Imperial Oil issues another Norman Wells shutdown warning

Imperial Oil has reiterated that it could close down its Norman Wells facility in the coming months, this time while asking a regulator to issue an extension.

A letter sent by the company this week also revealed more about how Imperial assesses its economic impact in the Sahtu region.

With two environmental assessments related to the company’s Norman Wells presence now going ahead, Imperial is asking one of three regulators involved – the Sahtu Land and Water Board – to provide some form of extension to its water licence.

Water licences are basic components of most industrial operations’ permitting in the NWT, governing how they use water.

Imperial was midway through the process of renewing its water licence when the Sahtu Secretariat referred its Norman Wells site to environmental assessment, which normally has the effect of pausing other proceedings like the water licence renewal.

However, an environmental assessment is likely to take months – at least – and Imperial’s existing water licence will expire in March 2025.

Another of the regulators involved, the Canada Energy Regulator, has given a separate permit held by Imperial an interim extension to let the facility keep running while the environmental assessment takes place. Imperial now wants the same kind of extension for its water licence from the Sahtu Land and Water Board.

Without that, the company said in a letter this week, “Imperial will be forced to shut-in the NWO” – the Norman Wells facility – “by March 4, 2025 when the licence expires, with shut-in activities such as de-inventory of tanks beginning no later than
February 1, 2025 to ensure Imperial completes necessary activities prior to expiry.”

Even that, Imperial suggested, would mean some activities taking place without any of the permissions normally required.

“No approvals are currently in place for shut-in or site closure at the NWO, nor has community engagement been conducted for a 2025 shut-in of the operation. The process for issuing these approvals may take months or years,” Imperial wrote.

“There is likely to be a significant regulatory approval gap during which Imperial would be without the approvals needed to safely and lawfully maintain the NWO. This gap will have immediate and serious adverse effects on the local economy and increased risk to the environment and to workers’ health and safety.”

Imperial sets out its value

In late November, the Sahtu Land and Water Board had told Imperial the relevant federal legislation gave it no authority to grant interim licences of the kind provided by the Canada Energy Regulator, which operates under different rules.

It’s possible that the land and water board’s interpretation of the options available may yet change. Its November letter was written before a third regulator, the Mackenzie Valley Review Board, rejected Imperial’s request to have the environmental assessment halted on separate grounds.

Imperial argues the land and water board can and should issue an interim extension.

The company argues sections of federal law allowing action in an emergency could be used to ensure it has the right permits to keep operating at Norman Wells while the environmental assessment goes ahead.

Describing a scenario that it viewed as an emergency in the making, Imperial said shutting in – in other words, closing down – the facility by March 2025 could “cause energy shortages in the Sahtu region as well as immediate and severe economic impacts, while also risking significant damage to property, environmental pollution, and posing additional risks to workers’ safety.”

This week’s letter included a range of Imperial estimates for the economic effect it has on Norman Wells and the Sahtu.

In setting out why a winter shut-in should be avoided, the company said its operations “inject approximately $2.25 million per month into Norman Wells and the Northwest Territories’ economy.”

About 80 employees and contractors work at the Norman Wells facility each day, Imperial said, a figure that the company estimated a shut-in would reduce to 20.

Imperial said it provides property taxes of about $6 million to the Town of Norman Wells annually, which the company said “constitutes approximately 70 percent of the town’s budget.”

Imperial, of course, benefits too from its Sahtu site. In the third quarter of 2024 alone, the company reported a profit of $1.24 billion from its nationwide operations, a figure that represents about half of the money the whole NWT government has to spend in a given year.

The company said a shut-in would also affect local power generation and require more diesel, meaning extra strain on the winter road and driving local fuel prices even higher.

The Sahtu Secretariat referred the Norman Wells facility for environmental assessment partly on the grounds that the economic, social, political and environmental circumstances in which it operates had changed since it was last permitted.

The body, which represents Sahtu Dene and Métis, also questioned the value of maintaining an operating oil field that is expected to close down in the next five to 10 years even if business continues as usual.