Link to Decision Summarized

Oil/Gas – Amendment Application

Application

On March 8, 2022, the CER approved the development plan for the proposed Inuvialuit Energy Security Project (the “IESP”). Subsequently, Inuvialuit Energy Security Project Ltd. (“IESPL”) provided, by a letter, an engineering update on the development plan. The CER advised that it would treat the letter as a request to amend the development plan (“Amendment Application”).

Decision

The CER approved the Amendment Application without imposing any conditions or other requirements. The CER, however, noted that the approval set out in its letter decision does not take effect unless and until IESPL obtains the necessary consent of the Northwest Territories’ Commissioner in Executive Council in accordance with section 14(5)(a) of the Oil and Gas Operations Act (“OGOA”).

Pertinent Issues

IESPL suggested that the proposed changes did not necessitate a formal amendment under the OGOA since the changes amounted to an engineering update to the IESP. The CER did not accept this position and found that the amendment application includes proposed changes to specific sections of the approved development plan, which trigger paragraph 14(5)(a) of the OGOA. Moreover, under this section, any amendment to Part 1 of the development plan must be made with the consent of the Northwest Territories’ Commissioner in Executive Council. Subject to the requisite consent, the CER approved the amendments making the following findings:

1. The CER was satisfied with IESPL’s engagement activities to date and its commitment to continue those activities throughout the project lifecycle;
2. The CER was of the view that, except for a potential for increased air emissions due to the addition of fired heaters, the proposed changes to the development plan do not result in any negative impacts or changes to the valued components assessed for the IESP. Based on IESPL’s commitments to conduct further air quality modelling and to meet territorial and federal ambient air quality guidelines, the CER found that the proposed changes to the development plan are acceptable and are likely to result in a net reduction in overall environmental impacts;
3. IESPL provided sufficient information about project costs to enable the CER to understand the implications of the proposed changes on the project’s economics. The CER remained of the view that the IESP is likely to be economically feasible with the changes proposed in the Amendment Application, despite significant cost increases due to inflation. The CER was also satisfied that the IESP, with the proposed changes, can still provide the corollary benefits recognized in the development plan approval, including local employment opportunities and improved energy security for the region; and
4. IESPL proposed appropriate design changes to safely accommodate the proposed increase to the maximum daily flow rate at the wellhead. The CER accepted IESPL’s assertion that the resource and recoverable raw gas estimates remain unchanged by the proposed changes.