By Ben Parfitt for the Canadian Centre for Policy Alternatives.
Efforts by
BC Hydro to ban potentially
destructive natural gas company fracking operations in the vicinity of
its biggest dams fall well short of what an Alberta hydro provider has
achieved, raising questions about why British Columbia isn’t doing more
to protect public safety.
Documents obtained through a Freedom of Information (
FOI) request by the Canadian Centre for Policy Alternatives show that
BC Hydro officials have feared for years that fracking-induced earthquakes could damage its dams and reservoirs.
Senior dam safety officials with the public hydro utility even
worried for a time that natural gas companies could drill and frack for
gas directly below their Peace River dams, which would kill hundreds if
not thousands of people should they fail.
“The Montney gas field has vertical
stratification of subsurface [natural gas] rights, so there may actually
be a number of different owners laying claim under our damsites,”
BC Hydro’s director of dam safety, Stephen Rigbey said in an April 2012 email released in response to the
FOI.
No Mandated Frack-free Zones Near Dams
Yet, after years of discussions with B.C.’s Oil and Gas Commission (
OGC), which regulates oil and gas industry activities in the province,
BC Hydro has obtained only modest commitments to prevent fracking near its two Peace River dams — the massive
WAC Bennett dam, which impounds the world’s seventh-largest reservoir, and the smaller Peace Canyon dam downstream.
The restrictions, which
BC Hydro’s director
of dam safety Stephen Rigbey describes as “an understanding,” also
apply to a third dam on the river, the controversial $9-billion Site C
project, currently in pre-construction.
Both
BC Hydro and the
OGC
say that the understanding is that “there will be no new tenures”
issued to companies wishing to drill and frack for natural gas within
five kilometres of
BC Hydro’s dams. However, companies holding existing rights would not be prevented from doing so.
“If future activity related to the existing
tenures is planned, we will work closely with the Oil and Gas
Commission to put restrictions in place to effectively manage any risk,”
Rigbey said in an email response to questions.
What those measures would be remains the subject of ongoing
discussions. No restrictions are presently in place around any of the
massive reservoirs impounded by
BC Hydro’s Peace River dams or the lands that could one day surround the Site C reservoir.
In an email response to questions, the
OGC
said that at this point in time, the Ministry of Natural Gas Development
“is not accepting any new requests for subsurface [natural gas] rights
within 5 kilometres of the Site C construction area.”
The Commission went on to say that “there are
no active hydraulic fracturing operations” within the five kilometres of
BC
Hydro’s Peace River dams but that there are “a small amount of existing
subsurface rights issued within the 5 km buffer zone around Site C.”
“These were issued prior to the creation of
the buffer. Any applications in that area, or elsewhere, go through a
strict review process before permits are issued. The Commission is also
talking with
BC Hydro about any additional
permit conditions that would be required to protect public safety and
the environment in the area specifically, before construction occurs on
Site C.”
The measures to date in B.C., fall well short of what Alberta hydro
provider, TransAlta, has achieved. In interviews and correspondence with
the company, TransAlta revealed that it has effectively shut down all
fracking within five kilometres of one of its dams and also around the
entire dam’s reservoir as well. And it has succeeded in imposing
restrictions on potentially destructive fracking operations in a zone up
to ten kilometres away from its damsite.
But, as is the case in B.C., there is nothing in writing to reassure
members of the public — no regulation or government statement — banning
natural gas companies from fracking near sensitive infrastructure such
as hydro dams and reservoirs. Both provinces appear reluctant even to
suggest that fracking is inappropriate in certain cases where public
safety is concerned, perhaps fearing the precedent such an admission
would represent.
“At this time there is no
regulated/government mandated exclusion areas near critical
infrastructure in Alberta,” says TransAlta’s chief media spokesperson,
Stacey Hatcher. Rather, Hatcher says, an “agreement” has been reached to
exclude some hydro dams and reservoirs from fracking zones.
Christy Clark's Conflicting Agendas
BC Hydro’s modest achievements to date come
as the Christy Clark government pursues two at times conflicting
agendas. On the one hand, the government vows to push its Site C hydro
dam, the most expensive infrastructure project in B.C.’s history, “
past the point of no return.”
On the other, it continues to aggressively push for Malaysian
state-owned Petronas to invest billions of dollars to build a Liquefied
Natural Gas (
LNG) processing plant near Prince Rupert and to
tarnish all those who oppose the project.
Should such a plant be built, natural gas drilling and fracking near
the Peace River and its hydro facilities would significantly ramp up.
In an April 2012 email, Rigbey likened potential fracking in the
Peace to “carpet bombing,” and added that much of the anticipated
fracking in future years would occur across the “well-established”
regional stress regime.
Even if no such plant materializes in
B.C. — an increasing likelihood given the recent announcement that another
LNG proponent,
Shell, appears ready to scrap its bid to build one —
an upswing in natural gas prices would almost certainly result in
increased gas drilling and fracking operations, including on lands
alongside the reservoir that would be created by the Site C dam, which
would flood more than 100 kilometres of the Peace River and
its tributaries.
Documents filed by
BC Hydro with a panel
that reviewed the project for the provincial and federal governments
noted that, even in the absence of fracking, nearly 4,000 landslides are
expected to dump debris into the reservoir as a result of the Site C
dam being built. The 676-page report that discusses those landslide
risks makes no mention of additional risks to the reservoir should
earthquakes be triggered nearby.
Martyn Brown, a former chief of staff to Premier Clark’s predecessor,
Gordon Campbell, says the province’s conflicting agendas underscore a
troubling aspect of the government’s regulation of oil and gas industry
operations near critical infrastructure. From the outset, Brown says,
the
OGC has both promoted and regulated oil
and gas industry activities. Limiting where companies drill and frack is
simply not part of the
OGC’s mandate or culture.
Brown likens the
OGC to the National Energy
Board. “It has a dual role as a proponent of oil and gas development,
but also its regulator. And I think there is a fundamental conflict with
that,” Brown says. He adds that “political oversight” of the
OGC
is also problematic because two Cabinet ministers — Energy and Mines
Minister, Bill Bennett, and Minister of Natural Gas Development, Rich
Coleman — are effectively there to “promote oil and gas activity.”
Concerns for public health and safety should mean that when tensions
between the province’s publicly owned hydro utility and the natural gas
industry arise it falls to a neutral ministry to determine what
activities will be allowed or disallowed near critically important
public infrastructure like dams and reservoirs, Brown said.
“Clearly what you need now is an
independent voice in cabinet, the Environment Minister, to make broad
determinations in an independent way,” Brown said. “The promoter should
not be the regulator of oil and gas activities.”
Fracking-induced Earthquakes Cause Alarm
Documents released in response to the
FOI
request show that in both Alberta and British Columbia hydro providers
have become increasingly alarmed at natural gas company incursions onto
lands near their dams. The concerns have escalated as distinct clusters
of earthquakes in confined areas over short periods of time have
occurred in lockstep with fracking operations.
In one email, Rigbey notes that there are “no regulations to stop”
oil and gas companies “from injecting into a pre-existing fault” in the
rock. In other words, there is a risk that induced fractures could be
forced into geologically unstable areas triggering or setting the stage
for earthquakes. While gas companies might not want to tap into such
faults, Rigbey noted, “accidents can happen.”
In its public pronouncements, however,
BC
Hydro has been more muted in its concerns. In a 551-page report filed
with the joint federal-provincial panel that reviewed the Site C project
for example,
BC Hydro
devoted less than two pages to discussing “petroleum industry-related” earthquakes and it downplayed their threats.
“The Oil and Gas Commission is now establishing procedures and requirements for monitoring and reporting of induced seismicity,” BC
Hydro reported to the panel in January 2013. “Each case of induced
seismicity will be evaluated on the basis of its unique site-specific
characteristics, but it is proposed that hydraulic fracturing would be
suspended upon detection of an earthquake of magnitude M4 or larger. It
should be noted that earthquakes less than about magnitude M5 do not
release enough energy to cause damage to engineered structures.”
In response to written questions, the Oil and Gas Commission said that as a result of discussions with
BC Hydro the province “has established a five kilometre buffer area around the
WAC Bennett, Peace Canyon and Site C dams.”
Graham Currie, the
OGC’s executive director
of corporate affairs, added that the Site C dam location is squarely
within the Montney Basin, which contains large quantities of shale gas.
Gas from dense shale rock formations can only be coaxed from the earth
by extensive use of fracking.
Gail Atkinson, an expert on induced earthquakes and a professor in earth sciences at the University of Western Ontario (
UWO),
says induced earthquakes can be hazardous because they occur much
closer to the earth’s surface than do natural earthquakes. If such
events happen near dams or other surface structures, the ensuing shaking
can be much worse than would be the case with a naturally occurring
earthquake of the same magnitude.
The higher the number of fracking-induced earthquakes near dams, the
greater the risk that one of them might be sufficiently strong enough to
exceed what the dams are engineered to withstand.
“If the frequency of experiencing
earthquakes near a dam increases, then the level of expected ground
motions at the 1 per cent in 100 year likelihood level will increase,”
Atkinson said. She warns that the risk will be greatest “in areas where
the hazard was initially low because there is little
natural seismicity.”
Atkinson added that even earthquakes of a “moderate” strength could
damage dams or other structures if they are induced “at close distances”
to such structures.
Such risks are not something that
BC Hydro
talks about publicly, however. In an on-line video on dam safety, for
example, Rigbey talks about the threats to dams from naturally occurring
earthquakes but
never once even mentions fracking or the increasing number of tremors associated with it.
Alberta's TransAlta 'Concerned' About Fracking Earthquakes Near Dams
Atkinson’s work has clearly influenced TransAlta’s thinking. The company is
one of three organizations that funds Atkinson’s fully endowed research chair on hazards associated with induced earthquakes at
UWO.
The other two are the National Sciences and Engineering Research
Council and Nanometrics, a maker of seismic monitoring equipment.
TransAlta also pays for some of its engineers and dam safety officials
to be part of an ongoing multi-disciplinary research effort known as the
Canadian Induced Seismicity Collaboration or
CISC.
The
CISC’s website notes that
fracking-induced earthquakes are a “pressing problem” in Western Canada
and in British Columbia and Alberta particularly. “There is a
significant (though very small) possibility that triggered events could
be large enough
to cause significant damage,” the
CISC’s scientists say.
According to Hatcher, TransAlta has secured agreement from natural
gas companies operating in Alberta that they will adhere to a special
“traffic light” system in a zone between five kilometres and 10
kilometres from its Brazeau dam and the shorelines of the dam’s
13-kilometre-long reservoir. “The traffic light system works in a
similar manner to other traffic light systems for hydraulic fracturing,
with a Green (proceed)/Yellow (pause and monitor) and Red (stop)
protocol,” Hatcher said in written response to questions.
“TransAlta is concerned about the potential
impact of fracking induced earthquakes and continues to work with the
Alberta Energy Regulator (
AER), Alberta
Environment and the oil and gas operators to ensure that hydrocarbon
development occurs in a safe manner that doesn’t create unnecessary risk
to existing infrastructure,” Hatcher added.
In the much more sensitive zone immediately beside the dam and
reservoir and extending out five kilometres, TransAlta has effectively
shut down all fracking operators after filing a number of “statements of
concern” with the
AER, Alberta’s equivalent of the
OGC.
Hatcher said that TransAlta could not release the documents and referred questions to the
AER. The Canadian Centre for Policy Alternatives has filed a second Freedom of Information request to obtain copies.
Documents released by
BC Hydro in response to the first
FOI show that
BC Hydro was prompted to call for frack-free buffer zones around its dams after learning what TransAlta had achieved in Alberta.
BC
Hydro’s Peace River dams are not only the biggest power sources in the
province’s hydroelectric network (the Bennett dam furnishes one-quarter
of the province’s hydroelectric power), but also in the region of the
province with the richest natural gas reserves.
Special Consideration Given to Underground Gas Storage Reservoir
Only one other highly sensitive, yet little known, infrastructure project in
B.C. is currently the subject of special operating guidelines as far as fracking is concerned.
BC Hydro learned of those guidelines in email correspondence with the
OGC.
The infrastructure in question is a massive underground storage reservoir capable of holding
77 billion cubic feet of natural gas.
It is near an area called Pink Mountain, where Progress Energy, a
subsidiary of Petronas, is actively engaged in building roads, well
pads, freshwater and wastewater holdings ponds, compressor stations,
pipeline corridors and other infrastructure integral to the gas-drilling
and fracking process.
The company also has plans on the books, which the provincial government has
exempted from BC Utilities Commission review,
to have a privately owned and operated hydro transmission built to the
Pink Mountain area from the Peace River’s hydroelectric facilities. The
new line would allow Progress to burn less natural gas in compressors by
switching to hydroelectricity, thus increasing the profitability of its
fracked gas.
The underground gas storage facility consists of two underground
storage reservoirs and is about 1,400 metres below the ground. Since the
late 1980s, natural gas has typically been pumped into the reservoirs
in the summer months when gas demand is low and then pumped out as
needed in the fall and winter months.
Fortis Inc. announced that it was purchasing the facility from Chevron in 2015 at a cost of approximately
US$266 million.
At the time of its purchase, Fortis noted that the facility could become critical in the event
LNG went ahead in the province. “The facility — which is the only underground gas storage facility in
B.C. offering storage to third parties — is also uniquely positioned to benefit from the completion of proposed
LNG export projects, where it could provide balancing services to suppliers and
LNG exporters.”
In an email response to questions, David Bennett, Fortis
BC’s director of communications and external relations, said that “successful meetings” were held between the company, the
OGC
and the provincial Ministry of Natural Gas Development. Those talks
resulted in new rules that “ensure current and future drillers and well
operators are aware of the facility and operate in such a manner to
maintain the integrity of the underground storage reservoirs and ensure
that new well production is not taken from the
ACGS [Aitken Creek Gas Storage] reservoirs.”
In a follow-up phone conversation, Bennett said that Fortis had no
fears that fracking into the reservoir could result in a cataclysmic
event such as an explosion. The main concern, he said, is to avoid
someone taking gas out of the reservoirs by fracking into them. “We
don’t want anyone interfering with the reservoir,” he said, adding
Fortis wants Progress Energy and any other companies engaged in fracking
“to stay away from the reservoir.”
Documents released through the
FOI show that the
OGC
has “conditions for permits” in place in proximity to the gas
reservoirs. The conditions do not include an outright ban on fracking or
gas drilling in a buffer area around the reservoirs. On maps supplied
by the
OGC, the buffer area is irregularly shaped but in most cases extends less than five kilometres out from the reservoirs.
In email correspondence, the
OGC said that
any company holding a permit to drill and frack for gas near the
reservoirs “must not conduct any drilling completions or well
operations” that have “a material adverse impact on the integrity or
safe operation” of the facilities.
How this is monitored and enforced is not clear.
Natural gas companies operating in the zone are also required to
notify Fortis when a well is about to be drilled and fracked. They must
also notify the company when they resume drilling following “a temporary
suspension” of such operations.
The special permit conditions, which
BC
Hydro has a copy of, do not specify what would lead to a “temporary
suspension.” But earthquakes induced by fracking are among those events
that have triggered stoppages in previous fracking operations.
Like the arrangements that have been worked out with
BC Hydro, the special operating conditions at Aitken Creek are not common knowledge. Neither the
OGC,
nor the Ministry of Energy and Mines, nor the Ministry of Natural Gas
Development has issued a press release stating that the special permit
conditions, such as they are, are in place in the Aitken Creek area.
Much like the silence surrounding buffer zones around B.C.’s biggest
hydroelectric dams, the government seems to be of the view that the less
said, the better.
- Ben Parfitt is a resource policy analyst with the Canadian Centre for Policy Alternatives – BC Office and author of Fracking Up Our Water, Hydro Power and Climate: BC’s Reckless Pursuit of Shale Gas, a research report published in 2011 that called for frack-free zones.