as they are.

Regulators in the spotlight

An uncomfortable few weeks for the NWT’s regulatory authorities continued with Imperial’s claim that the review board has not properly applied the relevant legislation.

On Wednesday, NNSL reported that various territorial regulators had “scrambled to release financial documents” after the newspaper group began asking why their financial reports had not been made public, as legislation requires.

NNSL quoted one regulatory boss as saying “no one has ever cared about this before” as financial statements began appearing on regulatory websites after a reporter began making inquiries. (After this article was first published, some regulatory board staff disputed the accuracy of that reporting.)

Meanwhile, a letter from the owners of the Ekati diamond mine to the NWT’s premier, bluntly demanding extra support for the sector in the face of a downturn in diamond prices, turned out to have appeared on a regulatory website by accident.

Initially, Ekati owner Burgundy thought the letter had been leaked to reporters. In fact, it had been published by regulators alongside other documents related to a public hearing that had to be abandoned at short notice when Burgundy withdrew an application.

In that instance, the regulator says it wasn’t at fault and had been sent the letter by Burgundy.

“Anything the board receives is assumed to be part of the public record,” Wek’eezhii Land and Water Board executive director Ryan Fequet told Cabin Radio.

“There was no indication that they were requesting to keep it confidential or private.”

Despite that, the document has now been deleted from the registry.

Kim Truter, Burgundy’s managing director, said in an email that the letter’s appearance in the public domain was “all a bit unfortunate.”