Fort Liard gas wells could move to next steps in cleanup

Work to abandon or reclaim former gas wells near Fort Liard may begin this summer, the company overseeing the work has told regulators.

Obsidian Energy applied for permission to carry out work at two well sites in an April 22 letter to the Mackenzie Valley Land and Water Board. One site is northwest of Fort Liard, the other southeast.

Obsidian, which owns the well sites, changed its name from Penn West in 2017. Penn West had previously decided neither of the sites was economically viable.

Obsidian’s environmental coordinator, Craig Langford, was not available for comment.

Scott Mackay, director of lands and resources at the Acho Dene Koe First Nation [ADK], said there had been little communication with Obsidian to date.

“Obsidian has been a non-existent player up until now and to this point, they’ve minimally engaged ADK [with] one round of letters and phone calls in February 2019,” Mackay said. “ADK is concerned about a repeat of the Pointed Mountain situation.”

In June 2019, Cabin Radio reported chloride levels around a holding pond for contaminated water at Pointed Mountain – a former gas field near Fort Liard – were above Canadian guidelines and “causing significant adverse environmental effects.”

“Based on the economics and the declining industry, we expect to see more of this type of [abandonment and reclamation] activity,” said Mackay. “And generally speaking, because it’s a declining industry, we’re concerned about fast, loose, opportunistic approaches … where ADK is going to be sidestepped and left out of the equation.”

Mackay said the First Nation wants to have a say in what activities occur on its territory.

“That means environmental oversight and support for involvement in the regulatory process, and a fair share of benefits from any industrial activity that happens in the territory,” he said.

“We’re not against development. We just want to see sustainable development, and for development to leave a positive legacy for our community. And of course, for ADK’s rights and interest to be upheld.”

Shelagh Montgomery, executive director of the land and water board, said Obsidian’s application is undergoing “internal review for completeness.”

Montgomery said: “For land use permit applications, the legislation sets out a 42-day limit by which the board needs to make a decision, from the time an application is deemed complete.”

Janpeter Lennie-Misgeld is a senior advisor at the Office of the Regulator of Oil and Gas Operations, known as Orogo, which is the industry regulator for most of the NWT except federal areas and the Inuvialuit Settlement Region.

Lennie-Misgeld said a number of requirements must be met before Obsidian can be authorized to begin work, like the submission of safety and environment protection plans.

Obsidian originally applied for a permit in May 2019, but Montgomery said her board deemed that application incomplete. Only in April this year did Obsidian follow up, she said.

How many NWT wells are like this?

In April, the federal government earmarked $1.7 billion to help clean up orphaned and abandoned oil and gas wells in Alberta, Saskatchewan, and BC. The money was a means of funding jobs during the Covid-19 pandemic. 

Orphaned wells are sites where the parent company leaves the well as-is. That means no capping – or formal abandoning – of the well, usually done with a cement plug, has been performed to permanently seal it off before reclamation can begin.

Mackay said the Acho Dene Koe First Nation would like to see the NWT government pursue some of that federal funding for orphan well clean-up.

“ADK has got a memorandum of understanding with the GNWT to meet and resolve these types of issues like orphan well clean-up,” he said. “We hope to speak to the premier, through the folks who are going to be at that table, about petitioning Canada for some of that orphan well funding.”

Lennie-Misgeld said just under 600 abandoned oil and gas wells, drilled between 1920 and 2012, fall into Orogo’s jurisdiction.

Since the regulator began its operations in 2014, there have been 24 safely abandoned wells. A further 87 wells are suspended, meaning they haven’t produced for a while and are safely secured but could feasibly enter production again. Of those, 75 are compliant with Orogo’s guidelines and 12 need more work before April 1, 2021.

The Canada Energy Regulator, not Orogo, covers some parts of the NWT like the Norman Wells area and Inuvialuit lands. Those areas have another 640 wells, said Bharat Dixit, the Canada Energy Regulator’s technical leader of exploration and production.

“In the Inuvialuit Settlement Region, there would be … 250 abandoned wells,” Dixit said. “There are [approximately] 12 wells that are suspended, that have been inspected as recently as 2019. One well is an active producing well.”

Dixit said Norman Wells remains the only producing field in the territory.

“In the Norman Wells proven area there are approximately 380 wells, of which about 175 are producing wells,” he said. “An equal number or slightly less are injector wells, in which water is injected back into the formation to keep the volumes stable.”

Reclaiming the land

Along with its abandonment work on two wells, Obsidian’s permit application also lists reclamation work like repairing erosion, slope stabilization, selective seeding, and demobilizing equipment.

Mackay said the First Nation is waiting to hear whether a new benefit plan was submitted for the work Obsidian expects to do in its territory.

“A new benefit plan under the Oil and Gas Operations Act is normally required for work such as that proposed by Obsidian,” he said. 

“ADK is in the process of trying to confirm whether Obsidian submitted a new benefit plan [to the NWT’s Department of Industry, Tourism, and Investment], applied to have a benefit plan waived for the project, or has not yet submitted a plan. 

“To my knowledge, Obsidian has not engaged ADK about any aspects of a benefit plan to date, but this would be a very important piece to engage us about.”

Where work on the land is concerned, Mackay stressed that people who live and use that land must be consulted and involved.

“ADK would really like to be involved in that work and to have oversight of that work when it’s happening,,” he said.

“[ADK] bears the impacts, because of their close relationship to the land.”

If work begins this summer, it would be expected to continue through to 2023 under Obsidian’s current plans.