Oilfield Watchdogs Growing Teeth
The most dogmatic greens ‑ the “dirty-oil” faction crusading for nothing less than a halt to industrial activity, regardless of job losses ‑ will never admit it. But environmental policing of the petroleum industry is becoming stricter.
Over the past eight months, the Alberta Energy Resources Conservation Board has made two moves to tighten up protection of wildlife and water in the oil sands. New rules requiring cleanups of bitumen mine tailings ponds are going into force. Next, under a draft directive unveiled Feb. 18, comes limits to use of potable and brackish water by “in-situ,” underground extraction projects using wells and steam injections.
The oil sands are not the only part of the industry affected by the trend towards stricter policing, and the ERCB is not the sole agency involved. In a recent decision by co-operating federal and Alberta authorities that was cheered by conservationists as a turning point in their favor, EnCana Corp. has been barred at least temporarily from drilling in a spot that has been a cornerstone of its growth into Canada’s top natural gas producer for 34 years.
EnCana was denied permission to start a $233-million program of 1,275 shallow gas wells and 220 kilometers of gathering pipelines on southeastern Alberta plains known as the Suffield Block. The drilling was forecast to produce 125 billion cubic feet of gas (an energy reservoir equivalent to 21 million barrels of oil).
The Alberta Wilderness Foundation declared victory on behalf of an environmental coalition that fought the plan through more than a year of preliminary wrangling then a month of public hearings last fall. “It does represent a certain turning point that we can actually have a fairly substantial development essentially put on ice,” the foundation said.
The ruling was handed down by an institution that did not exist when EnCana’s ancestor, Alberta Energy Co., got its start as a gas producer on the Suffield Block. The decision came from a Joint Review Panel appointed by the federal and provincial governments under the Canadian Environmental Assessment Act. Members included former ERCB chairman Gerry DeSorcy.
As the latest round in a contest between forces of development and preservation that has spread from Alberta’s northern oil sands to its gas-rich southern plains, the ruling sent a message to industry that times are changing.
The decision said EnCana can apply again ‑ but not until a new environmental governance apparatus is set up on the Suffield Block. The territory is a 2,690-square-kilometer NATO military practice range created in 1941 for live-fire training of tank, artillery and infantry forces. It is heavily used by British and Canadian units.
The ruling affects a 458-square-kilometer segment of the block that was designated a Canadian National Wildlife Area in 2003 ‑ ironically, with support from EnCana in a display of corporate citizenship. The area contains about 30 per cent of Alberta’s remaining natural grassland, which has been saved from farming and ranching by being inside the military range. The place is home to 1,100 wildlife species including 15 ‑ from kangaroo rats to songbirds ‑ that are designated as endangered, threatened or of special concern. The military has been barred from the area since 1971. There is no public access because it is ringed by the at times highly hazardous firing range for rapidly mobile army hardware.
EnCana’s 9,400 producing Suffield wells include 1,145 previously drilled in the protected zone, and the company pledged the new program would continue to use “minimal disturbance techniques that mitigate the impact of our activities.” The firm’s methods include searching for rare wildlife and detouring around its homes, and drilling only during October to April while the prairie is frozen and the animals are hibernating in burrows safely out of harm’s way.
But the panel made it plain that the old era when governments could go along with requests by companies just to be trusted to behave properly towards the natural environment are long gone. The unanimous decision held that a light policing regime created when EnCana first obtained access to the block in 1975 is not up to contemporary standards. “Requirements for environmental protection and the legislative framework have evolved considerably,” the ruling said.
The old regime included an official Suffield Environmental Advisory Committee. It was created by a federal-provincial agreement that opened up land surface access to drilling sites for the old Alberta Energy Co. The company has exclusive rights to rich, provincially-owned gas deposits beneath the military range.
By 21st-century standards the committee is “under-resourced,” the new ruling said. “There appears to be considerable uncertainty regarding the roles and responsibilities of various participants.” As well, “oversight activities intended in the 1975 agreement do not appear to be fully functioning.” Final responsibility for approving drilling programs has been in the hands of the military base commander, with the advisory committee providing information.
No new drilling should be approved until a modern regulatory apparatus is set up with a clear mandate, up-to-date performance standards and the resources to enforce them, the panel said. The Canadian defense department needs to develop an environmental management plan, the decision added.
The ruling said the gas program could conceivably turn out to be acceptable after government environmental scientists identify sensitive wildlife habitat that deserves to be declared entirely off-limits to industry. That exercise is projected to take six months to two years.
The panel said its decision is “without prejudice” to any future drilling applications, but added that “the proposed project may not be feasible” or only “a reduced version” might be acceptable. It is impossible to know because EnCana’s rejected application did not include a sufficient environmental assessment to project a final verdict, the ruling said.
Conservation rules for the oil and gas industry are not only tightening up on paper. The watchdogs are growing teeth.