The oil well that government forgot

KJIPUKTUK (Halifax) – To say that cleaning up an abandoned oil well site in the tiny community of Cogmagun, Hants County, is proving to be a real challenge is an understatement. 

 

In 2014 local resident Kimm Kent raised the alarm about the well site. The well was drilled in 2002, and abandoned shortly after.

Left behind were a primitive holding tank and a tailing pond with a now mostly decayed liner. The sludge at the bottom could still have significant concentrations of hazardous substances.

Through a convoluted series of acquisitions the well became the responsibility of Triangle Petroleum, the same company that fracked in the Kennetcook area. And the same company that left behind the two infamous ‘temporary’ fracking wastewater storage ponds that caused the government such headaches.

In a 2014 story about the cleanup efforts both the provincial Department of Energy and Triangle Petroleum told the Halifax Media Co-op that the Cogmagun site was not forgotten.

But in 2016 it definitely was forgotten again.  

Having recently established that the Department of Transportation and Infrastructure Renewal (TIR) has administrative responsibility for managing the cleanup and remediation of well sites left by Triangle Petroleum, we asked specifically about the Cogmagun oil well site. TIR spokesperson Brian Taylor replied that the Cogmagun site cleanup is “not part of the scope of the project.”

So the Nova Scotia Advocate returned to the Energy Department Petroleum Division for comment on how the 13 year old Cogmagun oil well site was to be cleaned up. After a few days of internal deliberations it came back from TIR that the Cogmagun well site is part of the Triangle sites clean up after all and that “the details of that remained to be worked out”.

There is a further complication.

In 2016 Triangle USA filed for protection from creditors. But the Nova Scotia operation – the six well sites due for cleanup and remediation- resided with Elmworth Energy, an associated company not affected by the Triangle USA bankruptcy. 

A reliable source told the Nova Scotia Advocate that Elmworth had in June provided sufficient funds to the provincial government to cover the cleanup costs for the six fracking wells Triangle abandoned. That agreement was negotiated by the Petroleum Division of the Energy Department.

While declining to comment directly on the terms of the settlement with Elmworth Energy because of a confidentiality agreement, the Energy Department spokesperson did confirm that the province received a fixed amount to pay for the cleanup.

Energy Department spokesperson Marla MacInnis also confirmed that the money did not include the cost for the cleanup of the once again forgotten Cogmagun oil well site.

By negotiating a fixed amount to cover the cleanup costs of the six fracking wells left behind by Triangle, government will be stuck with potential cost overruns. And now it has to absorb the added costs of the Cogmagun site cleanup as well.

It’s a very good deal for the Triangle owners of Elmworth Energy. They see their open-ended cleanup liability transformed into a fixed cost, freeing up assets that before the new arrangement were effectively frozen.

Whether any of this is a good deal for the province remains to be seen.