February 28th, 2024

Energy regulator reviewing CP Rail appeal over gas well responsibility

By COLLIN GALLANT on March 16, 2022.

A new well-head sits atop a long abandoned gas well in a parking lot next to S. Railway Street in Medicine Hat on Sept. 3, 2021. Work last fall to address leaking methane was performed under contract to Canadian Pacific Railway, but that company is disputing whether it is the party ultimately responsible.--NEWS FILE PHOTO


Alberta’s Energy Regulator is now considering an appeal by Canadian Pacific Railway, which argues it is not responsible for the cost to rework a leaking historic gas well in the middle of Medicine Hat.

The work, which featured a full-sized drilling rig parked in a commercial strip next to S. Railway Street last fall, was completed by Savannah Drilling under contract by the railway.

CP Rail was named as the entity responsible for the “Medicine Hat 18” well in a December 2020 decision by the AER to issue an environmental protection order, though the railroad appealed the decision last spring.

Submissions to the AER state the company’s position is the well, drilled in 1908, was transferred to related company Canadian Pacific Oil and Gas, some 50 years before it was rediscovered by city road crews realigning S. Railway Street in the late 1980s.

That other company was spun out of the railway corporation umbrella in the late 1990s, and became Encana, then Ovintiv and Cenovus Energy.

Those companies, or the City of Medicine Hat, which is a stated licence holder, should be considered the owner, the submission concludes.

Those three entities are registered parties to proceedings that opened Monday.

The city’s position is it was unknowingly made licence holder when utility officials reported the well’s existence to regulators as well as Canadian Pacific Oil and Gas and CP Rail officials 30 years ago.

At the time, states the city’s submission, it began monitoring the well in the interest of public safety, then in 2014 began investigating the ownership when the well was flagged at leaky elevated methane levels.

Cenovus sold its wells in the region en masse to Heritage Energy, but apparently not the specific well as, the city argues, it was mis-assigned to the city’s energy division.

A hearing on the subject scheduled was for earlier this year but was postponed. AER announced March 14 as the new date.

There is no immediate timetable for a decision.

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