Imperial Oil posts $181M security for Norman Wells, N.W.T., oilfield cleanup

Money is now in place for the eventual cleanup of Imperial Oil's decades-spanning Norman Wells oil field.

Mayor glad to see security in place given the field's uncertain future in light of pipeline shutdown

Imperial Oil was ordered by Northern regulators to post a security for the cleanup of the Norman Wells oil field in March 2015. That security was finally in place as of mid-November.

Money is now in place for the eventual cleanup of Imperial Oil's decades-spanning Norman Wells oil field. 

The Enbridge pipeline, also known as Line 21, carries oil from Norman Wells to Zama, Alta., but is currently shut down. (courtesy National Energy Board )

The company gave the federal department of Indigenous and Northern Affairs a security of $180.9 million, in the form of an irrevocable letter of credit, on Nov. 18, according to a letter the department sent to the Sahtu Land and Water Board in late November.

Nathan Watson, the mayor of Norman Wells, says having that security in place is especially important now given that the pipeline that carries oil south from Norman Wells remains shut down, with no estimated date for its restart.

In response to the pipeline shutdown, Imperial Oil has reduced oil production at the Norman Wells field to a minimal level. 

"We are now at the point where things can change in the blink of an eye," said Watson. 

"Hence the increased importance of ensuring the security funds are just that — secure."

The land and water board had ordered Imperial Oil to provide the security in March 2015, as part of the renewal of the company's water licence for the decades-spanning operation. The delay in receiving that security was due to discussions about the form of security, the department had previously said. 

Not clear if feds will share in cost  

Imperial Oil says the field has between five to 10 years of production life left. 

The federal government has a one-third interest in the field, but it is not clear if that means the government is responsible for covering one third of the cleanup costs.

CBC News has requested more information from the government. 

About the Author

Guy Quenneville and Charles Hamilton

CBC Saskatoon

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