Photo by Whitehorse Star
Photo by Whitehorse Star
The Department of Energy, Mines and Resources is being drilled on its rejection of a Yukon Environmental and Socio-economic Assessment Board (YESAB) recommendation related to its abandonment of a well at the Kotaneelee gas field in southeast Yukon.
In the legislature yesterday, NDP Leader Liz Hanson questioned why the government elected to abandon the well to a lower standard than the oil and gas industry practices.
When Texas-based owner EFLO become insolvent in 2015, the four wells it purchased in 2012 at the Kotaneelee site – close to the B.C. and Northwest Territories borders – were in a state of suspension.
Another Texan company, Apache Corp., assumed responsibility for three of the wells it had an ownership stake in, and the fourth was taken over by the Yukon government.
All wells were decided to be fully abandoned and remediated, and both Apache and the Yukon government submitted a YESAB proposal for their plans to do so.
YESAB released its recommendations in July. It encouraged the Yukon government to implement abandonment mechanisms that satisfy more stringent industry, rather than government, standards for the process.
In August, the government rejected the YESAB recommendation, which called for monitoring and venting devices designed to mitigate potential complications.
“What can happen with these wells is gas can continue building up pressure in the well, and if you’ve got no way to relieve the pressure or monitor the pressure, you don’t know this is happening until it either starts to leak or basically blows apart,” Sebastian Jones, an energy analyst with the Yukon Conservation Society, said this morning.
The government is already on the hook for $1.8 million to remediate the well.
Jones said he’s puzzled by its refusal to pay what would be a “pretty small” price for the industry-backed mechanisms that could prevent a far costlier abandonment in the event of a well leak.
According to Jesse Devost, a spokesperson for Energy, Mines and Resources, the government made the decision based on legislative requirements mandated by the Yukon Oil and Gas Act.
“We have to match the standard as listed in our regulations. It’s a stipulation of it,” he said.
However, he added the department is now reviewing these regulations to see if updates are required.
This explanation doesn’t sit right with Jones.
“Governments do things which go beyond the letter of the law all the time because of best management practices,” he said.
Devost confirmed that work on the government’s well abandonment has not started.
Work will begin in the spring, and the entire abandonment process should be completed by summer 2018.
He also confirmed that the budget for the project hasn’t changed as of yet.
Energy, Mines and Resources Minister Ranj Pillai told the legislature during the spring sitting the total cost to abandon the well will be approximately $2.4 million, of which $625,000 is covered by the security EFLO had posted.
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