Drought puts gas industry practices under microscope

Northeast B.C. water withdrawals challenged by local residents and other critics

by Scott Simpson, Vancouver Sun

July 23, 2010

Some northeast B.C. residents are questioning government policies that allow natural gas exploration companies to pump water out of streams and lakes despite a severe drought.

Gas explorer Talisman Energy has been taking water out of BC Hydro's Williston Reservoir - unbeknownst to Hydro - despite a warning that dry conditions will force the Crown corporation to import at least $200 million worth of electricity this year.

Talisman has a permit from the BC Oil and Gas Commission to make the withdrawals. Hydro referred questions about the situation to the government.

Residents are questioning why the oil and gas commission is permitting gas service industry tanker trucks to make round-the-clock water withdrawals in the Peace River, which is running at minimum level downstream of two Hydro reservoirs, including Williston.

The region has had only 30 per cent of normal rainfall, and many rivers are at or near record lows for this time of year.

Gas drillers need a steady supply of water to support shale gas exploration and development in the vast Montney gas play near Fort St.

John. Fluids are pumped at high pressure into gas wells to hydraulically fracture or "frac" the shale to coax the gas out of it.

Gas royalty revenues are the single largest source of resource royalty income for the B.C. treasury.

This week, following a "water conservation request" bulletin from the ministry of environment, the oil and gas commission issued a bulletin "urging industry to be diligent in licensed water withdrawals and ensure withdrawals are in compliance with permit approvals."

The Canadian Association of Petroleum Producers acknowledges it is a large-scale consumer of water, but says it's making every possible effort to be a responsible user.

For example, it has a contract to pump municipal "grey" or waste water from Dawson Creek, and also recycles saline water deposits it encounters during drilling, CAPP representative Travis Davies said.

Energy Minister Bill Bennett said in an interview that in general, "the industry is making efforts to use less water."

"The companies are aware there is a lot of activity taking place and that some folks are shocked by it," Bennett said. "They are doing their best to make sure people understand how the industry works and they are doing their best to reduce their footprint."

West Moberly First Nation Chief Roland Willson said there are "huge amounts of water coming out" and he's concerned demand will escalate to unsustainable levels as activity accelerates in the Montney over the next decade.

"We have trucks here now running 24 hours a day. At any given time, at Lynx Creek just east of Hudson's Hope, there are six trucks sitting there waiting. This isn't all of them. This is one company that's operating here [in one location]," Willson said.

Peace River Valley resident Gwen Johansson said she heard at a workshop in February "there was more water being permitted by the oil and gas commission in the Peace than there was through the ministry of environment."

"The question is whether the oil and gas commission ought to be issuing permits for water at all."

Will Koop, coordinator for the B.C. Tap Water Alliance, said the emergence of shale gas exploration has created "a tremendous requirement for water in northeast British Columbia."

"Companies with hundreds of new tenures throughout northeastern B.C. are looking for these vast quantities of water, fresh water that's required.

It's putting a stranglehold on the planning agencies," Koop said.

"The government doesn't have a very well-thought-out plan for all of the cumulative effects, which includes the enormous amounts of fresh water that are required."

ssimpson@vancouversun.com

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