A full-sized drilling rig sits on S. Railway Street in Medicine Hat on Oct. 22, 2021 as crews work to rework then permanently close in a 1910-era gas well, whose ownership is in dispute.--News File Photo
cgallant@medicinehatnews.com@CollinGallant
A private settlement has apparently been reached on the issue of who is responsible to properly abandon one of the oldest natural gas wells in Alberta, though details are not yet known.
“Medicine Hat 18” was drilled in 1908 to supply gas to the Canadian Pacific roundhouse in downtown Medicine Hat, but was closed in and only rediscovered by city crews in the mid-1980s when they realigned a road.
By that time, the oil and gas assets of the railway had been spun off decades earlier, CP Rail officials told a March hearing by Alberta Energy Regulator, which included two successor petroleum companies, Ovintiv and Cenovus, along with the City of Medicine Hat.
The railway was appealing an AER order from December 2020 that made it liable for the cost of reworking the well and permanently closing it last fall when it brought in a full-sized drilling rig, and S. Railway Street in the city was closed for several months.
This week the AER announced Canadian Pacific had requested to withdraw that appeal, adding that all parties had requested a pause on a decision so four-way negotiations could continue.
“On June 27, CPRC (Canadian Pacific Railway Corp.) notified the AER that it entered a settlement agreement with the City of Medicine Hat, Cenovus Energy Ltd. and Ovintiv Canada ULC, and as a result, CPRC withdrew its regulatory appeal,” the notice read. “Accordingly, the AER has discontinued the regulatory appeal,”
City of Medicine Hat officials stated they would reserve comment until next week.
The city had brought the matter to the attention of the AER initially, arguing its own petroleum division had been wrongly assigned the well after it reported its existence to regulators when S. Railway Street was dug up.
The well was one of several wells outlined in a 2014 draft report on urban and orphan wells that were leaking methane. At that time the city’s petroleum and natural gas department stated it was one of several on which it assumed a caretaker role as ownership was not clear.
Officials stated there was no risk to the public of combustion or ill-health effects.
