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	<title>The Narwhal | News on Climate Change, Environmental Issues in Canada</title>
	<link>https://thenarwhal.ca</link>
  <description>The Narwhal’s team of investigative journalists dives deep to tell stories about the natural world in Canada you can’t find anywhere else.</description>
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  <copyright>Copyright 2026 The Narwhal News Society</copyright>
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		<title>The Narwhal | News on Climate Change, Environmental Issues in Canada</title>
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		<link>https://thenarwhal.ca</link>
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      <title>‘A limbo situation’: B.C. landowners owed more than half a million dollars after oil and gas company goes bankrupt</title>
      <link>https://thenarwhal.ca/a-limbo-situation-b-c-landowners-owed-more-than-half-a-million-dollars-after-oil-and-gas-company-goes-bankrupt/?utm_source=rss</link>
			<guid isPermaLink="false">https://thenarwhal.ca/?p=17344</guid>
			<pubDate>Wed, 18 Mar 2020 17:31:27 +0000</pubDate>			
			<description><![CDATA[Three dozen landowners in the Peace region are left with orphan oil and gas wells on their properties from bankrupt Calgary-based Ranch Energy — a problem that could worsen as more companies become insolvent due to the economic fallout from novel coronavirus COVID-19]]></description>
			<content:encoded><![CDATA[<figure><img width="1400" height="935" src="https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-1400x935.jpg" class="attachment-banner size-banner wp-post-image" alt="B.C. oil and gas infrastructure Garth Lenz" decoding="async" srcset="https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-1400x935.jpg 1400w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-800x534.jpg 800w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-1024x684.jpg 1024w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-768x513.jpg 768w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-1536x1025.jpg 1536w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-2048x1367.jpg 2048w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-450x300.jpg 450w, https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-20x13.jpg 20w" sizes="(max-width: 1400px) 100vw, 1400px" /><figcaption><small><em></em></small></figcaption></figure> <p>The first real sign of trouble came in July 2018, when Arthur and Laurel Hadland opened an envelope with news about Ranch Energy, a company that owned two inactive wells on <a href="https://www.secan.com/members/hadland-seed-farm-ltd" rel="noopener">the family&rsquo;s grain and seed farm</a> in northeast British Columbia.</p>
<p>&ldquo;I&rsquo;ve got it right here,&rdquo; Hadland says over the phone, &ldquo;Ranch Energy notice and statement of receiver.&rdquo;&nbsp;</p>
<p>He had heard Ranch Energy wasn&rsquo;t doing well &mdash; &ldquo;there were rumours &hellip; table talk,&rdquo; he says &mdash;&nbsp;but now the company was officially in receivership and rental payments to Hadland&rsquo;s 97-year-old father for surface leases had stopped.</p>
<p>The payments &mdash;&nbsp; $7,410 a year &mdash; helped cover Austin Hadland&rsquo;s room and board at a senior&rsquo;s home in Fort St. John.</p>
<p>&ldquo;He has modest savings. We had set that aside to let him live out his years,&rdquo; Arthur Hadland says in an interview. &ldquo;I have a full-time caregiver that looks after him. His eyesight is gone, he&rsquo;s blind &hellip; We&rsquo;re really eating into his savings right now. This would have helped a lot.&rdquo;&nbsp;</p>
<p>Hadland says his father, now 99, is mentally sharp and fully understands why he&rsquo;s no longer getting rent payments for the wells on his farmland.&nbsp;</p>
<p>&ldquo;He&rsquo;s fully conversant,&rdquo; Hadland says. &ldquo;He&rsquo;s just disgusted.&rdquo;&nbsp;</p>
<img src="https://thenarwhal.ca/wp-content/uploads/2020/03/Fracking-well-pad-BC-Garth-Lenz-The-Narwhal.jpg" alt="Oil and gas well site near Dawson Creek" width="1200" height="801"><p>Oil and gas well site near Dawson Creek, B.C. Photo: Garth Lenz / The Narwhal</p>
<h2>Surface rights board &lsquo;can&rsquo;t do a whole lot&rsquo;</h2>
<p>The Hadlands did what three dozen other Peace region landowners have done since Calgary-based Ranch Energy slipped into receivership, <a href="https://thenarwhal.ca/a-massive-liability-b-c-s-orphan-fracking-wells-set-to-double-this-year/">leaving 700 wells in B.C. and a large, leaking fracking pit </a>with contaminated wastewater.</p>
<p>They filed a complaint with the <a href="http://www.surfacerightsboard.bc.ca/default.aspx" rel="noopener">Surface Rights Board of B.C</a>., which deals with disputes between landowners and companies like Ranch that hold undersurface rights to oil, gas and minerals on private property.</p>
<p>&ldquo;Unfortunately, the board can&rsquo;t do a whole lot,&rdquo; surface rights board chair Cheryl Vickers tells The Narwhal. &ldquo;The board can make an order for payment, and if it is an operating well the board can suspend the right of entry.&rdquo;&nbsp;</p>
<p>&ldquo;But in the circumstances of Ranch, which is in receivership, the wells are not operating &hellip; so making an order to suspend the right of entry doesn&rsquo;t put any pressure on the company to actually pay.&rdquo;&nbsp;</p>
<p>&ldquo;On paper there&rsquo;s a process there to deal with the situation, but in reality it doesn&rsquo;t provide much or any relief to landowners in this interim kind of period.&rdquo;&nbsp;</p>
<p>As of February, Ranch Energy owed Austin Hadland $15,000 plus interest, according to orders from the surface rights board. By the end of next month, the company will owe Hadland another $9,600 &mdash;&nbsp;for a total of $24,600 plus interest.</p>
<p>To date, the board has ordered Ranch Energy to pay landowners a collective $520,000 plus interest, according to The Narwhal&rsquo;s review of 89<a href="https://decisions.surfacerightsboard.bc.ca/bcsrb/en/d/s/index.do?cont=Ranch+Energy&amp;ref=&amp;d1=&amp;d2=&amp;col=173&amp;or=" rel="noopener"> Ranch surface board orders.</a>&nbsp;</p>
<p>When almost two dozen surface board orders for Predator Oil BC Ltd., the company that sold Ranch the wells, are added in, landowners are owed an additional $87,000, according to board orders.&nbsp;</p>
<p>And those numbers are climbing all the time as rents come due on different dates and go unpaid.&nbsp;</p>
<blockquote><p><a href="https://thenarwhal.ca/b-c-left-holding-massive-bill-for-hundreds-of-orphan-gas-wells-as-frack-companies-go-belly-up/">B.C. left holding massive bill for hundreds of orphan gas wells as frack companies go belly-up</a></p></blockquote>
<p></p>
<h2>Rent from wells is &lsquo;missing out of our economy&rsquo;</h2>
<p>In December, landowners Les and Hannah Willms brought the issue of unpaid Ranch rents to the attention of Peace River Regional District director Karen Goodings.&nbsp;</p>
<p>As of June 7, 2018, Ranch owed the Willms more than $11,000 in unpaid rent, according to surface rights board orders. By this June, with no resolution, the Willms will be owed more than $33,000, plus interest.&nbsp;</p>
<p>Les Willms roughly calculated, in an email to Goodings, that $828,000 is &ldquo;missing out of our economy&rdquo; due to unpaid rent to landowners.</p>
<p>&ldquo;The orphan well fund should be making these payments before they get any further behind,&rdquo; Willms said. &ldquo;By next summer we will have a third year owed.&rdquo;&nbsp;</p>
<p>The orphan site reclamation fund, run by <a href="https://www.bcogc.ca" rel="noopener">B.C.&rsquo;s Oil and Gas Commission</a>, covers the cost of decommissioning and reclaiming oil and gas wells whose owners have gone bankrupt or can&rsquo;t be found.</p>
<p>There are 346 orphan wells in B.C. &mdash; compared to just 45 four years ago &mdash; according to the commission, which is <a href="https://thenarwhal.ca/a-massive-liability-b-c-s-orphan-fracking-wells-set-to-double-this-year/">struggling to pay for costly cleanups</a> that could ultimately be the responsibility of B.C. taxpayers.</p>
<p>In an email to The Narwhal, the commission said it has paid approximately $475,000 from the orphan fund to compensate landowners for unpaid rents.</p>
<p>But none of those payments went to landowners who are owed back rents from Ranch Energy, like the Willms and Hadlands.</p>
<p>Why? Because Ranch&rsquo;s wells have not been designated orphan sites.&nbsp;</p>
<blockquote><p><a href="https://thenarwhal.ca/a-massive-liability-b-c-s-orphan-fracking-wells-set-to-double-this-year/">&lsquo;A massive liability&rsquo;: B.C.&rsquo;s orphan fracking wells set to double this year</a></p></blockquote>
<p></p>
<h2>&lsquo;A limbo situation&rsquo; for landowners</h2>
<p>Orphan well designations can only be made once bankruptcy proceedings are complete, according to the oil and gas commission, which estimates that 300 to 400 of Ranch&rsquo;s wells will become orphans this year after others are sold by the company&rsquo;s receiver, adding to the pile of sites the province is already responsible for cleaning up.</p>
<p>&ldquo;It&rsquo;s a limbo situation for the landowners,&rdquo; Vickers says.&nbsp;</p>
<p>&ldquo;This receivership has been going on now for a couple of years. The orders are piling up. There&rsquo;s no ability for the landowners to get any kind of payment unless a well is sold and the new owner takes over and pays.&rdquo;</p>
<p>Even more landowners are likely to be affected if companies go bankrupt due to a recession caused by the COVID-19 pandemic, Vickers says.</p>
<p>&ldquo;I suspect there may be other companies that start to have financial difficulties and that are not paying their rent and then we will see more of these applications for unpaid rent,&rdquo; she says.</p>
<p>&ldquo;And we&rsquo;ll just be making more orders for payment that, depending on whether the companies are in receivership or not, are just a piece of paper that says people are owed money.&rdquo;</p>
<p>Goodings recommended the regional district send a &ldquo;strongly worded&rdquo; letter to the B.C. Oil and Gas Commission, requesting it review and consider any outstanding orders for unpaid surface right lease payments to property owners.&nbsp;</p>
<p>Then she received a letter from Paul Jeakins, the commissioner and CEO of the Oil and Gas Commission.&nbsp;</p>
<p>In his Jan. 13 letter, Jeakins told Goodings the commission cannot &ldquo;arbitrarily access&rdquo; the orphan site reclamation fund to make payments to landowners for surface rights board orders.</p>
<p>&ldquo; &hellip; The commission recognizes the challenges faced by some land owners and has been in regular contact with many of them,&rdquo; Jeakins wrote.</p>
<p>The commission reiterated to The Narwhal that it can only use the orphan site reclamation fund for unpaid rent, including an amount for past losses, &ldquo;after a site is designated as an orphan.&rdquo;</p>
<p>Jeakins told Goodings that &ldquo;there is an on-going bankruptcy proceeding [for Ranch Energy] that may conclude in early 2020 and it&rsquo;s believed that will provide for a near term resolution on this matter.&rdquo;&nbsp;</p>
<p>But that&rsquo;s cold comfort for the Hadlands and Goodings, who say there is not enough money in the orphan site reclamation fund to pay out the landowners and reclaim the idle well sites on their land in a timely fashion.</p>
<p>&ldquo;The funds to cover lack of lease payments and orphan wells will not be sufficient to do both,&rdquo; Goodings said in an email to The Narwhal. &ldquo;There may be a partial payment to the landowners.&rdquo;&nbsp;</p>
<p>The commission plans to reclaim 15 orphan well sites this year and 25 next year, according to its annual service plan. It&rsquo;s not known if any of them will be Ranch wells.</p>
<p>But with the commission anticipating a $36 million deficit this year in its orphan site reclamation fund, Arthur Hadland says he&rsquo;s not holding out much hope his father will receive the money owed to him any time soon.&nbsp;</p>
<p>&ldquo;I&rsquo;ve pretty well thrown up my hands,&rdquo; Hadland says. &ldquo;The thing is hopeless.&rdquo;&nbsp;</p>
<h2>Getting the rent payment order is the easy part</h2>
<p>Vickers says the process for getting an order from the surface rights board for unpaid rent is relatively fast and straightforward.</p>
<p>&ldquo;There&rsquo;s no big rigamarole,&rdquo; she says. &ldquo;It&rsquo;s just a question of filling out a form [and] sending us the documentation to support the amount of rent that&rsquo;s owed and when it&rsquo;s due.&rdquo;&nbsp;</p>
<p>The board then writes to Ranch&rsquo;s receivers, Ernst &amp; Young, who acknowledge the unpaid rents, Vickers says.&nbsp;</p>
<p>&ldquo;Then we just turn around and issue an order. That part&rsquo;s easy. Getting the payment is not easy. I know there&rsquo;s landowners struggling as a result and there&rsquo;s nothing we can really do to assist them.&rdquo;&nbsp;</p>
<p>Vickers said the board receives about one application for unpaid rent a week, &ldquo;sometimes two or three.&rdquo;&nbsp;</p>
<p>&ldquo;I&rsquo;m churning out these orders weekly and until either some of the well sites are sold, or they&rsquo;re declared orphan wells, that will continue.&rdquo;</p>
<p><em>Update Friday March 27 at 11:36 a.m. PST. This article was updated to add the phrase &ldquo;could ultimately be&rdquo; to this sentence: There are 346 orphan wells in B.C. &mdash; compared to just 45 four years ago &mdash; according to the commission, which is struggling to pay for costly clean-ups that could ultimately be the responsibility of B.C. taxpayers. The previous sentence was:&nbsp;There are 346 orphan wells in B.C. &mdash; compared to just 45 four years ago &mdash; according to the commission, which is struggling to pay for costly clean-ups that are ultimately the responsibility of B.C. taxpayers.</em></p>

<p><em><strong>The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by <a href="https://thenarwhal.ca/newsletter/?utm_source=rss">signing up for our free weekly dose of independent journalism</a>.</strong></em></p>]]></content:encoded>
      <dc:creator><![CDATA[Sarah Cox]]></dc:creator>
			<category domain="post_cat"><![CDATA[In-Depth]]></category>			<category domain="post_tag"><![CDATA[B.C. Oil and Gas Commission]]></category><category domain="post_tag"><![CDATA[coronavirus]]></category><category domain="post_tag"><![CDATA[fracking]]></category><category domain="post_tag"><![CDATA[LNG]]></category><category domain="post_tag"><![CDATA[orphan wells]]></category>			<media:content url="https://thenarwhal.ca/wp-content/uploads/2020/03/B.C.-oil-and-gas-infrastructure-Garth-Lenz-1400x935.jpg" fileSize="456161" type="image/jpeg" medium="image" width="1400" height="935"><media:credit></media:credit><media:description>B.C. oil and gas infrastructure Garth Lenz</media:description></media:content>	
    </item>
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      <title>Ten per cent of northeast B.C. oil and gas wells leak — more than double the reported rate in Alberta: new study</title>
      <link>https://thenarwhal.ca/ten-per-cent-of-northeast-b-c-oil-and-gas-wells-leak-more-than-double-the-reported-rate-in-alberta-new-study/?utm_source=rss</link>
			<guid isPermaLink="false">https://thenarwhal.ca/?p=17146</guid>
			<pubDate>Wed, 04 Mar 2020 20:29:42 +0000</pubDate>			
			<description><![CDATA[A survey of the province's database shows wellbores releasing 14,000 cubic metres of methane — a potent greenhouse gas — every single day amid weak regulations and inconsistent monitoring]]></description>
			<content:encoded><![CDATA[<figure><img width="1400" height="934" src="https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-1400x934.jpg" class="attachment-banner size-banner wp-post-image" alt="Gas well Farmington B.C." decoding="async" srcset="https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-1400x934.jpg 1400w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-800x534.jpg 800w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-1024x683.jpg 1024w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-768x512.jpg 768w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-1536x1025.jpg 1536w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-2048x1366.jpg 2048w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-450x300.jpg 450w, https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-20x13.jpg 20w" sizes="(max-width: 1400px) 100vw, 1400px" /><figcaption><small><em></em></small></figcaption></figure> <p>Northeastern British Columbia has been a major centre of conventional oil and gas production since the 1960s. More recently, the shale gas sector has also targeted the region.</p>
<p>One of the issues the oil and gas industry faces is the leakage of gases from wellbores &mdash; the holes drilled into the ground to look for or recover oil and natural gas. Methane leakage from wellbores has become an important issue because this greenhouse gas is far more potent than carbon dioxide.</p>
<p>My colleagues and I recently examined a <a href="https://doi.org/10.1073/pnas.1817929116" rel="noopener">database containing information about 21,525 active and abandoned wells</a> located in the four main shale gas formations of northeastern British Columbia: the Montney, Horn River, Liard and Cordova basins. This represents almost all of the conventional and shale gas wells existing in the region.</p>
<p>Our study was the first to examine the data contained in the British Columbia Oil and Gas Commission Wellbore (OCG) Leakage Database.</p>
<p>We found that almost 11 per cent of all oil and gas wells had a reported leak, together releasing 14,000 cubic metres of methane per day. This is more than double the leakage rate of <a href="https://doi.org/10.2118/106817-PA" rel="noopener">4.6 per cent in Alberta</a>, which may have less stringent testing and reporting requirements.</p>
<p>Our research in northeastern B.C. also found weak regulations on mandatory reporting, continued monitoring and the use of protective measures &mdash; oversights that represent risks for the environment.</p>
<img src="https://thenarwhal.ca/wp-content/uploads/2020/03/Shale-Gas-Plays-Northeast-B.C.-Map-The-Narwhal.jpg" alt="Shale Gas Plays Northeast B.C. Map The Narwhal" width="1944" height="1175"><p>A map showing the location of B.C.&rsquo;s main shale gas plays. Map: Carol Linnitt / The Narwhal</p>
<h2>Deficiencies in wellbore design, construction a concern</h2>
<p>Shale gas, principally methane, is exploited through the combined techniques of <a href="https://doi.org/10.1016/j.jenvman.2019.05.138" rel="noopener">horizontal drilling and multi-stage hydraulic fracturing (fracking)</a>. Shale gas fracking has increased as <a href="https://doi.org/10.1007/s12665-019-8740-z" rel="noopener">conventional gas reserves have declined after decades of exploitation</a>.</p>
<p>Northeastern B.C.&rsquo;s shale gas reserves are estimated to hold 10,000 billion cubic metres of methane, enough to supply worldwide consumption for almost three years.</p>
<p>All modern oil and gas wells are constructed in a wellbore, which typically traverses many geologic layers containing brines and hydrocarbons. Fracking involves the deep underground high-pressure injection of large volumes of water, sand and chemicals into the wellbore, to fracture the rock and release the natural gas, petroleum and brines. Pipes and sealants (usually cement) placed in the wellbore protect it against collapse and squeezing, and prevent fluids from moving between geologic layers.</p>
<p>But these structures are not always fail-safe. Deficiencies in the design or construction of the wellbore, or weakening of the pipe or sealant over time, can connect layers that would naturally remain geologically isolated. In a deficient well, the buoyancy of the underground gas causes the fluids to be pushed towards the surface through these connections.</p>
<p>Wellbore leakage can occur along actively producing wells or wells that have been permanently abandoned after their productive life is over.</p>
<p>The possibility of leakage from these wells has raised environmental concerns, especially since leaky wells are likely under-reported.</p>
<p>In addition to the release of greenhouse gases, which contribute to global warming and climate change, these leaking wells could contaminate groundwater and surface water with hydrocarbons, chemicals contained in fracking fluids and brines.</p>
<blockquote><p><a href="https://thenarwhal.ca/a-massive-liability-b-c-s-orphan-fracking-wells-set-to-double-this-year/">&lsquo;A massive liability&rsquo;: B.C.&rsquo;s orphan fracking wells set to double this year</a></p></blockquote>
<p></p>
<h2>Public health and environmental consequences of leaky wells</h2>
<p>There are three main consequences to public health and the environment from wellbore leakage:</p>
<ol>
<li>The <a href="https://doi.org/10.1073/pnas.1213871110" rel="noopener">contamination of aquifers and surface waters from gases, brines, liquid hydrocarbons and hydraulic fracturing fluids</a>.</li>
<li>The contribution to greenhouse gas emissions, especially from venting methane.</li>
<li>The <a href="https://doi.org/10.1073/pnas.1711472115" rel="noopener">explosion of methane accumulated in poorly ventilated areas</a>.</li>
</ol>
<p>According to the B.C. OGC database, leakage had occurred in 2,329 of 21,525 tested wells.</p>
<p>Altogether, these leaking wellbores are releasing greenhouse gases equivalent to 75,000 tonnes of carbon dioxide annually. This is roughly equivalent to the emissions from 17,000 passenger vehicles.</p>
<p>Unfortunately, there is no record of the frequency of testing for wellbore leakage in B.C., nor are there requirements to monitor deep aquifers near oil and gas wells for contamination.</p>
<p>Although current regulations stipulate that all incidences of leakage must be repaired prior to well abandonment, there is <a href="https://pdfs.semanticscholar.org/6969/20c798c6eb59601d95511ac050d0763a5c4c.pdf?_ga=2.163024186.766024652.1582818953-987867751.1582818953" rel="noopener">no monitoring program in place</a> for leakage after wells have been permanently plugged, buried and abandoned.</p>
<p>There is also the possibility that the venting gases will contain hydrogen sulphide gas, which is poisonous and deadly at high concentrations.</p>
<blockquote><p><a href="https://thenarwhal.ca/b-c-grants-1-2-billion-in-deep-well-subsidies-to-fracking-companies-in-two-years-new-report/">B.C. grants $1.2 billion in deep well subsidies to fracking companies in two years: new report</a></p></blockquote>
<p></p>
<h2>Leaks under-reported</h2>
<p>Only wells that show wellbore leakage must be reported to the B.C. OGC and included in the database. According to regulations, all wells drilled after 2010 should be tested after initial completion and all wells drilled after 1995 tested upon abandonment.</p>
<p>There is no monitoring program in place for the inspection of wells that have already been abandoned. These abandoned wells could leak for a long time before the leakage is detected and repaired. Recent studies have also <a href="https://doi.org/10.1073/pnas.1605913113" rel="noopener">documented methane emissions</a> from abandoned oil and gas wells in Pennsylvania.</p>
<p>Shale gas exploitation can have environmental impacts long after a well has been abandoned. Provinces should implement regulations that require monitoring wells after abandonment, reporting the results and applying corrective measures to stop leaks from abandoned wells.</p>
<p>To this day, very few field investigations have been carried out in B.C. to directly monitor the leakage from abandoned wells. One showed that <a href="https://davidsuzuki.org/wp-content/uploads/2018/01/investigating-fugitive-emissions-abandoned-suspended-active-oil-gas-wells-montney-basin-northeastern-british-columbia.pdf" rel="noopener">35 per cent of investigated abandoned wells</a> exhibit emissions of methane and hydrogen sulphide gas or a combination of both.</p>
<p>The discrepancy between the database reports and the field study &mdash; as well as recent observations that human-made <a href="https://doi.org/10.1038/s41586-020-1991-8" rel="noopener">methane emissions are underestimated</a> by 25 per cent to 40 per cent &mdash; suggests that wellbore leakages in B.C. may go unreported.</p>
<p>To improve health and environmental safety, active surveillance and monitoring are necessary.</p>
<p><a href="https://theconversation.com/profiles/romain-chesnaux-890589" rel="noopener">Romain Chesnaux</a>, Professor in environmental engineering (specializing in water resources), <em><a href="https://theconversation.com/institutions/universite-du-quebec-a-chicoutimi-uqac-3749" rel="noopener">Universit&eacute; du Qu&eacute;bec &agrave; Chicoutimi (UQAC).</a></em></p>
<p>This article is republished from <a href="http://theconversation.com" rel="noopener">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/a-tenth-of-active-and-abandoned-oil-and-gas-wells-in-northeastern-b-c-are-leaking-127921" rel="noopener">original article</a>.</p>
<blockquote><p><a href="https://thenarwhal.ca/grain-country-gas-land/">From grain country to gas land</a></p></blockquote>
<p></p>

<p><em><strong>The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by <a href="https://thenarwhal.ca/newsletter/?utm_source=rss">signing up for our free weekly dose of independent journalism</a>.</strong></em></p>]]></content:encoded>
      <dc:creator><![CDATA[Romain Chesnaux]]></dc:creator>
			<category domain="post_cat"><![CDATA[Opinion]]></category>			<category domain="post_tag"><![CDATA[B.C. Oil and Gas Commission]]></category><category domain="post_tag"><![CDATA[climate change]]></category><category domain="post_tag"><![CDATA[fracking]]></category>			<media:content url="https://thenarwhal.ca/wp-content/uploads/2020/03/©LENZ-lng-Blueberry-2018-5335-1400x934.jpg" fileSize="289416" type="image/jpeg" medium="image" width="1400" height="934"><media:credit></media:credit><media:description>Gas well Farmington B.C.</media:description></media:content>	
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      <title>‘A massive liability’: B.C.’s orphan fracking wells set to double this year</title>
      <link>https://thenarwhal.ca/a-massive-liability-b-c-s-orphan-fracking-wells-set-to-double-this-year/?utm_source=rss</link>
			<guid isPermaLink="false">https://thenarwhal.ca/?p=17099</guid>
			<pubDate>Fri, 28 Feb 2020 23:16:13 +0000</pubDate>			
			<description><![CDATA[Since 2016 the number of orphaned wells increased by a staggering 770 per cent. Now, as the tally grows, the province is left with contaminated sites, a leaking wastewater pond and an escalating cleanup bill estimated to be in the hundreds of millions]]></description>
			<content:encoded><![CDATA[<figure><img width="1400" height="932" src="https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-1400x932.jpg" class="attachment-banner size-banner wp-post-image" alt="Oil and Gas Development. Farmington Area." decoding="async" srcset="https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-1400x932.jpg 1400w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-800x532.jpg 800w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-1024x682.jpg 1024w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-768x511.jpg 768w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-1536x1022.jpg 1536w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-2048x1363.jpg 2048w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-450x300.jpg 450w, https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-20x13.jpg 20w" sizes="(max-width: 1400px) 100vw, 1400px" /><figcaption><small><em></em></small></figcaption></figure> <p>Success Energy, an oil and gas company headquartered in a two-storey stucco house in the Calgary neighbourhood of Ranchland, did not live up to the promise of its name.&nbsp;</p>
<p>The company failed last year, leaving behind three fracking wells in northeast B.C. One well had spilled hydrocarbons on the ground and in surface water, requiring immediate testing for toxic chemicals such as benzene and toluene and remediation of the impacted area.&nbsp;</p>
<p>Success Energy never carried out the mandatory testing and remediation work, outlined in one of <a href="https://www.bcogc.ca/industry-zone/compliance-enforcement/documents?name=Success&amp;field_enforcement_type_tid=All&amp;field_date_issued_value%5Bvalue%5D%5Bdate%5D=&amp;items_per_page=15" rel="noopener">four orders from B.C.&rsquo;s oil and gas commission</a> that it largely ignored. In one order, the company was also instructed to take action to stop methane, a highly potent greenhouse gas, from being released into the atmosphere at the same well, 50 kilometres west of Fort St. John.</p>
<p>The troublesome well, known in industry parlance as WA 04980, recently joined a lengthening list of B.C.&rsquo;s orphan wells &mdash; oil and gas wells whose owners are insolvent or can&rsquo;t be located.</p>
<p>There are 346 orphan wells in B.C. &mdash; compared to just 45 four years ago &mdash; according to the <a href="https://www.bcogc.ca" rel="noopener">B.C. Oil and Gas Commission</a>&rsquo;s annual service plan, released on Feb. 18 as part of the provincial budget. That&rsquo;s a 769 per cent increase.&nbsp;</p>
<p>And while B.C. orphan wells are a fraction of the burgeoning number of <a href="https://thenarwhal.ca/the-story-of-albertas-100-billion-well-liability-problem-how-did-we-get-here/">orphan wells in Alberta</a>, the list continues to grow, with the commission struggling to pay for costly cleanups that are ultimately the responsibility of B.C. taxpayers.</p>
<p>The number of orphan wells in B.C. is poised to double this year, after 300 to 400 wells that belonged to an insolvent company called Ranch Energy are added to the list, according to the service plan.&nbsp;</p>
<p>As northeast B.C. readies for a fracking boom to supply gas for the <a href="https://thenarwhal.ca/tag/lng-canada/">LNG Canada project</a> &mdash; gas that will travel from B.C.&rsquo;s Peace region to Kitimat along the contested <a href="https://thenarwhal.ca/tag/coastal-gaslink-pipeline/">Coastal GasLink pipeline</a> &mdash; the tally of orphan wells could soar.&nbsp;</p>
<p>&ldquo;It is pretty clear that in the current climate of uncertainty related to oil and gas development, the number of orphaned wells is just going to continue to grow,&rdquo; said John Werring, senior science and policy advisor with the David Suzuki Foundation.</p>
<p>&ldquo;We need to find a way, as soon as possible, to deal with this massive liability.&rdquo;</p>
<img src="https://thenarwhal.ca/wp-content/uploads/2018/10/%C2%A9LENZ-lng-Farmington-2018-5961-1920x1281.jpg" alt="Oil and Gas Development. Farmington Area." width="1920" height="1281"><p>With the approval of LNG Canada, there is expected to be an explosion of hydraulic fracturing operations in northeastern B.C., like this one near Farmington, B.C. Photo: Garth Lenz / The Narwhal</p>
<h2>B.C. stuck with $34 million in cleanup costs from Ranch Energy wells</h2>
<p>Ranch Energy, a Calgary-based company, went into receivership in 2018, <a href="https://thenarwhal.ca/b-c-left-holding-massive-bill-for-hundreds-of-orphan-gas-wells-as-frack-companies-go-belly-up/">leaving behind 700 wells, a sea of debt and a large leaking fracking pond</a> 400 kilometres north of Fort St. John.&nbsp;</p>
<p>Some of Ranch&rsquo;s assets will soon be transferred to Erikson Energy in a court-approved sale, the commission said in an emailed response to questions from The Narwhal. But the commission will be saddled with hundreds of wells Erikson does not wish to purchase.</p>
<p>Ranch left a $15.6 million security, the commission confirmed in an email.&nbsp;</p>
<p>But that pales in comparison to the $50 million liability the commission says will be associated with Ranch&rsquo;s orphan wells, leaving it stuck with a bill for more than $34 million for decommissioning and reclamation costs.</p>
<p>Last year, former B.C. Auditor General Carol Bellringer <a href="https://www.bcauditor.com/sites/default/files/publications/reports/OAGBC_Oil-Gas-Non-operating-Sites_RPT.pdf" rel="noopener">noted</a> the oil and gas commission&rsquo;s orphan site reclamation fund had a shortfall of $13.1 million and liabilities of $120 million for what, at the time, were 326 orphan wells.</p>
<p>This year, the situation is even worse. The fund&rsquo;s shortfall will jump almost threefold this year, to more than $36 million &mdash; news that shocked Werring.&nbsp;</p>
<p>&ldquo;Good Lord,&rdquo; he said. &ldquo;We have to build that fund up.&rdquo;&nbsp;</p>
<p>David Hughes, an earth scientist who has studied energy resources in Canada and the U.S. for more than four decades, said B.C.&rsquo;s 646 to 746 orphan wells (depending on the final tally of Ranch&rsquo;s orphan wells) could be &ldquo;the tip of the iceberg.&rdquo;&nbsp;</p>
<p>A commercial database shows B.C. had 11,976 inactive or suspended wells as of December, said Hughes, who spent 32 years with the Geological Survey of Canada as a scientist and research manager.</p>
<p>&ldquo;Why are they suspended?&rdquo; he asked. &ldquo;Why are they inactive? Some of those could potentially become candidates for orphan wells.&rdquo;</p>
<p>In North Dakota, unlike in B.C. and Alberta, Hughes said companies are obliged to cleanup wells that are inactive for more than a few months.</p>
<p>&ldquo;In Canada, wells can be inactive for a lot longer. If the financial health of the well operator is weak and sureties held by the government for cleanup are insufficient, some of those wells are likely to become a problem for the taxpayer.&rdquo;</p>
<blockquote><p><a href="https://thenarwhal.ca/b-c-left-holding-massive-bill-for-hundreds-of-orphan-gas-wells-as-frack-companies-go-belly-up/">B.C. left holding massive bill for hundreds of orphan gas wells as frack companies go belly-up</a></p></blockquote>
<p></p>
<h2>&lsquo;There&rsquo;s no way they&rsquo;re going to catch up&rsquo;</h2>
<p>Restoring oil and gas wells is a multi-year process. First, wells need to be decommissioned, or sealed with cement. Full reclamation involves cleaning up contamination and restoring the land to pre-activity conditions.&nbsp;</p>
<p>According to the auditor general&rsquo;s <a href="https://www.bcauditor.com/sites/default/files/publications/reports/OAGBC_Oil-Gas-Non-operating-Sites_RPT.pdf" rel="noopener">report</a>, it costs an average $370,000 to seal a well and restore a site.</p>
<p>At that price, the oil and gas commission would be responsible for more than $276 million in cleanup costs should 400 Ranch Energy sites be added to the current orphan well list.&nbsp;</p>
<p>But the commission has only budgeted $10.5 million for reclamation this year, $12 million next year, and $10 million and $9 million in each of the following years, according to its service plan.&nbsp;</p>
<p>&ldquo;Decommissioning an inactive well reduces the likelihood that oil, methane gas and saline water will move up through the well into freshwater aquifers, surface water, the ground or the atmosphere,&rdquo; Bellringer noted in her 54-page audit.&nbsp;</p>
<p>Werring, who trekked more than 10,000 kilometres in B.C. <a href="https://thenarwhal.ca/vigilante-scientist-trekked-over-10-000-kilometres-reveal-b-c-s-leaky-gas-wells/">to document fugitive methane emissions from gas wells</a>, said the provincial government needs to collect more money in securities from oil and gas companies before they are allowed to operate in B.C.&nbsp;</p>
<blockquote><p><a href="https://thenarwhal.ca/vigilante-scientist-trekked-over-10-000-kilometres-reveal-b-c-s-leaky-gas-wells/">This Vigilante Scientist Trekked Over 10,000 Kilometres to Reveal B.C.&rsquo;s Leaking Gas Wells</a></p></blockquote>
<p></p>
<p>&ldquo;They need to pay,&rdquo; he told The Narwhal. &ldquo;They&rsquo;re making money hand over fist on the resource that they are extracting. They&rsquo;re getting millions and millions of dollars in <a href="https://thenarwhal.ca/tag/oil-and-gas-subsidies/">subsidies from government</a>. So it&rsquo;s time to start putting that money back where it needs to go, in particular for orphan wells.&rdquo;</p>
<p>The oil and gas commission&rsquo;s stated goal is to cleanup and restore all orphan wells in B.C. within 10 years of their orphan designation, according to the service plan.&nbsp;</p>
<p>But the sheer number of orphan wells makes that impossible, Werring pointed out.&nbsp;</p>
<p>&ldquo;There&rsquo;s no way they&rsquo;re going to be able to catch up. Even if they did, say, 10 wells a year, you&rsquo;re looking at 30 years before they clean up 300 wells,&rdquo; he said. &ldquo;And 10 wells a year is quite ambitious in terms of the way things have been going.&rdquo;</p>
<p>Last year, according to the commission&rsquo;s service plan, four orphan wells were restored &mdash; as 10 new orphan wells were added to the list, three from Success Energy and seven from an insolvent company called Sun Oil.</p>
<p>This year, the commission states that 15 wells will be reclaimed. If achieved, that would be almost four times the current pace. Meanwhile, 300 to 400 new orphan wells from Ranch will be added to the orphan tally.</p>
<p>The commission says it aims to restore 25 wells two years from now.</p>
<p>At 35 wells a year &mdash; the commission&rsquo;s stated goal three years from now &mdash; only 350 wells would be restored after 10 years, even as new ones are added.&nbsp;</p>
<p>In its service plan, the oil and gas commission said expenses from the orphan site reclamation fund &ldquo;continue to impact the commission&rsquo;s ability to balance its budget.&rdquo;&nbsp;</p>
<p>And the situation is unlikely to improve.&nbsp;</p>
<p>A <a href="https://www.bcogc.ca/node/15838/download" rel="noopener">report</a> posted to the oil and gas commission&rsquo;s website on Feb. 12 says the outlook for the current fiscal year remains &ldquo;challenging,&rdquo; due to depressed gas prices that continue to affect permit holders.&nbsp;</p>
<p>The report said the commission is &ldquo;preparing for further financial impacts&rdquo; to the orphan well site reclamation fund from insolvent companies.</p>
<p>Asked if it has investigated the contamination at Success Energy&rsquo;s problem well, the oil and gas commission said it has taken action &ldquo;to safely shut in the equipment.&rdquo; Investigation and restoration work will be carried out by the orphan site reclamation fund, it said.</p>
<p>The commission also said it has lowered water levels in Ranch&rsquo;s wastewater storage pond, suspected of contaminating soil and groundwater through a leak in its outer lining.&nbsp;</p>
<p>&ldquo;This involved the removal, trucking, and safe disposal of 10,000 cubic metres of water,&rdquo; the commission said in an email.</p>
<p>The pond held 113,000 cubic metres of sludge and water, according to The Narwhal&rsquo;s review last year of <a href="https://documentcentre.eycan.com/Pages/Main.aspx?SID=1430" rel="noopener">Ranch&rsquo;s receivership documents</a>, meaning that the commission has trucked away less than one-tenth of the contaminated wastewater.</p>
<p>The commission said it spent $470,000 from Ranch&rsquo;s security deposit to remove and dispose of the fracking wastewater, noting that responsibility for ongoing management remains with Ranch&rsquo;s receiver. Following the upcoming court-approved sale of Ranch&rsquo;s assets, the commission said responsibility for the pond will transfer to the new owner.&nbsp;</p>
<img src="https://thenarwhal.ca/wp-content/uploads/2019/03/fracking-pond-B.C..jpg" alt="" width="4000" height="3000"><p>A frack water pond at a gas operation in B.C. Scientist John Werring told The Narwhal he suspects this pond is leaking but was not able to gain access to the site to test the water in the pond against the water that appeared to be leaking from it. Photo: John Werring</p>
<h2>Securities insufficient when companies go bankrupt</h2>
<p>In 2018, B.C.&rsquo;s NDP government enacted legislation to strengthen the commission&rsquo;s powers to restore well sites.&nbsp;</p>
<p>In an email, the commission said its comprehensive liability and management plan ensures the full cost of reclaiming oil and gas sites in B.C. will be covered by industry, with a new liability levy of $15 million kicking in the year after next, in addition to a projected $300,000 in security deposits and interest.</p>
<p>Werring said that will still fall far short of the funds needed to clean up orphaned sites.&nbsp;</p>
<p>&ldquo;There&rsquo;s not enough money coming in,&rdquo; he said.&nbsp;</p>
<p>Bellringer&rsquo;s audit, which examined how the oil and gas commission is managing the rising environmental and financial risks posed by orphan and inactive wells, pipelines and other fracking industry infrastructure, noted gaps between the deposits paid by other insolvent companies and the cost of cleaning up their orphan well sites.&nbsp;</p>
<p>One Calgary-based company, Terra Energy Corporation, had just under $1 million in security deposits but left a $55 million liability when it went bankrupt four years ago, saddling the oil and gas commission with 175 orphan wells.&nbsp;</p>
<p>Calgary-based Quattro Exploration and Production Ltd. left $75 million in liabilities when it went bankrupt in 2017. The company left zero in securities to cover the cost of restoring 75 orphan sites.&nbsp;</p>
<p>The federal Supreme Court <a href="https://thenarwhal.ca/what-the-redwater-ruling-means-for-albertas-thousands-of-inactive-oil-and-gas-wells/">Redwater ruling</a> &mdash; which found that insolvent or bankrupt companies must fulfill environmental obligations before paying back creditors &mdash; is only of limited assistance when it comes to cleaning up inactive wells and associated infrastructure, according to Ecojustice lawyer Barry Robinson, who has spent almost a decade working on issues related to inactive oil and gas wells.&nbsp;</p>
<p>&ldquo;The problem is that often by the time the company&rsquo;s gone bankrupt there are pretty empty shelves and there&rsquo;s not a lot of money in there,&rdquo; Robinson previously told The Narwhal.&nbsp;</p>
<p>&ldquo;Often, even if the environmental order comes first there&rsquo;s not enough money to meet it, to carry out the work.&rdquo;</p>
<blockquote><p><a href="https://thenarwhal.ca/what-the-redwater-ruling-means-for-albertas-thousands-of-inactive-oil-and-gas-wells/">What the Redwater ruling means for Alberta&rsquo;s thousands of inactive oil and gas wells</a></p></blockquote>
<p></p>
<h2>Estimated $3 billion to clean up inactive wells</h2>
<p><a href="https://www.bcauditor.com/sites/default/files/publications/reports/OAGBC_Oil-Gas-Non-operating-Sites_RPT.pdf" rel="noopener">Bellringer&rsquo;s audit</a> also zeroed in on clean-up costs for B.C.&rsquo;s inactive oil and gas sites that are not considered to be orphan sites. Inactive sites are wells that are no longer producing any oil or gas, but that haven&rsquo;t been properly sealed. In May 2018, there were almost 10,700 such sites, according to the audit.&nbsp;</p>
<p>Bellringer found the oil and gas commission had not secured enough money from companies to cover an estimated $3 billion in cleanup costs for the inactive wells.&nbsp;</p>
<p>&ldquo;While the upstream oil and gas industry is an important component of B.C.&rsquo;s economy, it introduces environmental risks that result in financial liability,&rdquo; Bellringer&rsquo;s report noted.&nbsp;</p>
<p>&ldquo;Potential contamination from oil and gas activities can affect ground and surface water quality, air quality, human health, wildlife and livestock &hellip; If operators do not restore their inactive sites in a timely manner, environmental risk and resulting financial liability will remain.&rdquo;&nbsp;</p>
<p>Werring pointed out that fracked wells have a much shorter lifespan than conventional wells, which might be plumbed for 20 years. Fracking, or hydraulic fracturing, involves the injection of large amounts of water and proprietary chemicals into the ground to release gas or oil trapped in rock formations deep below the surface.&nbsp;</p>
<p>&ldquo;Once you&rsquo;ve fracked a well you might only get gas production out of it for six months or three years,&rdquo; he said.&nbsp;</p>
<p>&ldquo;The biggest problem with the fracking boom is the sheer number of wells that will be lying dormant &hellip; A lot of those wells actually belong to companies that are entirely solvent and they&rsquo;re not even going back in there and restoring those wells,&rdquo; Werring said.</p>
<p>&ldquo;I think there&rsquo;s a real problem in communicating the true impact of this industry &hellip; yes, companies will go insolvent and, yes, there will be wells that will need to be put to bed but they&rsquo;re a mere drop in the bucket compared to the sheer number of wells that are already out there that require attention.&rdquo;</p>
<p>Restoring orphan and inactive wells would be a huge job-creation project if money were available, Werring said.</p>
<p>&ldquo;There&rsquo;s only two sources for that money. One is from the oil and gas companies&nbsp;themselves and the other is from the taxpayers,&rdquo; he said.</p>
<p>&ldquo;The way things are going right now all the liability is falling on the taxpayers.&rdquo;</p>

<p><em><strong>The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by <a href="https://thenarwhal.ca/newsletter/?utm_source=rss">signing up for our free weekly dose of independent journalism</a>.</strong></em></p>]]></content:encoded>
      <dc:creator><![CDATA[Sarah Cox]]></dc:creator>
			<category domain="post_cat"><![CDATA[News]]></category>			<category domain="post_tag"><![CDATA[B.C. Oil and Gas Commission]]></category><category domain="post_tag"><![CDATA[fracking]]></category><category domain="post_tag"><![CDATA[orphan wells]]></category>			<media:content url="https://thenarwhal.ca/wp-content/uploads/2020/02/©LENZ-lng-Farmington-2018-7210-1400x932.jpg" fileSize="315737" type="image/jpeg" medium="image" width="1400" height="932"><media:credit></media:credit><media:description>Oil and Gas Development. Farmington Area.</media:description></media:content>	
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      <title>B.C. left holding massive bill for hundreds of orphan gas wells as frack companies go belly-up</title>
      <link>https://thenarwhal.ca/b-c-left-holding-massive-bill-for-hundreds-of-orphan-gas-wells-as-frack-companies-go-belly-up/?utm_source=rss</link>
			<guid isPermaLink="false">https://thenarwhal.ca/?p=10381</guid>
			<pubDate>Wed, 13 Mar 2019 00:23:42 +0000</pubDate>			
			<description><![CDATA[On the cusp of a major fracking boom, B.C.’s Oil and Gas Commission is already struggling to keep up with the ballooning cost of cleaning up inactive and, at times, contaminated sites that have grown by 48 per cent in the last two years]]></description>
			<content:encoded><![CDATA[<figure><img width="1400" height="932" src="https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-1400x932.jpg" class="attachment-banner size-banner wp-post-image" alt="Fracking Farmington B.C." decoding="async" srcset="https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-1400x932.jpg 1400w, https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-760x506.jpg 760w, https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-1024x682.jpg 1024w, https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-1920x1278.jpg 1920w, https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-450x300.jpg 450w, https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-20x13.jpg 20w" sizes="(max-width: 1400px) 100vw, 1400px" /><figcaption><small><em></em></small></figcaption></figure> <p>Nearly 400 kilometres north of Fort St. John is a large, leaking <a href="https://thenarwhal.ca/what-is-fracking-in-canada/">fracking</a> pond owned by Ranch Energy Corporation, a Calgary-based company that went into receivership last year leaving 700 gas wells in B.C. and a sea of debt.</p>
<p>The storage pond is filled with 113,000 cubic metres of sludge and water that may be contaminating soil and groundwater through a documented leak in its outer lining, according to the B.C. Oil and Gas Commission.</p>
<p>Twenty months ago, the commission issued an <a href="https://www.bcogc.ca/node/14396/download" rel="noopener">order</a> to Predator Oil BC Ltd., the company that sold Ranch the wells, to empty the pond and test for contamination. </p>
<p>But nothing has been done. Ranch&rsquo;s receiver, Ernst &amp; Young, says it&rsquo;s an expense the estate cannot afford. </p>
<p>The story of Ranch &mdash; pieced together by The Narwhal from a review of receivership documents and B.C. Oil and Gas Commission documents &mdash; highlights some of the mounting financial and environmental problems created by B.C.&rsquo;s fracking industry. </p>
<p>And that&rsquo;s even before a fracking blitz gets underway in the province&rsquo;s Peace region, already covered by thousands of wells, to supply gas for the $40 billion <a href="https://thenarwhal.ca/tag/lng-canada/">LNG Canada</a> project that will ship liquefied natural gas overseas.</p>
<p><a href="https://thenarwhal.ca/topics/fracking/">Fracking</a>, or hydraulic fracturing, involves the injection of large amounts of water and proprietary chemicals into the ground to release gas. </p>
<h2>Three oil and gas companies went belly-up last year</h2>
<p>When companies like Ranch become insolvent, the provincial government is left holding much of the substantial clean-up bill for the industry equivalent of a dine and dash. </p>
<p>Ranch was just one of three companies operating in B.C. that went belly-up last year, leaving a forecast $12.3 million deficit in the B.C. Oil and Gas Commission&rsquo;s orphan site reclamation fund, according to the commission&rsquo;s annual <a href="https://www.bcogc.ca/node/15357/download" rel="noopener">service plan</a>.</p>
<p>Demands on the reclamation fund will &ldquo;continue to impact the Commission&rsquo;s ability to balance its budget,&rdquo; the plan states. </p>
<p>It notes that 300 to 500 Ranch wells could still be designated as orphans, leaving the commission responsible for additional clean-up costs it estimates at $40 million to $90 million &mdash; but with less than $14 million budgeted for the orphan fund over the next year.</p>
<p>&ldquo;Given the uncertainty about the timing of these orphan designations, there is no provision built into the financial plan,&rdquo; the commission duly noted.</p>
<p>Ranch also owes $1.88 million to the B.C. ministry of finance, $478,000 to the B.C. Transportation Financing Authority, $93,000 to BC Hydro, $7,500 in carbon taxes, and almost $500,000 more to the government for various unpaid bills, receivership documents show. (B.C.&rsquo;s finance ministry said it could not disclose the nature of the outstanding bills due to privacy concerns.)</p>
<blockquote><p><a href="https://thenarwhal.ca/what-the-redwater-ruling-means-for-albertas-thousands-of-inactive-oil-and-gas-wells/">What the Redwater ruling means for Alberta&rsquo;s thousands of inactive oil and gas wells</a></p></blockquote>
<p></p>
<h2>Redwater ruling only helpful in certain circumstances</h2>
<p>Ecojustice lawyer Barry Robinson told The Narwhal that the recent federal Supreme Court <a href="https://thenarwhal.ca/tag/redwater/">Redwater</a> ruling &mdash; which found that insolvent or bankrupt companies must fulfil environmental obligations before paying back creditors &mdash; is only of limited assistance when it comes to cleaning up inactive wells and associated infrastructure such as Ranch&rsquo;s fracking pond. </p>
<p>&ldquo;This doesn&rsquo;t resolve the problem,&rdquo; said Robinson, who has spent almost a decade working on issues related to inactive oil and gas wells. &ldquo;This doesn&rsquo;t let the provinces wash their hands and say &lsquo;well, it&rsquo;s all good now.&rsquo; &rdquo; </p>
<p>&ldquo;The problem is that often by the time the company&rsquo;s gone bankrupt there are pretty empty shelves and there&rsquo;s not a lot of money in there,&rdquo; said Robinson.</p>
<p>&ldquo;Often, even if the environmental order comes first there&rsquo;s not enough money to meet it, to carry out the work.&rdquo; </p>
<p>John Werring, a senior scientist and policy analyst with the David Suzuki Foundation who <a href="https://thenarwhal.ca/vigilante-scientist-trekked-over-10-000-kilometres-reveal-b-c-s-leaky-gas-wells/">trekked </a>more than 10,000 kilometres in B.C. to document fugitive methane emissions from gas wells, said potential contamination of groundwater and impacts on wildlife and vegetation are some of the main concerns associated with leaking fracking ponds.</p>
<p>He pointed to his field work in the Montney formation in B.C.&rsquo;s Peace region, one of the largest shale gas resources in the world, where he saw other fracking ponds that appeared to be leaking. </p>
<p>&ldquo;In particular, animals like moose and caribou are attracted to what they call mineral licks. They would be around these areas where we saw leaks,&rdquo; Werring said. </p>
<p>&ldquo;The smell was terrible. We took samples of the water and found there were high volatile organic compounds. Downstream of the slope where these ponds were leaking all the vegetation was dead.&rdquo;</p>
<p>Werring pointed out there is &ldquo;absolutely no information&rdquo; on the effects of leaking frackwater ponds on groundwater.</p>
<blockquote><p><a href="https://thenarwhal.ca/vigilante-scientist-trekked-over-10-000-kilometres-reveal-b-c-s-leaky-gas-wells/">This Vigilante Scientist Trekked Over 10,000 Kilometres to Reveal B.C.&rsquo;s Leaking Gas Wells</a></p></blockquote>
<p></p>
<h2>Oil and gas commission left in a pickle when companies become insolvent </h2>
<p>The paper trail for the leaking storage pond offers a revealing glimpse of some of the issues faced by B.C.&rsquo;s oil and gas commission as it struggles to pay for massive clean-up costs related to the fracking industry and deal with urgent safety and environmental issues left behind by insolvent companies.</p>
<p>According to Ranch&rsquo;s <a href="https://documentcentre.eycan.com/Pages/Main.aspx?SID=1430" rel="noopener">receivership documents</a>, Ernst &amp; Young spent $580,000 last year to fix 23 &ldquo;regulatory deficiencies&rdquo; and issues of non-compliance in B.C. </p>
<p>Those included what the receiver described as a &ldquo;major environmental and safety issue&rdquo; related to a leak of an undisclosed substance from a pressure safety valve and spool piece on a cooler, the subject of an apparent July 30, 2018 <a href="https://www.bcogc.ca/node/15086/download" rel="noopener">order</a> issued by the oil and gas commission. </p>
<p>&ldquo;The issue was significant and needed to be addressed immediately,&rdquo; documents from the receiver note.</p>
<p>Ernst &amp; Young committed a further $270,000 to &ldquo;rectify regulatory deficiencies,&rdquo; most of which it said arose prior to Ranch&rsquo;s insolvency in July 2017.</p>
<p>But the receiver balked at picking up the unknown tab to comply with the oil and gas commission&rsquo;s order to remedy the leaking fracking pond, declining a suggestion from the commission that it cover the cost of trucking out contaminated liquids from the fracking storage pond.</p>
<p>It determined that &ldquo;the cost to do so would be significant and constitutes an expense that the estate cannot afford.&rdquo; </p>
<p>The commission&rsquo;s order to deal with the fracking pond was issued on July 14, 2017, when the regulatory agency noted the pond&rsquo;s outer liner was leaking and leaked liquid was being pumped back in. </p>
<p>&ldquo;Emptying all materials from the Site will facilitate inspection of the leak for contamination of soils and the environment,&rdquo; said the order, issued to Predator.</p>
<p>The commission ordered the removal of &ldquo;all the liquid, sludge and waste residue from the frac water storage site,&rdquo; to be disposed of at approved facilities, giving until October 31 of that year to comply. </p>
<p>The commission also ordered the company to submit an environmental site investigation report by August 2018 &ldquo;to determine the presence and extent of potential contamination in the soil and groundwater at the Site.&rdquo; </p>
<p>The company was given a further six weeks to &ldquo;ensure that any contaminated soils, if present at the Site, are removed or otherwise remediated&hellip;&rdquo;</p>
<a href="https://thenarwhal.ca/wp-content/uploads/2019/03/fracking-pond-B.C..jpg"><img src="https://thenarwhal.ca/wp-content/uploads/2019/03/fracking-pond-B.C..jpg" alt="" width="4000" height="3000"></a><p>A frack water pond at an unspecified gas operation in B.C. Scientist John Werring told The Narwhal he suspects this pond is leaking but was not able to gain access to the site to test the water in the pond against what appeared to be leaking wastewater. Photo: John Werring</p>
<a href="https://thenarwhal.ca/wp-content/uploads/2019/03/Leaking-fracking-pond-water-e1552436046511.jpg"><img src="https://thenarwhal.ca/wp-content/uploads/2019/03/Leaking-fracking-pond-water-e1552436046511.jpg" alt="Suspected leaking fracking pond water" width="1200" height="900"></a><p>Werring travelled across B.C. documenting oil and gas sites. He told The Narwhal there is virtually no research done in B.C. on the impacts of leaking frack water ponds on groundwater. Photo: John Werring</p>
<a href="https://thenarwhal.ca/wp-content/uploads/2019/03/leaking-fracking-pond-B.C.-e1552436079655.jpg"><img src="https://thenarwhal.ca/wp-content/uploads/2019/03/leaking-fracking-pond-B.C.-e1552436079655.jpg" alt="suspected leaking fracking pond B.C." width="1200" height="900"></a><p>Werring said he documented sites downslope from leaking fracking wastewater ponds where all vegetation was dead. Photo: John Werring</p>
<h2></h2>
<p>&nbsp;</p>
<h2>Commission asks receivers to clean up leaking pond</h2>
<p>To complicate matters, Predator holds the permits for the Ranch well sites because Ranch was not qualified to hold the permits under B.C.&rsquo;s regulatory regime. And given Ranch&rsquo;s insolvency, &ldquo;there is no real likelihood of the permits ever being transferred from Predator BC to Ranch,&rdquo; according to an October report from Ernst &amp; Young. </p>
<p>So Predator is still listed on the B.C. Oil and Gas Commission&rsquo;s website as the permit holder for Ranch operations, including for the leaking fracking pond.</p>
<p>The Oil and Gas Commission did not answer a question from The Narwhal, sent last Friday, asking if all <a href="https://www.bcogc.ca/industry-zone/compliance-enforcement/documents?name=Predator&amp;field_enforcement_type_tid=All&amp;field_date_issued_value%5Bvalue%5D%5Bdate%5D=&amp;items_per_page=15" rel="noopener">nine orders</a> to Predator listed on the commission&rsquo;s website, including orders related to safety issues, refer to wells and infrastructure that were owned by Ranch. </p>
<p>On September 27, 2018, the oil and gas commission asked Ernst &amp; Young to implement plans to address problems at the fracking pond, giving the receiver only two weeks to respond, according to receivership documents. </p>
<p>Ernst &amp; Young advanced a proposal to deal with the frack pond issues in what it called &ldquo;an economically feasible manner, given constraints associated with winter conditions.&rdquo; </p>
<p>The commission then suggested &ldquo;that the Receiver should truck the liquids out of the Frac Pond&hellip;&rdquo; </p>
<p>At that point, Ernst &amp; Young replied that while the estate could not afford that expense it was willing to continue working with the oil and gas commission to address the issue. </p>
<h2>&lsquo;Who&rsquo;s going to pay for all of this?&rsquo;</h2>
<p>The B.C. Oil and Gas Commission declined a request from The Narwhal for an interview, asking for questions to be emailed. </p>
<p>In response to those questions, the commission said the Redwater ruling gives it and other regulators &ldquo;another tool to ensure companies are held responsible for cleaning up and restoring their sites.&rdquo;</p>
<p>But B.C. budget and Ranch receivership documents suggest the deficit in the orphan site reclamation fund could climb much higher, further impeding the commission&rsquo;s ability to balance its budget, if Ranch wells are designated as orphans or other companies become insolvent. </p>
<p>Orphan wells are designated by B.C.&rsquo;s oil and gas commission when a permittee or former permit holder cannot be identified or is insolvent. </p>
<p>&ldquo;Suddenly there is no viable entity that has responsibility for that well,&rdquo; Werring explained. </p>
<p>An abandoned fracked gas well, on the other hand, is owned by a company that holds the lease to the land and has pumped out all the gas.</p>
<p>&ldquo;When the well is finished pumping and there&rsquo;s nothing left to come out of it, and the company wants to close that well, there&rsquo;s a procedure called abandonment where they have to go out and remove all the surface infrastructure,&rdquo; Werring said. </p>
<p>&ldquo;They cut the well head off, they fill the well with cement, they cap it and they bury it a metre underground and then they scarify all the earth around it and then replant it to make it come back to a semi-natural state.&rdquo;</p>
<p>Werring&rsquo;s research showed that less than six per cent of all abandoned wells in B.C. are on sites that have been reclaimed and replanted.</p>
<p>&ldquo;Most of the wells that are abandoned still have infrastructure on site &mdash; well heads, buildings, things like that that need to be dealt with,&rdquo; Werring said. &ldquo;There are a lot of these wells out there that are not properly abandoned. So there&rsquo;s a huge liability there that now falls on the Crown.&rdquo; </p>
<p>&ldquo;A lot of these wells are dangerous. They could deteriorate, fall apart, cause major environmental problems. Unless somebody fixes them it could be an ongoing liability not just from a financial perspective but from an environmental perspective. The question comes down to, &lsquo;Who&rsquo;s going to pay for all of this?&rsquo; &ldquo;</p>
<h2>B.C. orphan well sites increase by 48 per cent in last two years</h2>
<p>According to an affidavit from James O&rsquo;Hanley, the oil and gas commission&rsquo;s vice-president of applications, filed as part of Ranch&rsquo;s receivership proceedings, B.C. has 326 designated orphan well sites, of which 310 require further restoration. </p>
<p>That number has climbed from March 2017, when there were just 220 designated orphan sites, according to the B.C. Oil and Gas Commission&rsquo;s service plan. &nbsp;</p>
<p>Restoration costs vary from site to site but the average cost to abandon and reclaim a site is approximately $370,000, Hanley said in his affidavit.</p>
<p>At that price, it would cost $114.7 million to reclaim the 310 well sites already designated as orphans. </p>
<p>But only $13.9 million has been earmarked for the next fiscal year to carry out decommissioning and restoration activities on orphan sites, according to the oil and gas commission&rsquo;s budget documents.</p>
<p>And Ranch&rsquo;s 300 to 500 potential orphan wells are not included in the designated orphan sites because the commission is waiting to see how many of the company&rsquo;s 700 B.C. wells will be sold by the receiver, the commission said. </p>
<p>At the average clean-up cost cited by Hanley, Ranch&rsquo;s potential orphan sites could add another $111 million to $185 million to reclamation costs &mdash; considerably higher than the figure cited by the commission in its service plan.</p>
<p>&ldquo;The orphan well fund is a drop in the bucket compared to the liability out there and what needs to be fixed,&rdquo; Werring pointed out. </p>
<h2>Pace of orphan site restorations very slow </h2>
<p>The oil and gas commission&rsquo;s service plan also reveals the glacial pace of orphan site restorations in B.C. even as the number of sites rapidly increases. </p>
<p>In 2017-18, the commission restored six orphan well sites. In 2018-19, it forecasts that it will restore just three, noting that other sites have work underway. </p>
<p>The number of certified restorations is expected to increase over the next few years, with a target of 25 sites restored in 2021-22.</p>
<p>The oil and gas commission confirmed in an email that there have been no designations of orphan wells due to Ranch&rsquo;s insolvency as of yet, because the company&rsquo;s receiver has &ldquo;undertaken a process to facilitate sales of Ranch&rsquo;s assets.&rdquo;</p>
<p>&ldquo;The Commission will continue to regulate all assets owned by the company and take steps as required to protect public safety and the environment,&rdquo; it said. </p>
<p>The commission also pointed out that it is changing how funds are collected for the orphan site reclamation fund. In the past, the commission has collected funds from industry permit holders for the orphan fund to deal with the costs of abandonment, remediation and reclamation of sites. </p>
<p>The system differs from Alberta&rsquo;s, where those costs are managed by the Orphan Well Association, not by the province&rsquo;s oil and gas regulator.</p>
<p>&ldquo;We are continuing our work to enhance our comprehensive liability management plan to address ongoing environmental and financial liabilities associated with oil and gas sites, including the timely restoration of orphan oil and gas sites in B.C.,&rdquo; the commission said in an email.</p>
<p>Starting this spring, the orphan tax will be eliminated and replaced by a new liability levy that will be phased in over three years.</p>
<p>The levy will provide &ldquo;the entire estimated $15 million per year required to sustain the orphan fund&rdquo; by 2021-22, the commission said. </p>
<p>But Werring said the liability levy won&rsquo;t fix the problem any more than the orphan fund did, due to the sheer volume of the wells that needs to be managed. </p>
<p>&ldquo;It&rsquo;s a massive liability all around, it doesn&rsquo;t matter how you look at it,&rdquo; he said. &ldquo;Somebody at the end has to pay for this.&rdquo; </p>
<h2>Fracking pond order still outstanding</h2>
<p>There is no record that the fracking pond leak has been stopped or the site assessed for soil and groundwater contamination and remediated.</p>
<p>Asked if the order regarding the leaking fracking pond has been followed, the oil and gas commission responded only that it is engaged in the receivership proceedings of Ranch Energy and that a sales process &mdash; which will result in some assets being purchased by another party &mdash; is not complete. </p>
<p>&ldquo;The Commission will continue to review any potential sale to ensure attention is given to the obligations for the assets, as well as minimize risk to public safety, the environment, and orphan fund,&rdquo; it wrote.</p>
<p>&ldquo;This includes existing obligations for the storage of frac waters. The Commission continues to monitor conditions on the ground to ensure the protection of public safety and the environment.&rdquo;</p>
<p>Asked about estimated clean-up costs for Ranch&rsquo;s fracking pond, the commission said the bill for decommissioning the storage pond will vary &ldquo;depending on the method used to dispose of waters.&rdquo;</p>
<p>&ldquo;If the Commission is required to take action to complete any works, including actions on any of the assets to protect public safety and the environment, cost estimates will be gathered and reviewed prior to executing any required works.&rdquo;</p>
<p>Werring pointed out that inactive oil and gas wells and fracking storage ponds operate on Crown land, with permits from the province. </p>
<p>&ldquo;Somebody went bankrupt and there&rsquo;s an environmental liability out there. Who&rsquo;s going to pay for it? In the end it will probably be the taxpayers.&rdquo; </p>

<p><em><strong>The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by <a href="https://thenarwhal.ca/newsletter/?utm_source=rss">signing up for our free weekly dose of independent journalism</a>.</strong></em></p>]]></content:encoded>
      <dc:creator><![CDATA[Sarah Cox]]></dc:creator>
			<category domain="post_cat"><![CDATA[In-Depth]]></category>			<category domain="post_tag"><![CDATA[B.C. Oil and Gas Commission]]></category><category domain="post_tag"><![CDATA[fracking]]></category><category domain="post_tag"><![CDATA[orphaned wells]]></category>			<media:content url="https://thenarwhal.ca/wp-content/uploads/2019/03/©LENZ-lng-Farmington-2018-7290-1400x932.jpg" fileSize="268488" type="image/jpeg" medium="image" width="1400" height="932"><media:credit></media:credit><media:description>Fracking Farmington B.C.</media:description></media:content>	
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	    <item>
      <title>B.C. Government Suppressed Details About Potentially Dangerous, Unregulated Fracking Dams</title>
      <link>https://thenarwhal.ca/b-c-government-suppressed-details-about-potentially-dangerous-unregulated-fracking-dams/?utm_source=rss</link>
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			<pubDate>Fri, 30 Mar 2018 17:48:21 +0000</pubDate>			
			<description><![CDATA[Early last spring, provincial civil servants cut off virtually all communication about what the government knew about a sprawling network of potentially dangerous and unregulated dams in northeast B.C. on the pretext they could not comment because of the impending election. The coordinated effort meant there was virtually no comment until months after voting day...]]></description>
			<content:encoded><![CDATA[<figure><img width="1400" height="647" src="https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-1400x647.jpg" class="attachment-banner size-banner wp-post-image" alt="" decoding="async" srcset="https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-1400x647.jpg 1400w, https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-760x351.jpg 760w, https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-1024x473.jpg 1024w, https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-450x208.jpg 450w, https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-20x9.jpg 20w, https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1.jpg 1440w" sizes="(max-width: 1400px) 100vw, 1400px" /><figcaption><small><em></em></small></figcaption></figure> 
<p>Early last spring, provincial civil servants cut off virtually all communication about what the government knew about a sprawling network of<a href="https://thenarwhal.ca/2017/05/03/dam-big-problem-fracking-companies-build-dozens-unauthorized-dams-b-c-s-northeast"> potentially dangerous and unregulated dams</a> in northeast B.C. on the pretext they could not comment because of the impending election.</p>
<p>The coordinated effort meant there was virtually no comment until months after voting day from front-line agencies on how 92 unlicensed dams were built on the then BC Liberal government&rsquo;s watch.</p>
<p>Details about muzzling government communication on the dams &mdash; which were built to trap freshwater used in natural gas industry fracking operations &mdash; are contained in some of the 8,000 pages of documents released by B.C.&rsquo;s Oil and Gas Commission (OGC) in response to Freedom of Information (FOI) requests by the Canadian Centre for Policy Alternatives (CCPA), which was the first to report on the dams early last May.</p>
<p><!--break--></p>
<p>The initial CCPA report, published one week before the election and widely covered by media outlets, exposed how fossil fuel companies had built <a href="https://thenarwhal.ca/2017/05/03/dam-big-problem-fracking-companies-build-dozens-unauthorized-dams-b-c-s-northeast">&ldquo;dozens&rdquo; of unlicensed fracking dams</a>.</p>
<p>The FOI documents include internal emails between senior OGC staff and the Ministry of Natural Gas Development, in which the two organizations agree to refuse to release information on the dams on the grounds that doing so would violate rules on managing government records during the &ldquo;interregnum&rdquo; (the time between governments).</p>
<p>But this assertion is flatly rejected by an expert on privacy policy.</p>
<p>&ldquo;Guidelines on &lsquo;<a href="https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/services-policies-for-government/information-management-technology/records-management/managing-records-during-an-election-2017.pdf" rel="noopener">managing records during an election</a>&rsquo; cannot trump the law,&rdquo; said Colin Bennett, a University of Victoria political scientist.&nbsp;&ldquo;If there is a public interest in disclosure, then the election period is irrelevant.&rdquo;</p>
<p>Bennett added that B.C.&rsquo;s <em>Freedom of Information and Privacy Act</em> clearly states that government officials should proactively release information that is in the public interest without delay. That did not happen in this case.</p>
<p>Not only did it not happen, but the OGC insisted on formal FOI requests being filed to obtain the information. By doing so, the Commission &mdash; with the full knowledge of the Ministry of Natural Gas Development &mdash; ensured that documents on the troubling dams would not be released until long after the election.</p>
<p>The suppressed information included documents about unlicensed dams built by Progress Energy, a subsidiary of the giant Malaysian state-owned company Petronas. At the time of last spring&rsquo;s election, Petronas was still weighing whether or not to invest in a proposed liquefied natural gas plant at the mouth of the Skeen River near Prince Rupert.</p>
<p>The project was enthusiastically backed by then-Premier Christy Clark and Minister of Natural Gas Development, Rich Coleman. The premier went so far as to call opponents of the project &ldquo;<a href="http://www.cbc.ca/news/canada/british-columbia/b-c-premier-christy-clark-strikes-back-at-lng-opponents-1.3419993" rel="noopener">the forces of no</a>.&rdquo;</p>
<h2><strong>Averting a potential disaster</strong></h2>
<p>Early in our investigation, the CCPA learned that at least one unauthorized Progress Energy dam was so poorly built that the OGC had <a href="https://thenarwhal.ca/2017/11/10/fracking-company-ordered-drain-two-unauthorized-dams-b-c-s-northeast">quietly ordered</a> the company in spring 2016 to dewater the dam&rsquo;s reservoir in order to avert a potential disaster. (A gas compressor station was downhill of the dam.)</p>
<p>The OGC even posted a very short summary of the order on one of its webpages, a low-key public acknowledgement that a more comprehensive document existed. The CCPA&rsquo;s request for a copy of the full order was initially denied.</p>
<p>An April 18, 2017 email exchange between the OGC&rsquo;s executive director of corporate affairs, Graham Currie, and the Ministry of Natural Gas Development&rsquo;s communications director, Paul Woolley, refers to the full order and related documents as materials that both organizations agree not to release or to answer questions about:</p>
<p><em>&ldquo;FYI &ndash; spoke with [CCPA policy analyst] Ben Parfitt today and advised him we could not release the order he was asking for and that he should submit an FOI. He said he has to report on this &ndash; and will put a line in to the effect:</em></p>
<p><em>&lsquo;I asked to receive a copy of the order and Graham Currie told me, due to the interregnum, it was not available and I should submit an FOI.&rsquo;</em></p>
<p><em>I suspect we&rsquo;ll see his editorial coming in the next day or two, based on this conversation.&rdquo;</em></p>
<p>A half hour later, Woolley responded saying:</p>
<p><em>&ldquo;Thx. This is [sic] the lines we are working with:</em></p>
<ul>
<li><em>During the interregnum period, it is public service&rsquo;s duty to remain impartial during this time both in action and perception.</em></li>
<li><em>Government communication practices are the same as they have always been for this election which is to not offer media relations support beyond pointing to already publicly available data or information.</em></li>
<li><em>There are exceptions to these practices which are immediate public health matters, environmental health and emergencies.</em></li>
<li><em>Further, during this time government staff do not provide analysis or comment on campaign promises of any political party, or any general comments they may make about government programs, policies and services.</em></li>
</ul>
<p><em>Release of the order would not be an immediate concern related to public health and safety or an emergency in my opinion.&rdquo;</em></p>
<p>Vincent Gogolek, former executive director of the B.C. Freedom of Information and Privacy Association, said the email exchange is troubling, particularly in light of a <a href="http://www.elc.uvic.ca/2012-healthsafetydisclosure/" rel="noopener">complaint</a> made by the University of Victoria&rsquo;s Environmental Law Centre on behalf of the Association in 2012.</p>
<h2><strong>Gov failed to alert public to dam hazard in 2010</strong></h2>
<p>That complaint, to B.C.&rsquo;s Freedom of Information and Privacy Commissioner, outlined several instances where the Association felt that government officials had acted incorrectly by withholding information that should have been released because it was clearly in the public interest.</p>
<p>One notable example was the government&rsquo;s failure to notify the public about possible safety concerns at the small Testalinden dam in southern B.C. near the community of Oliver. A portion of the dam&rsquo;s wall gave way in 2010, releasing 20,000 cubic metres of water.</p>
<p>Miraculously, no one was killed when the dam&rsquo;s reservoir triggered a mudslide that <a href="https://www.theglobeandmail.com/news/british-columbia/failure-of-nearby-dam-caused-bc-mudslide/article4322182/" rel="noopener">wiped out five houses</a> and blocked a portion of Highway 97 for five days.</p>
<p>After reviewing the law centre&rsquo;s complaint, then-Information and Privacy Commissioner Elizabeth Denham wrote a <a href="https://www.oipc.bc.ca/investigation-reports/1588" rel="noopener">report</a> in response in which she found that provincial civil servants knew from government inspection reports that the Testalinden dam was near the end of its lifespan and that it posed &ldquo;a hazard.&rdquo;</p>
<p>Denham concluded that the government &ldquo;failed to meet its obligation&rdquo; by not alerting the public to the &ldquo;compromised state of the dam.&rdquo;</p>
<p><img src="https://thenarwhal.ca/wp-content/uploads/files/Oliver_Mudslide_PN_180328.jpeg" alt=""></p>
<p><em>Testalinden creek mudslide south of&nbsp;Oliver, B.C., 2010. Photo:&nbsp;Darren Kirby via Flickr</em></p>
<p>Denham was particularly concerned that when it came to the troubled dam, civil servants appeared to ignore one of the <em>Freedom of Information and Privacy Act&rsquo;s </em>most important provisions, <a href="http://www.bclaws.ca/Recon/document/ID/freeside/96165_00" rel="noopener">Section 25</a>, which stipulates that the head of any public body &ldquo;must, without delay&rdquo; disclose any information &ldquo;about a risk of significant harm to the environment or to the health or safety of the public or a group of people.&rdquo;</p>
<p>In light of Denham&rsquo;s report, Gogolek wonders how the OGC and Ministry of Natural Gas Development concluded four years later that it was not in the public interest to proactively release information on the dozens of unauthorized earthen dams built by fossil fuel companies. Some of those earthen dams held back seven times more water than what escaped during the catastrophic Testalinden failure.</p>
<p>And in each case, those dams were not vetted by provincial dam safety officials before they were built, meaning it was anybody&rsquo;s guess whether or not the structures were designed and built to even minimally acceptable engineering specifications.</p>
<p>&ldquo;How did they interpret that these dams were so radically different than the Testalinden dam? That&rsquo;s the critical question in my mind,&rdquo; Gogolek said.</p>
<p>Gogolek&rsquo;s concern has added significance in light of other documents released in response to the CCPA&rsquo;s FOI requests. Those documents show that OGC personnel knew as far back as June 2015 that there was a significant problem at another unauthorized Progress Energy dam, yet the OGC took no significant action until May 2016.</p>
<p>And the commission remained virtually silent on the matter for almost another year until it was forced to respond because of the CCPA investigation.</p>
<h2><strong>&lsquo;I cannot determine the mode of failure&rsquo; </strong></h2>
<p>The scant details on the June 2015 incident &mdash; a failure of some kind &mdash; at a Progress Energy dam site are contained in an &ldquo;assessment report&rdquo; written 11 months later (on May 26, 2016) by the OGC&rsquo;s then-chief hydrologist Allan Chapman.</p>
<p>According to the assessment report, the chief hydrologist was not happy with what he found. Chapman discovered during his field visit that Progress had built the dam to capture freshwater from two streams.</p>
<p>Under provincial water laws, the company had to apply for a licence before diverting water from streams.</p>
<p>That had not happened.</p>
<p>The dam was 10 metres high and stored roughly five times more water than what spilled during the Testalinden disaster. That made the dam a fully regulated structure under provincial laws, meaning that before it was built engineering plans should have been submitted to provincial dam safety officials.</p>
<p><a href="https://thenarwhal.ca/2017/12/18/b-c-finds-gas-industry-built-numerous-unauthorized-fracking-dams-without-engineering-plans">That didn&rsquo;t happen</a> either.</p>
<p>Then, in spring or early summer 2015 &mdash; Chapman was uncertain when &mdash; the dam experienced some kind of failure.</p>
<p>&ldquo;I cannot determine the mode of failure,&rdquo; Chapman wrote in his report, noting that the dam&rsquo;s reservoir could possibly have overfilled and the water overtopped the structure.</p>
<p>&ldquo;There is evidence of substantial water and sediment movement into the forest downslope of the dam,&rdquo; Chapman wrote, noting that there were &ldquo;mud and splash lines on trees&rdquo; about one metre above ground level, and that those splash lines extended 100 metres or more into the forest &ldquo;approximately 100 metres downslope&rdquo; of the dam.</p>
<p>For any oil and gas industry workers in the immediate vicinity downhill of the dam that day, the mudflow could have had deadly consequences.</p>
<p>More than a year after Chapman&rsquo;s visit, in response to questions emailed to Progress Energy by the CCPA, the company acknowledged that an event had, indeed, occurred at the site &mdash; but not a failure of the dam per se.</p>
<p>In the email, Progress&rsquo;s vice-president of external affairs and communications, Liz Hannah, said that during construction of the dam &ldquo;frozen material had been excavated from the pond area and stored in the northwest corner of the site. During melting conditions, a portion of this frozen saturated material had mobilized and run offsite onto a Progress right of way and into the adjacent forested crown land.&rdquo;</p>
<p>Copies of photos included in Hannah&rsquo;s email show a very large stream of dried and caked mud that she said had been carried away from the dam site.</p>
<p>&ldquo;It is correct that a portion of the excavated soil pile failed,&rdquo; Hannah concluded in her email, &ldquo;but the dam itself did not.&rdquo;</p>
<p>By the time of Chapman&rsquo;s spring 2016 report, the OGC knew it had allowed a big problem to develop on its watch.</p>
<p>Progress Energy and other companies had clearly built many unlicensed dams on Crown or public lands &mdash; dams that the OGC could have, and should have, stopped. It was also clear that many more such dams had been built on private lands, dams that the Ministry of Forests, Lands and Natural Resource Operations (FLNRO) also could, and should, have stopped.</p>
<p>At the time, provincial regulators didn&rsquo;t know how many dams there were. They also didn&rsquo;t know where the dams were located, what waters they impounded or how safe or unsafe they might be.</p>
<p>Scrambling to quantify just how many such dams there were, the OGC sent a letter on May 13, 2016 to companies drilling and fracking for gas in B.C.</p>
<p>The companies were instructed to report back on all &ldquo;fresh water storage&rdquo; structures they had built including information on dam heights, water sources, and the amounts of water stored behind the dams.</p>
<p>The letters also instructed the companies to supply &ldquo;produced, signed and sealed&rdquo; documents from professional engineers on the &ldquo;structural integrity&rdquo; of the dams. The companies were also told that their engineers must report on any &ldquo;risk to public safety, the environment, or other property&rdquo; that the dams posed.</p>
<p>Once the responses came in, the OGC concluded that Progress Energy had built roughly half of 51 unauthorized dams, all but three of which are located on Crown lands.</p>
<p>It is now up to the OGC to approve or disapprove the dams retroactively.</p>


<p><img src="https://thenarwhal.ca/wp-content/uploads/files/Progress%20Energy%20Lily%20Dam_0.jpg" alt=""></p>
<p><em>Progress Energy&rsquo;s Lily dam is roughly as high as a five-storey building and was buit without government approval under the B.C. Environmental Assessment Act. Photo: Ben Parfitt</em></p>


<h2><strong>Evidence massive dam is &lsquo;moving&rsquo;</strong></h2>
<p>Subsequent work by FLRNO revealed that in addition to those 51 unregulated dams, another 41 were built without the required permits and that the bulk of those dams are on <em>private</em> lands, including farmlands in B.C.&rsquo;s Agricultural Land Reserve.</p>
<p>Two unregulated dams built by Progress Energy in 2012 and 2014 are particularly problematic because they are so big. One is nearly 23 metres high or roughly as tall as a seven-storey apartment building and the other is roughly as high as a five-storey building. The taller of the two earthen structures is referred to in various documents as the &ldquo;d-42-k&rdquo; or Lily dam.</p>
<p>Both dams qualified as <a href="http://www.bclaws.ca/Recon/document/ID/freeside/13_370_2002" rel="noopener">&ldquo;reviewable projects&rdquo;</a> under B.C.&rsquo;s <em>Environmental Assessment Act</em>, meaning that each of them should have undergone separate provincial environmental assessments first to determine whether Progress would be allowed to build them at all.</p>
<p>But the company never alerted the Environmental Assessment Office (EAO) of its intentions to build the dams and Progress subsequently took the extraordinary step of asking the EAO after the fact to exempt the dams from review.</p>
<p>The EAO eventually ordered the company to drain virtually all of the water behind the massive structures and is expected to soon issue its decision on the company&rsquo;s request. Several organizations, <a href="https://projects.eao.gov.bc.ca/api/document/59c4361cf97b160018030811/fetch" rel="noopener">including the Blueberry River First Nation</a> and <a href="https://projects.eao.gov.bc.ca/api/document/59ca7f0d0daa2600196ea5d8/fetch" rel="noopener">the CCPA</a>, filed documents with the EAO urging that the company&rsquo;s application be rejected.</p>
<p>A photocopied photo included in the FOI documents obtained by the CCPA shows a tension crack at the top of one sloped wall of the towering Lily dam near Mile 156 of the Alaska Highway. The 23-metre-high structure&rsquo;s &ldquo;live storage&rdquo; volume &mdash; meaning the amount of water that could be unleashed should the dam fail &mdash; is more than 20 million gallons or enough to fill 30 Olympic-size swimming pools.</p>
<p>Another email in the FOI package quotes an OGC official saying there was evidence the massive structure was &ldquo;moving,&rdquo; a sign that the dam&rsquo;s earthen walls or berms were slowly shifting, potentially causing the dam to become unstable.</p>
<p>Since the first stories on the sprawling network of unauthorized dams were published by the CCPA on May 3, 2017, belated inspections by compliance and enforcement personnel with the OGC and EAO uncovered <a href="https://thenarwhal.ca/2017/11/10/fracking-company-ordered-drain-two-unauthorized-dams-b-c-s-northeast">significant problems at 16 unlicensed dams</a> on Crown lands. Companies were ordered to take corrective action, including draining much of the water behind many of the dams to lower the <a href="https://thenarwhal.ca/2017/10/17/b-c-regulator-finds-numerous-frack-water-dams-unsafe-risk-failure">risk of catastrophic failures</a>.</p>
<p>Further problems were identified at another dozen unlicensed dams built on Crown lands, for which the Province could still issue more orders. And, more problems may yet come to light at other unlicensed dams, in particular at the 41 built on private lands and recently identified by the FLNRO.</p>
<p>All of this makes the government&rsquo;s pre-election strategy to suppress the release of information on the problematic dams more vexing. No environmental concerns? No risks to human health and safety? How did the government possibly draw such conclusions when documents in its possession clearly said otherwise?</p>


<p><em><strong>The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by <a href="https://thenarwhal.ca/newsletter/?utm_source=rss">signing up for our free weekly dose of independent journalism</a>.</strong></em></p>]]></content:encoded>
      <dc:creator><![CDATA[Ben Parfitt]]></dc:creator>
			<category domain="post_cat"><![CDATA[Investigation]]></category>			<category domain="post_tag"><![CDATA[B.C. Oil and Gas Commission]]></category><category domain="post_tag"><![CDATA[Ben Parfitt]]></category><category domain="post_tag"><![CDATA[fracking]]></category><category domain="post_tag"><![CDATA[fracking dams]]></category><category domain="post_tag"><![CDATA[In-Depth]]></category><category domain="post_tag"><![CDATA[unlicensed dams]]></category><category domain="post_tag"><![CDATA[unregulated dams]]></category>			<media:content url="https://thenarwhal.ca/wp-content/uploads/2018/03/ccpa_bc_dams_05_2017_parfitt_CMP1-1400x647.jpg" fileSize="152537" type="image/jpeg" medium="image" width="1400" height="647"><media:credit></media:credit></media:content>	
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