The Vancouver Sun reports that, "The Peace River region is suffering the worst drought in 20 years and dwindling water supplies have forced officials in Dawson Creek (located about 700 kilometres northeast of Vancouver) to impose water restrictions on nearly 13,000 residents. ...Effective (August 18), all residents will be forbidden to use water outside their homes, including watering their lawns and washing their cars and they will be asked to conserve potable water."

OIL AND GAS COMPANIES HAVE WATER ACCESS RESTRICTED"(Dawson Creek mayor Mike) Bernier said the oil and gas companies in the area use 25 per cent of the city’s water supply and will also be forbidden to use of potable water for industrial use.""The B.C. Oil and Gas Commission issued a directive on Aug. 11 to all industry clients in the Peace River Region to suspend drawing water from four major rivers in the region. The directive, posted on its website, says the area has suffered a 'severe summer drought' and the suspension will be lifted when the drought ends." ("The Oil and Gas Commission grants short-term water withdrawal permits. Longer-term water-use activities require authorization from the B.C. environment ministry." An article in the Tyee.ca explains, "While the Ministry of Environment oversees the majority of water extractions in B.C., the province's Water Act and the Petroleum and Natural Gas Act allow the OGC to to approve some water access for surface and subsurface sources.")The Montreal Gazette reports that, "Alex Ferguson, the B.C. Oil and Gas commissioner, said the suspension covers about 20 operators in the four watersheds. Most are not using much water right now." An earlier Vancouver Sun article reported that, "Natural gas explorers use water during drilling operations, and water is of particular value for deep underground formations such as shale, which are fractured using high-pressure injections of drilling fluids to release gas. The industry has access to hundreds of public and private water sites across the province."

LOW WATER LEVELS ACROSS BRITISH COLUMBIA"Meantime, the B.C. Environment Ministry says many streams are at or near record low water levels. In the North, the Liard River and the Skeena Rivers are at a 20-year lows, while the Bulkley River is at a 10-year low. The Cariboo region is also dry with the Quesnel and Horsefly rivers at 10 to 20-year lows, while flows along the Fraser River are at a 10-year low. Other dry areas include Vancouver Island and the Lower Mainland, the Central Interior and the Okanagan. On Vancouver Island, rivers of concern are the Tsolum River, which is well below average streamflow and Tofino Creek, which is slightly below average."The Globe and Mail reported on August 10 that, "According to (the provincial ministry of environment's) website, the Peace, Liard and Skeena regions have been classified as Drought Level 3, which would indicate 'concern for fish and water supplies, unless significant rainfall occurs.'"

The news articles can be read at http://www.vancouversun.com/sports/Drought+grips+Peace+River+region/3415228/story.html, http://www.montrealgazette.com/news/canada/Peace+River+water+levels+suspend+LaCrete+ferry/3391632/story.html, http://www.vancouversun.com/Drought+prompts+suspension+water+permits/3393746/story.html, http://thetyee.ca/Blogs/TheHook/Labour-Industry/2010/08/13/WaterRestrictions/, and http://www.theglobeandmail.com/news/national/british-columbia/dry-bc-summer-puts-fish-stocks-in-jeopardy-government-warns/article1668807/.

*Oil and Gas Commission gets a failing grade for water regulation*
Terms:

* energy
* fracking
* hyrdaulic fracturing
* oil and gas commission
* Water Act

18 August, 2010

Last week's events should have sounded some alarm bells for people wondering how the BC government regulates the oil and gas industry in Northeastern BC.

* On Monday (August 9th) the Oil and Gas Commission (OGC), a one-window government agency responsible for both regulating and promoting the oil and gas industry, released a report on how it regulates the industry's water use. Much of the report is aimed at
reassuring the public that the industry doesn't really use that much water.

* On Tuesday (August 10th) the Ministry of Environment issued a press release , Streamflow and Water Supply Conditions, confirming
that some regions of the province are experiencing a level 3 drought, including the Peace River, where most of the province's oil and gas activity is concentrated. A level 3 drought means that fish and water supplies are at risk unless it rains soon.

* The next day (August 11th) the OGC notified the oil and gas industry that it was suspending its rights to remove water from four water basins flowing into the Peace River (although not, interestingly,from the Peace River itself).

The OGC's directive to suspend the water rights comes 3 weeks after the Commission issued a bulletin "urging industry to be diligent in licenced water withdrawals and ensure withdrawals are in compliance with permit approvals." The Vancouver Sun's Scott Simpson covered the controversy at the time, including the possibility that the extractions may force BC
Hydro to import additional power from out of the province this year.

The oil and gas industry has not historically been a major water user; however, that's changed dramatically with the rapid increase in the use of hydraulic fracturing, known to its critics as fracking. Fracking is a process in which large quantities of water are injected into the
ground to shatter rock containing oil and gas and force it out of the ground. Not only does fracking use large amounts of water, but it also contaminates that water. The controversies of fracking are manifold, and have been documented elsewhere, including this year's award-winning documentary, Gasland.

Regulation of water for fracking in BC

Oil and gas companies take water from streams and rivers to frack because they are allowed to. In BC if you or I want to use water from a stream (for anything other than domestic use) we need to apply to the Ministry of Environment (MOE) either for temporary permission to usewater for less than 1 year or for a water licence" if the water will be used for longer than a year. There are rules about who can apply and other water users can appeal the MOE's decision to grant a water licence
to the Environmental Appeal Board.

Under s. 17 of the Oil and Gas Commission Act, it is the OGC, and not the MOE, that has the power to issue temporary permission to use water for less than 12 months to an oil and gas company. If an oil and gas company wants to use water for longer than 12 months they are still supposed to apply to the MOE, who after all are supposed to be the experts when it comes to regulating water.

For the most part (West Coast is only aware of one exception) oil and gas companies are not applying for water licences. Instead they apply to the OGC for short-term (12 month) approvals, applying repeatedly for all their projects in a region, to skirt the more rigorous requirements of the MOE's long-term water licence process. The OGC, in its recent report, describes how frequently these short-term approvals are granted.

The Commission issues short term water approvals under the Water Act

(Section 8). In fiscal 2009, the Commission issued 807 approvals, with a total maximum approved withdrawal of 78,569 dam3 [78,569,000 m3].

The Commission's report, other than mentioning the possibility of "an extension", is silent about what happens when the authorized 12 months is up. The answer seems to be that the Commission is happy to issue another short-term approval to the same company for the same project or projects essentially upon request.

In the view of West Coast, this is illegal. Section 8 of the Water Act clearly indicates that short-term approvals should only be granted where water is "required for a term not exceeding 12 months." There is no provision in the Act authorizing the OGC to grant an extension, which is in effect what they are doing when they allow repeated short-term approvals for the same project. The intent of the Water Act is clearly that if a user will require water for a term of longer than 12 months the user should apply to the MOE for a long-term water licence.

In addition to the questionable legality, by authorizing the oil and gas industry's water use through a series of rolling temporary approvals, the OGC has adopted an extremely non-transparent and unaccountable approach.

* All water licences issued by the MOE, both short- and long-term, are available on-line and can be searched by stream, user, etc. Not so with OGC short-term approvals. Researcher Arthur Caldicott was able to obtain one sample approval, and was told that to obtain others he would need to request them based upon the Oil and Gas Commission application number.

* The MOE will usually require applicants for licences to notify other water users and those who might be affected by the water use.

Those potentially affected can object to the licence and/or appeal any licence issued to the Environmental Appeal Board. There is no such notice given for the OGC's short-term approvals (while an appeal is still theoretically possible, it must be brought within 30 days of the issuance of the approval, which is difficult if a would-be appellant has been given no notice that the approval has been given).

* MOE licences usually require detailed information about where the water may be taken and how it will be used. By contrast, some of the OGC short-term approvals extend to wells that have not even been built yet, give no indication of where even existing wells are be located, and list multiple possible locations from which water may be taken.

For an example of a OGC short-term approval and a company's application for it, see the documents obtained by Arthur Caldicott.

This is not to say that hydraulic fracturing will be any less water-intensive if oil and gas companies have to apply for water licences through the more rigorous MOE process. At least one company has already chosen to apply for a longer-term licence -- because this licence will give it a green light to build a pipeline (something not possible under the OGC short-term approvals). However, at least the MOE licences are more transparent, and force the MOE to scrutinize the impacts of the water extractions to build the pipeline on other users and the environment. West Coast has criticized the significant weaknesses with BC's water licensing system, in relation to run-of-river power, and recommended changes to improve the system. But having an MOE licence is still better than a series of poorly regulated short-term approvals.

Comments on the Oil and Gas Commission's Report

Before leaving this topic, it is worth mentioning that throughout the water use report, the Oil and Gas Commission has sought to give the impression that the water extracted by the oil and gas industry is inconsequential:

* Although (as the report notes in passing) 99% of the oil and gas industry's water use occurs in Peace River Country, the report compares the industry's water use against province-wide useage. There is little information about how the oil and gas industry compares to other users in the Peace River area, or whether the industry's use impacts water flows in the Peace River country, particularly during a drought year.

* The Report uses a "rarely used" measurement known as cubic decametres to describe the water quantities being withdrawn. This gives the impression that the figures are smaller than if the more commonly used measure of cubic metres had been used.