LLI GOLINE/NORMAN WELLS
A lion's share of the millions of dollars owed on the cleanup deposit for Imperial Oil's oil and gas fields at Norman Wells has yet be paid, according to the Department of Indigenous and Northern Affairs Canada (INAC).

Of the $180 million environmental reclamation security deposit the company was ordered to provide to the federal government by the Sahtu Land and Water Board on March 5, 2015, only a $2 million irrevocable letter of credit has been offered to date.

The security deposit was ordered as part of Imperial Oil's water licence for 2015-2025, INAC spokesperson Valerie Hache said in an e-mail to News/North.

Imperial Oil, meanwhile, announced its intentions Sept. 9 to sell off its Norman Wells assets if it can.

The remaining $178 million is currently being discussed.

"We are seeking to conclude exchanges with Imperial Oil Ltd. over the appropriate form of security," Hache said.

Imperial Oil owns two thirds of operations in Norman Wells while the federal government owns the remaining third.

"Those of us that live and work here and call Norman Wells home aren't all that shocked or surprised," said Mayor Nathan Watson. "We're well aware of the decline."

Watson said the town isn't yet worried about the lack of a security deposit.

Initially there may be a few less jobs

"We have a tremendous amount of faith in Imperial as a corporate citizen," he said. "At this point no, it's not too much of a concern."

Watson said the short term impact would likely be minimal if Imperial Oil sells its share of the Norman Wells operation.

"If somebody buys it right now while it's in production, even though its reduced 80 per cent in the last 30 years, there is still tens of millions dollars worth of business being done down that Enbridge pipeline from here," he said.

"So initially there may be a few less jobs, there would be some changeover in who does what. Initially it wouldn't be that big an impact, I don't think."

Kevin Diebold, a former Norman Wells mayor and member of the Norman Wells Chamber of Commerce, said a sale could be a good for the town.

"I think it would be favourable for the business people there that they can now work with a new company and get back to what we did in the early 1980s, where it was all local or Sahtu businesses that were working for Imperial Oil," he said.

Work now being performed by companies flying workers in from the south, such as electrical work, could be picked up by local companies, Diebold said.

"I think a local company or a local company in the Sahtu could provide that service to whoever takes over, that's just one," he said.

Heavy equipment operation could also be completed using local labour.

"I think that could be handled by the local contractors in the Sahtu quite easily," he said.

Imperial Oil employs 60 workers in Norman Wells but not all of them permanently live in the community, said Lisa Schmidt, spokesperson for the company.

"We have 60 employees that work in day-to-day operations and the vast majority of these live in Norman Wells," she said.

While the effects of a sale might not be felt immediately, Watson said the town has already begun planning for the day the oil fields shut down.

"The town will certainly be changed in a huge way. Whether or not we'd still be tax-based, whether or not we would revert to hamlet status, those are the kinds of long-term things that we're already thinking about," he said. "The town is based on that field and it will still be a regional hub but there will be drastic changes."

But the process of reclamation will also require workers, which will create jobs, Watson said.

"At the point where the field ceases to operate and went into reclamation, there's still years and years of employment and economic development opportunities," he said.

The fields were producing about 11 million barrels per day as of 2015, Schmidt said. While she wouldn't comment on the operation's estimated lifespan, Schmidt pointed out that the company had requested a 10-year water licence from the water board.

"There are a variety of factors that go into the length of the field," she said. "We did apply for a 10-year water licence just recently, so I guess that can give you an indication."

Another concern is how the town will be powered in the future, Watson said.

Now, the Northwest Territories Power Corporation (NTPC) buys power from Imperial Oil and sells it to customers in Norman Wells.

"They have an arrangement with NTCP. We get our power bill in the mail just like everybody else," Watson said.

"The natural gas power generation is backed up by diesel, which would put us back to square one and in the same position as a lot of communities that rely on diesel for power generation."

If Imperial Oil doesn't find a buyer, Schmidt said the company would continue to operate the site.

"What typically would happen is that we would continue to operate the asset for the rest of its economic life," she said.

The vast lion share of millions of dollars owed on the cleanup deposit for Imperial Oil's oil and gas fields at Norman Wells has yet be paid, according to the Department of Indigenous and Northern Affairs Canada (INAC).

Of the $180 million environmental reclamation security deposit the company was ordered to provide to the federal government by the Sahtu Land and Water Board on March 5, 2015, only a $2 million irrevocable letter of credit has been offered to date.

The security deposit was ordered as part of Imperial Oil's water licence for 2015-2025, INAC spokesperson Valerie Hache said in an e-mail to News/North.

Imperial Oil, meanwhile, announced its intentions Sept. 9 to sell off its Norman Wells assets if it can.

The remaining $178 million is currently being discussed.

"We are seeking to conclude exchanges with Imperial Oil Ltd. over the appropriate form of security," Hache said.

Imperial Oil owns two thirds of operations in Norman Wells while the federal government owns the remaining third.

"Those of us that live and work here and call Norman Wells home aren't all that shocked or surprised," said Mayor Nathan Watson. "We're well aware of the decline."

Watson said the town isn't yet worried about the lack of a security deposit.

"We have a tremendous amount of faith in Imperial as a corporate citizen," he said. "At this point no, it's not too much of a concern."

Watson said the short term impact would likely be minimal if Imperial Oil sells its share of the Norman Wells operation.

"If somebody buys it right now while it's in production, even though its reduced 80 per cent in the last 30 years, there is still tens of millions dollars worth of business being done down that Enbridge pipeline from here," he said.

"So initially there may be a few less jobs, there would be some changeover in who does what. Initially it wouldn't be that big an impact, I don't think."

Kevin Diebold, a former Norman Wells mayor and member of the Norman Wells Chamber of Commerce, said a sale could be a good for the town.

"I think it would be favourable for the business people there that they can now work with a new company and get back to what we did in the early 1980s, where it was all local or Sahtu businesses that were working for Imperial Oil," he said.

Work now being performed by companies flying workers in from the south, such as electrical work, could be picked up by local companies, Diebold said.

"I think a local company or a local company in the Sahtu could provide that service to whoever takes over, that's just one," he said.

Heavy equipment operation could also be completed using local labour.

"I think that could be handled by the local contractors in the Sahtu quite easily," he said.

Imperial Oil employs 60 workers in Norman Wells but not all of them permanently live in the community, said Lisa Schmidt, spokesperson for the company.

"We have 60 employees that work in day-to-day operations and the vast majority of these live in Norman Wells," she said.

While the effects of a sale might not be felt immediately, Watson said the town has already begun planning for the day the oil fields shut down.

"The town will certainly be changed in a huge way. Whether or not we'd still be tax-based, whether or not we would revert to hamlet status, those are the kinds of long-term things that we're already thinking about," he said. "The town is based on that field and it will still be a regional hub but there will be drastic changes."

But the process of reclamation will also require workers, which will create jobs, Watson said.

"At the point where the field ceases to operate and went into reclamation, there's still years and years of employment and economic development opportunities," he said.

The fields were producing about 11 million barrels per day as of 2015, Schmidt said. While she wouldn't comment on the operation's estimated lifespan, Schmidt pointed out that the company had requested a 10-year water licence from the water board.

"There are a variety of factors that go into the length of the field," she said. "We did apply for a 10-year water licence just recently, so I guess that can give you an indication."

Another concern is how the town will be powered in the future, Watson said.

Now, the Northwest Territories Power Corporation (NTPC) buys power from Imperial Oil and sells it to customers in Norman Wells.

"They have an arrangement with NTCP. We get our power bill in the mail just like everybody else," Watson said.

"The natural gas power generation is backed up by diesel, which would put us back to square one and in the same position as a lot of communities that rely on diesel for power generation."

If Imperial Oil doesn't find a buyer, Schmidt said the company would continue to operate the site.

"What typically would happen is that we would continue to operate the asset for the rest of its economic life," she said.

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