A little-known government agency has cleared the way for a geothermal energy company to do exploratory work prior to drilling on private property in the Lakelse Lake area.
The order issued by the B.C. Surface Rights Board ends what had been a disagreement between Mount Layton Hotsprings Resort and Kitselas Geothermal, a partnership of the Kitsleas First Nation and Calgary-based Borealis GeoPower.
Kitselas Geothermal has been exploring the Lakelse Lake area for years to nail down the potential to find sufficient quantities of super-heated water that can be pumped to the surface and used for heating and other industrial and domestic purposes.
The company is ready to start drilling and received the right in February from the provincial government to investigate geothermal resources and now needs a well authorization permit from a provincial agency called the BC Energy Regulator.
That brought Kitsleas Geothermal to the surface rights board seeking entry to the hotsprings property which has the potential to be the centre of any subsequent commercial activity.
That Kitselas Geothermal could enter private property was never in doubt, explained Borealis GeoPower official Tim Thompson to a meeting of Lakelse Lake landowners in March to explain the project.
“You are surface rights holders and I am a sub-surface rights holder,” he said.
That was affirmed by mediator Cheryl Vickers on behalf of the surface rights board.
“I am satisfied … that Kitselas Geothermal Inc. requires access to the [hotsprings] lands in order to exercise the rights granted to it in the permit,” she wrote in a June 2 decision.
Vicker also noted that this was the surface rights board’s first application seeking an order providing access to private lands for geothermal resource development.
As such she found a challenge in deciding how much compensation Kitselas Geothermal should pay to the hotsprings, saying the two parties had very different ideas.
Compensation is provided for through provincial legislation applying to natural gas and petroleum development but while those impacts are known, that can’t be said for geothermal activity, Vickers said.
“The amount of loss to the landowner or the extent of any damage to the land that may arise from entry cannot be estimated in advance,” she wrote.
Vickers did decide that Kitselas Geothermal should pay the hotsprings $5,000 as a partial payment for whatever further compensation may be needed as the project develops.
“It is simply an order for the payment of an amount on account of rent or compensation that may be payable for Kitselas Geothermal’s proposed geothermal project on the [hotsprings] lands,” she wrote.
The surface rights board order provides Kitselas Geothermal with access until Aug. 31, 2023.
Kitselas Geothermal crews can work during daylight hours only except for Sundays and statutory holidays.
In a brief filed with the surface rights board, the company said it would want to establish four well drilling locations.
Anticipated work includes soil assessments, landslide assessments and an archaeological survey.
“The total final impact on site is expected to be negligible,” the company wrote.
While this is the first order of its kind regarding geothermal work on private property, the B.C. Surface Rights Board is active regarding oil and gas drilling in northeastern B.C.
Kitselas Geothermal dates back more than a decade when Enbridge and the Kitselas First Nation began assessing the geothermal potential around Lakelse Lake.
Enbridge has since bowed out but Kitselas Geothermal has been the beneficiary of provincial government grants and, in 2022, Shell signed up as a joint development partner.