‘Hard to believe it’s real’: B.C.’s energy regulator repeatedly gave Coastal GasLink a pass on alleged environmental infractions

When officials from the BC Energy Regulator travelled to Wet’suwet’en territory in September 2022, they were planning a routine inspection of a fish-bearing stream.

Two years had passed since Coastal GasLink completed installation of a section of pipeline through the stream, a tributary of Tchesinkut Creek, near the community of Burns Lake in northwest B.C.

They discovered Coastal GasLink had never finished restoring the waterway and, for two years, pipeline construction had been impacting fish habitat. It was a mess. 

A compliance and enforcement officer with the regulator noted the work had “disrupted” the stream’s natural course and the water was flowing into a trench that had been dug to install the pipeline. 

It was not immediately clear why the stream remained in bad shape for so long, but the regulator noted in its inspection report it had “considerable concerns with leaving these works uncompleted for an extended period of time.” The regulator also directed the company to restore the natural flow of the stream and monitor it to ensure continued construction activities weren’t harming or stranding any fish.

Yet the report concluded: “No non-compliance noted during inspection.” Despite the impacts to the fish-bearing stream, government officials didn’t consider the pipeline company to be breaking any rules.

Provincial records show the lenient response from the B.C. regulator isn’t an isolated incident. A review of 40 inspection reports show the regulator identified more than 80 potential infractions at Coastal GasLink worksites but enforcement officers only flagged five as violations of provincial regulations. Some of the alleged infractions identified in the BC Energy Regulator’s inspection reports that went unpenalized included activities that directly impacted sensitive ecosystems. Those include minor spills, piles of contaminated soil, open chemical bottles thrown into wetland fencing and workers running heavy machinery directly in flowing water.

The Narwhal spent months sorting through publicly available records and data, analyzing government documents obtained through freedom of information legislation and poring over provincial laws and regulations to examine how the pipeline construction is being monitored. The results detail how the BC Energy Regulator, an industry-funded government agency that manages oil and gas activities, was given responsibility for overseeing compliance with a bevy of provincial and federal laws — and what that looks like on the ground.

Some experts say the reality is there is a pattern of lax oversight that is putting public safety and environmental protection at risk.

“Let’s face it, the potential impacts are high,” former government consultant Donna Forsyth told The Narwhal in an interview.

The regulator told The Narwhal in an emailed statement its enforcement officers sometimes “identify concerns with activities that, based on their assessment, do not meet the legislative requirements of being a non-compliance.” Instead, they talk to the workers on the ground and tell them what needs to be fixed.

Deborah Curran, executive director of the Environmental Law Centre at the University of Victoria, said it’s important to understand the history and uniqueness of the regulator.

“The original purpose of the BC Energy Regulator was very much to facilitate the development of the oil and gas industry in the province,” she added. She said while that has shifted somewhat since, the regulator’s origin story goes a long way to explain the current state of its compliance and enforcement.

“This is a fairly unique arrangement … No other industry has a similar setup,” she said, explaining the regulator is both a “one-stop shop for all approvals” and in charge of keeping companies in line with the laws.

Despite conducting more than 500 inspections of the project to date, the regulator fined the Calgary-based energy giant TC Energy, which is building Coastal GasLink, 12 times. The dozen tickets were for violations of B.C.’s Water Sustainability Act. Each ticket cost the company $230 for a total of $2,760. The estimated cost to complete construction of the northern B.C. pipeline is $14.5 billion.

The regulator said it levied penalties against the company that were “determined by an existing statute” under provincial legislation related to works around sensitive waterways, and the tickets were “in regards to the reporting of water-use volumes, even if no water was taken and used.” 

The section of the act which details offenses related to sensitive streams, notes an infraction can come with a penalty of up to “$200,000 or imprisonment for not longer than six months.” If the offence is deemed severe enough, that amount can be escalated to $1 million or up to a year in jail.

The regulator did not specifically explain what would have triggered higher fines. It said the province could take a company to court based on BC Energy Regulator information but in the case of Coastal GasLink’s infractions, the regulator determined issuing the tickets was “the most appropriate response.”

The regulator has also issued four orders and five warning letters for “sediment and erosion control matters, construction-related concerns and failures to report,” according to documents drafted in March.

A spokesperson with TC Energy did not directly answer The Narwhal’s question about why the fish-bearing stream had been disrupted for two years and noted the tickets were for “administrative errors.”

“Coastal GasLink respects the role our regulators have in upholding the high regulatory standards we are committed to meeting.”

‘How did we get here?’

While the regulator has intervened on only a fraction of incidents flagged by its inspections, a separate provincial office has a much higher rate of interventions, despite conducting far fewer inspections.

Officers from B.C.’s Environmental Assessment Office, a government branch within the Ministry of Environment and Climate Change Strategy, conducted less than 100 inspections targeting Coastal GasLink since construction began. These resulted in the office issuing 30 orders, 59 warnings and five administrative penalties totalling more than $800,000, including a recent penalty of $346,000. 

Those penalties were issued primarily for failure to prevent sediment from spilling out of construction sites into fish habitat, according to the assessment office. The office also charges Coastal GasLink fees to cover the cost of its inspections, adding up to more than $200,000 to date.

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When asked if the province was satisfied with the regulator’s compliance and enforcement activities, a spokesperson with the office did not directly answer.

“The Environmental Assessment Office monitors for compliance with the conditions and requirements outlined in the environmental assessment certificate granted for a project,” the spokesperson wrote in an email to The Narwhal. The BC Energy Regulator “monitors for compliance with the requirements of the permits and authorizations they oversee. [The regulator] would be best placed to speak to their approach to compliance and enforcement, including their policies for enforcement actions such as warnings, orders and fines.”

The regulator agreed, noting the two government agencies “operate under different acts and regulations and as a result enforce different regulatory requirements.” The regulator added that its methods of keeping Coastal GasLink in compliance were rigorous.

“The [BC Energy Regulator’s] robust and frequent inspection schedule, combined with a graduated enforcement model, allows non-compliances to be identified quickly and ensures companies take corrective actions within a specific period of time, before the need for escalated measures, including fines,” a spokesperson wrote.

Shannon McPhail, executive director of Skeena Watershed Conservation Coalition, said the data shows the regulator is “clearly not” living up to its responsibilities.  

“If you didn’t know anything about the [BC Energy Regulator], it would be natural to assume they have been hired by industry to ensure their projects get completed regardless of how many laws the proponent breaks,” she said in an interview. “It’s gotten so bad that it’s hard to believe it’s real. How did we get here?”

Regulator didn’t impose penalties for dozens of issues

Unlike B.C. Environmental Assessment Office inspection reports, which are regularly published to the department’s website, BC Energy Regulator reports are not publicly available. The regulator spokesperson said that’s because its inspection reports “can contain personal and/or confidential information and are subject to [freedom of information] review to allow for proper redaction of such information.” 

When asked why the provincial regulator does not remove sensitive information prior to publishing reports — a method the Canada Energy Regulator employs to proactively post inspection reports — the spokesperson said B.C. conducts around 4,000 inspections annually and said it doesn’t have enough resources to publish all of them. Instead, it says it only publishes summary information about infractions on its website.

Of the 40 reports obtained by The Narwhal, the only redactions applied were to remove the names of government officials. 

The regulator’s field staff includes 22 compliance and enforcement officers and four technical advisors, based in Fort St. John, Dawson Creek, Fort Nelson and Terrace, B.C. Three of those officers are responsible for monitoring the entirety of the 670-kilometre pipeline project, with support from “various subject matter experts,” according to the spokesperson. 

According to the documents reviewed by The Narwhal, government officials conducted 75 per cent of inspections with a Coastal GasLink contractor present. Some of the reports also suggest the pipeline workers were informed of the inspection ahead of time. 

“Compliance and enforcement officers are able to use discretion when choosing to inform permit holders and/or subcontractors prior to conducting inspections,” the regulator spokesperson wrote. “Given the length, remote nature and access considerations of Coastal GasLink, [compliance and enforcement] officers do sometimes communicate and co-ordinate inspections with [Coastal GasLink] environmental inspectors.”

When deficiencies like the disrupted stream were identified, the officers regularly noted issues were “discussed with the operator” before concluding the site was in compliance with environmental and permitting regulations.

For example, one inspection noted workers installed the pipeline across a waterway without setting up equipment to protect the stream. While there was “no flow at time of inspection” the officer flagged the risk of sediment leaving the site during fall rains. Under B.C. environmental regulations, any work being done in a stream, creek or river needs to be isolated, meaning protective measures have to be installed on either side of the worksite to make sure the construction work isn’t interrupting the natural flow of water or impacting habitat outside the crossing. 

“I was told that isolation equipment was nearby in a vehicle but the vehicle was not able to travel the [right-of-way] due to active pipeline installation,” the officer wrote. “Recommend having isolation material adjacent or in closer proximity to the crossing.”

In other words, the pipeline workers had the necessary equipment to protect the stream, but weren’t using it. Instead of writing up the company for a violation, the inspector simply described the situation and concluded the company was in compliance. 

Another report suggested the workers on site didn’t have adequate training to deal with a situation where heavy machinery had been working directly in flowing water, without any protective measures in place. The government official noted Coastal GasLink had halted construction prior to the inspection after industry inspectors flagged the issue.

When the regulator’s compliance and enforcement officer arrived, there was no supervisor on site and the officer noted the workers who were there didn’t know how to address the problem. 

“Supervisor was requested to attend the site but was busy,” the officer wrote.

This inspection did not result in the regulator issuing any corrective actions, such as a warning or order. When asked whether this was typical of BC Energy Regulator compliance and enforcement, the spokesperson did not directly answer.

“Our objective is to keep permit holders within regulatory compliance (and return them to regulatory compliance if they become non-compliant) with the ultimate goal of ensuring the associated regulatory aims, such as public safety or environmental protection.”  

“There is nothing in colonial law … that requires governments to enforce anything,” Curran said. “The reality is we just aren’t getting at every single infraction that is out there, nor are we even coming close.”

To McPhail, who has been fighting for years to see more transparency and accountability with government oversight of the pipeline project, these details are infuriating.

“Just who exactly does the [BC Energy Regulator] represent when inspecting pipelines?” she asked. “It certainly doesn’t seem to be British Columbians and it clearly isn’t the laws or legislation they purport to uphold.”

‘A real disconnect’ between legislative powers and enforcement

Coastal GasLink crosses more than 700 streams, creeks and rivers, most of which are home to numerous fish species, including declining wild salmon populations. Getting the pipe across these waterways is often an intrusive process — diverting streams and digging trenches through creek beds — and the landscape on which the work is being done is remote and hard to access.

“Coastal GasLink is a complex project and is subject to some of the most stringent regulatory requirements in the world,” the company’s spokesperson wrote. “This complexity includes British Columbia’s diverse terrain and slopes, as well as unpredictable temperature and ever-changing weather conditions.”

According to government documents, the various regulatory agencies agreed the BC Energy Regulator would be “the lead compliance and enforcement agency for stream crossings.” 

In an internal briefing note drafted in early March, George Heyman and Josie Osborne, B.C.’s ministers of environment and energy, respectively, were told a memorandum of understanding between the regulator and the environmental assessment office, as well as agreements with other government agencies such as Fisheries and Oceans Canada, form the basis of that arrangement.

McPhail is baffled by this arrangement, noting “salmon and other anadromous fish should fall under federal jurisdiction.”

While the agreements provide a framework for how the BC Energy Regulator collaborates “to share information and data, and provide expertise for audits, inspections and investigations” its authority is derived from legislation. 

By way of the recently renamed Energy Resource Activities Act (previously called the Oil and Gas Activities Act) the regulator has special powers over the Environmental Management Act, Water Sustainability Act, Land Act, Wildlife Act, Forest Act and Heritage Conservation Act, among others. 

This means the regulator can make decisions and issue permits to clear an archaeological site, for example, or cut down forests to clear land for fossil fuel projects. It also means the regulator is responsible for enforcement if a project like Coastal GasLink is breaking any of those laws.

Doug Caul, former director of the Environmental Assessment Office who recommended approval of Coastal GasLink in 2014, wrote in his decision that legislative powers were granted to the government agency to fast-track permitting, provide certainty to fossil fuel companies and prevent unnecessary duplication.

Forsyth, a consultant who advised the province about the Oil and Gas Activities Act in the mid-2000s and helped draft the Water Sustainability Act, said the allocation of authority to the regulator has had the effect of watering down B.C.’s environmental protections. 

“Most people just think if we have laws that’s the end of the story,” she told The Narwhal in an interview. “But just look at speed limits: if nobody was out there enforcing them, it’d be much worse. Or drinking and driving: people were doing it for decades and now they don’t as much because it gets enforced.”

She said it also perpetuates a false narrative about the province’s burgeoning liquefied natural gas export industry.

“There’s ministers that say, ‘Oh, we’ve got the best regulations in the world and that’s why it’s clean gas,’ ” she explained, paraphrasing a talking point regularly used by B.C. politicians and industry groups like the Canadian Association of Petroleum Producers. She said the regulations are “pretty reasonable on paper” but noted the energy regulator was given discretion over whether or not to enforce those rules.

“They are the boots on the ground, paid for by industry,” she said. “I think there’s a real disconnect between what’s on paper and what and who is actually dealing with things, or turning a blind eye, in the field.”

‘An embarrassment to the province’

Three other gas pipelines approved by the B.C. government have yet to be built. The Pacific Trails pipeline, which closely follows the route of Coastal GasLink, and the Westcoast Connector Gas Transmission pipeline are owned by multinational pipeline and energy company Enbridge. TC Energy owns the Prince Rupert Gas Transmission project, a contender for supplying gas to Ksi Lisims, a proposed liquefaction and export facility on Nisga’a territory currently undergoing environmental assessment.

“This government cannot responsibly manage, permit, regulate or assess a project of this scale,” McPhail said. “Before we entertain any more pipeline construction in this province, the government needs to get their shit together — and it’s clear that they don’t have it together.”

George Heyman, B.C.’s environment minister, told The Narwhal Coastal GasLink was approved in 2014, under “the previous government.” Since then, he wrote, B.C. updated its environmental assessment legislation “to strengthen the laws that protect a broader range of effects that matter to the people of British Columbia, and to fully recognize the rights of Indigenous Peoples.”

“This created a more robust assessment process going forward as well as better compliance and enforcement for all projects, whether approved under the former or current legislation,” he explained, adding the government entered into a compliance agreement with the company last year.

“This agreement also provided the [environmental assessment office] with additional enforcement tools that resulted in multiple stop-work orders and orders to remedy this spring, as well as substantive financial penalties,” Heyman wrote. “These are evidence of effective enforcement action. We will continue to hold [Coastal GasLink] to account for meeting all provincial requirements to protect the environment.”

The penalties levied against the company by the office include $72,500 in February 2022, $170,100 in May 2022 and $213,600 in January 2023, as well as $346,000 in September 2023.

“For those who are considering a pipeline on their traditional territories or near their communities and municipalities, I can imagine there is an assumption that the policies, laws and legislation will protect their interests if the proponent causes damage — but that’s clearly not the case,” McPhail warned. 

“We’ve got to collectively acknowledge that the Coastal GasLink pipeline has been a boondoggle in every possible way: an embarrassment to the industry [and] most of all an embarrassment to the province of B.C.”

— With files from Sarah Cox