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1st April 2018
...continued from Part one

A provincial land title search shows the property - District Lot 2615 - is in the Peace River District and owned by Joleen Meservy whose mailing address is listed in La Glace, Alberta. On her LinkedIn page Messervy describes herself as an owner and manager of the Bar 4A Cattle Company and as a “civil consultant” for Meservy Holdings Ltd. The word Shell and the corporation’s distinct bright yellow seashell logo outlined in red is prominently displayed beside the Meservy Holdings name.

According to the land title document, Shell holds three registered leases on the Meservy property. The document does not indicate how much Meservy paid to purchase the property, or how much she may have received from Shell in a one-time payment or annual lease payments, or what arrangements may have been made to let the company to access the land and take water away.

Meservey could not be reached for comment.

One of the Shell dams is identified in the document as “Water Pit #3” and was built in the middle of a wetland on the property. B.C.’s Ministry of Environment notes that wetland losses have accelerated in many parts of the province, that they are “one of the most important life support systems on earth,” providing critical habitat.

There is no information in the documents about whether the two dams were built to engineering standards.

In an emailed response to questions, Graham Currie, the OGC’s director of public and corporate relations, said the it “intends to issue and enforce” orders at the dams and that the commission holds Shell responsible for the structures.

Like the dams built on public land, those on private land were all built for one purpose: to supply water to natural gas companies for use in their hydraulic fracturing or fracking operations.

While prospects appear dim for a much-hyped liquefied natural gas industry in B.C., natural gas drilling and fracking operations are intensifying in the Montney region, thanks to an abundance of naturally occurring liquids or “wet gases” that flow to the surface following fracking operations. The liquids include pentane, butane and condensates, prized commodities in the Alberta tar sands.

High-volume fracking - a process where immense volumes of water are pressure-pumped deep underground to create cracks or fractures in gas-bearing rock - is now essential to coax gas liquids and methane gas to the surface because the best, easiest to access gas resources are long gone.

A need for more and more water

Methane - a gas, not a liquid - was long the mainstay of B.C.’s oil and gas industry. But with gas prices remaining stubbornly low, profits in the Montney now derive almost entirely from naturally occurring “wet” gases that flow to the surface with the gas following fracking. The drive to coax as many wet gases from the ground as possible has triggered a sharp increase in the amount of water used at fracking operations.

Encana, one of the region’s largest holders of wet gas deposits, predicts it will double its methane gas production in the Montney by 2019 while at the same time its gas liquids output will soar fivefold to reach 70,000 barrels per day.

That accelerating production means a need for more and more water.

In August 2015, a Progress Energy fracking operation in the Montney Basin consumed 160,000 cubic metres of water - the equivalent of 64 Olympic swimming pools - at just one well, according to award-winning investigative reporter and author Andrew Nikiforuk. The fracking operation triggered a 4.6 magnitude earthquake, a tremor far more powerful than the two 2.7 magnitude earthquakes that may have contributed to the recent failure of a tailings pond dam at an Australian gold mine in New South Wales.

The water pumped during the Progress Energy fracking operation was eight times more than the amount used in an average fracking procedure in the continental United States.

Just as the OGC must now rule retroactively on whether companies that built dozens of dams without permits on Crown lands should be allowed to continue to operate those facilities, it now falls to ministry personnel to decide the fate of at least 41 frack-water dams built on private land.

The dams in question are tiny compared to the region’s nearby hydroelectric dams or to larger tailings pond dams operated by mining companies, however, the Mattison report is clear that plenty of damage could occur in the event one of the unlicensed fracking dams were to fail.

Some fracking dams dwarf other earthen structures that have given way in other parts of the province causing great damage, Mattison said.

“Testalinden Lake was a small reservoir in the Okanagan holding about 55,000 cubic metres of water, artificially created by a small dam less than 10 metres high. In mid June 2010, the dam failed. Only about 20,000 cubic metres of water escaped and ran down a gully for 8 kilometres, by which time it was a debris flow of about 200,000 cubic metres. It destroyed five houses, blocked Highway 97 for five days, covered a four hectare orchard and a vineyard with one and a half metres of mud, and resulted in nine million in damages. Fortunately, there was no loss of life,” Mattison noted.

FOI documents reveal that some of the unauthorized fracking dams impound 150,000 cubic metres of water, roughly three times what the Testalinden dam held back.

The potential damage from the failure of even modest dams is one reason why the penalties for building dams without permits can be significant. If charged and convicted for violating the Water Sustainability Act or B.C.’s Dam Safety Regulation, fines can run to $200,000 and in the most extreme cases $1 million. The worst offences can also result in jail terms.

To date, however, neither the Oil and Gas Commission nor the ministry of forests, lands, natural resource operations and rural development have laid charges against any companies for violating provincial laws by building unlicensed fracking dams.

Instead, government has taken the softer approach of coaxing companies to “come into compliance” after the fact.

Time will tell whether or not that approach safeguards the public interest and proves a sufficient deterrent.