A plan to abandon four wells at the Kotaneelee plant near Watson Lake has been approved by YESAB. (Submitted photo/Yukon News)

YESAB approves Kotaneelee cleanup

Capping YG-owned well will cost $2.4 million

The Yukon Environmental and Socio-Economic Assessment Board has given the go-ahead to a proposed project by Apache Canada and the Yukon government’s oil and gas resources branch to abandon four wells at the now-defunct Kotaneelee natural gas fields.

Abandonment is the process of shutting down a well to meet environmental and remediation standards, with the intention that it never be used again. The proposed project includes the decommissioning and removing facilities and infrastrcture and capping wells.

YESAB’s recommendations, issued June 28, come with caveats. One is specific to well L-38, which is the sole responsibility of the Yukon government. The report recommends the casing of L-38 be “capped with a steel plate that is installed in a manner to prevent the potential for pressure build-up.”

The specific recommendation for L-38 is likely to bring the abandonment procedure up to par with the other three Apache-owned wells, said Sebastian Jones, the energy analyst for the Yukon Conservation Society.

The Yukon government had not proposed that specific form of capping, while Apache had, said Jones.

The recommendation would mean the addition of a vent, which prevents any residual gas from being trapped inside the casing and exploding, said Jones.

“This applies to the imperpertuity of the abandonment of these wells,” Jones said. “They abandon them with the expectation that they will leak and need long-term monitoring…. We’re always going to have to keep an eye on them.”

The cost of abandoning L-38 alone is estimated at $2.4 million. EFLO Energy, the former owner of Kotaneelee, left a deposit of $625,000. Taxpayers are on the hook for the remaining $1.8 million. It’s not clear what the rest of the cleanup will cost.

Cleanup of the August 2015 spill is still underway and is the responsibility of Apache. However, the Houston-based company sold its $1 billion in Canadian assets in a move to exit the Canadian market July 6. The company divided its Canadian holdings between Paramount Resources, Cardinal Energy and an undisclosed privately-owned company. It is unknown which company will be responsible for the impending Kotaneelee cleanup.

This additional recommendation for L-38 will, “probably increase (the) cost, but I don’t think it’s a big thing,” said Jones.

YESAB also recommended that the pipelines be cut off below ground, be pressure tested to ensure there are no leaks in the line, and that a water monitoring program be put in place. It also calls for a detailed plan to reduce human-bear conflicts.

YESAB made these recommendations to the project because it determined “the project is likely to have an adverse environmental and socio-economic effect in or outside Yukon that can be mitigated,” it said in its report.

The Kotaneelee plant, located 270 kilometres east of Watson Lake, operated on and off between 1977 and 2012. EFLO Energy was found to be insolvent when Environment Yukon ordered it to pay for the clean up of a spill of wastewater and lubricants originating from one of the pump houses at the remote site.

Apache Ltd was the major shareholder in three of the wells, but, as EFLO was the sole owner of the final well, L-38, it became the property and responsibility of the Yukon government.

The Yukon Development Assessment Board has until August 4 to make a final decision on the project.

If the work is approved, remediation and abandonment could begin as early April 2018.

With files from CP

Contact Lori Garrison at lori.garrison@yukon-news.com

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