A new report from the Corporate Mapping Project documents the reach of the fossil fuel industry when it comes to lobbying the federal government, raising red flags about what it calls a “troubling shift in lobbying patterns.” 

The report’s findings suggest that industry lobbyists are increasingly focusing on developing closer, long-term relationships with federal bureaucrats rather than elected officials, especially since Prime Minister Justin Trudeau took office in 2015.

The report tracked fossil-fuel-industry lobbying over seven years, from 2011 to 2018 — finding that the fossil fuel industry vastly outnumbered other resource sectors, including the forestry and renewable energy industries — and analyzed how lobbying activities changed with prime ministers.

The result, the report found, is lobbying that’s increasingly focused on “deep state” connections, rather than elected officials, meaning the power of the fossil fuel industry lasts far beyond a federal election, regardless of voter appetite for climate action.

What that means, according to Nicolas Graham, a sociologist at the University of Victoria and lead author on the report, is there’s evidence of a sort of “elite policy network,” of long-lasting connections between high-powered and well-connected lobbyists and bureaucrats, “one that outlasts election cycles and develops over time.”

Proponents of the fossil fuel industry, like Alberta premier Jason Kenney, have long made a point of accusing environmental groups of being behind a “campaign of lies and defamation” against the province’s energy industry. 

When it comes to lobbying, the report found that the fossil fuel industry reported far more lobbying of the federal government than did environmental non-governmental organizations —  five times more.

“This idea that there’s a really, really well funded — disproportionately funded — environmental campaign defies the facts of a [fossil fuel] industry that is extremely well funded and very active politically,” Graham told The Narwhal.

Top fossil fuel lobbying organizations. Source: Corporate Mapping Project

‘Co-writing of policy’

Elected officials were the most-lobbied group when Prime Minister Stephen Harper was in office, according to the report. That started to change in 2015, when Justin Trudeau was elected prime minister. Then, the focus of fossil-fuel lobbyists shifted — to bureaucrats.

The report, “Big Oil’s Political Reach: Mapping fossil fuel lobbying from Harper to Trudeau,”  dubs this a shift to “deep state” lobbying, “whereby key government institutions and actors become integrated with private firms and interest groups that together co-produce regulation and policy.”

“It becomes this kind of a fusion of private interest and public bodies.” — Nicolas Graham

The result, Graham said, could suggest a kind of “co-governance and co-writing of policy,” in which industry groups take on an increasingly important role in influencing policy.

“It becomes this kind of a fusion of private interest and public bodies,” he added

Elected officials, Graham said, could be “seen as potentially not as amenable to influence from the oil and gas sector.” A strategic approach for the industry could be to integrate more deeply in government, lobbying bureaucrats rather than elected officials.

The report finds a network of well-connected senior public servants and mid-level staff who are in frequent contact with industry lobbyists.

Among the top 10 senior federal bureaucrats identified by the Corporate Mapping Project — each of whom remained in their positions after the 2015 election — the number of annual contacts with fossil fuel industry lobbyists increased from an average of around 145 contacts per year under the Harper government, to approximately 229 per year under the Trudeau government — nearly one contact per work day.

Pierre Gratton, president and CEO of the Mining Association of Canada, doesn’t think that’s newsworthy. “Anyone who does government relations knows that you work at all levels,” Gratton told The Narwhal.

“If you’re leaving it to parliament, you’re going to be disappointed in your outcome. Because the public service is the body that generates the ideas that cabinet and ultimately parliament end up deliberating upon,” he added.

“They’re often looking to us for ideas of how certain policies can work effectively.”

Gratton is also not surprised that there would be an increase in lobbying under the Liberals. “There would be a very simple explanation for that, I think — the Liberals’ approach to public policy was far more open than it was under Harper,” he said.

“Under the Liberals, I think probably everybody increased their amount of lobbying, particularly with public service. But that’s because the Liberals fundamentally changed how public policy was developed.” The Liberals, Gratton said, took public officials “off the leash” and made them more accessible to all groups.

But Graham is concerned that increased lobbying of non-elected officials could mean that lobbying efforts can far outlast election cycles and that electing new politicians may not be enough for voters to cast aside deep relationships between industry and government — something the report calls “the close coupling of federal policy to the needs of extractive corporations.”

“For people who voted in the federal election for some kind of increased action on climate change, I think it would be potentially eye-opening to think about the way policy is formed,” Graham said.

Six lobbying contacts per day

The reports finds the fossil fuel industry reported 11,452 lobbying contacts with government officials over a seven-year period — more than six contacts per work day.

A full quarter of those stem from two major industry associations: the Mining Association of Canada (MAC) — which represents a variety of mining interests, including four companies with interests in Alberta’s oilsands — and the Canadian Association of Petroleum Producers (CAPP). 

CAPP declined The Narwhal’s request for an interview about its lobbying activity, but sent a statement by email. 

“It is not surprising CAPP is among the most active lobbyists in our sector,” Jay Averill, a spokesperson for CAPP, wrote in an email. “In effect, we are the main representative for Canada’s oil and natural gas industry.”

Federal institutions lobbied between 2011 and 2018. Source: Corporate Mapping Project

“It is our job to work with local, provincial and federal governments to find the best way to encourage investment in our industry while upholding the high social and environmental standards Canadians expect,” he added, noting that the industry contributes $8 billion in annual revenues to all levels of government.

“Our oil and natural gas industry benefits all Canadians and CAPP will continue to work with the federal government on making those benefits even greater.”

Gratton, of the Mining Association of Canada, rejects the notion that his organization represents the interests of the fossil fuel industry, saying his group advocates on a narrower subset of issues and was the first industry association that came out in favour of a carbon price.

Gratton told The Narwhal that one of the reasons his organization is top of the list in lobbying activities could be because it is diligent in reporting. 

“We report everything. We’re very careful about living up to the intent and spirit of the act,” he said.

 “I have trouble believing we are much more active than other industry groups active in Ottawa,” he added, pointing to a “grey area” in when meetings with public officials are reported. 

The Corporate Mapping Project report points to numerous flaws in Canada’s lobbying rules — vague information about what was actually discussed at lobbying meetings, lack of names of lobbyists present, imprecise dates, no disclosure of fees paid to lobbyists.

“There are fairly straightforward ways transparency could be improved,” Graham said.

Lobbying windows

Lobbying efforts increase in what are known as “lobbying windows,” according to the report.

One such lobbying window was during debate leading up to changes to Canada’s environmental assessment process under the Harper government. The report found that — of the years included in the report’s analysis — the year between November 2011 and November 2012 was the highest recorded year of lobbying from the sector.

The report’s findings on lobbying windows are in line with a previous investigation by The Narwhal, which found that 80 per cent of Senate lobbying over Bill C-69 — the act to reform Canada’s environmental assessment process, that passed in June —  stemmed from industry and related groups, primarily from the oil and gas industry.

The Corporate Mapping Project report found just 10 fossil fuel industry lobbying contacts with the Senate in 2016-2017. The Narwhal found the oil and gas industry met with individual Senate members 224 times over a 16-month period beginning when Bill-C-69 was first introduced in February 2018.

“In 2018–19 big carbon saw an opportunity to block mild reforms to environmental assessment and its Senate lobbying went into overdrive,” the report notes.

As The Narwhal reported in June, CAPP had described, in its lobbyist registration, one of the topics it planned to address a “grassroots lobbying campaign to ask Senators to make sure [Bill C-69] does not pass as it stands today.”

Leaders of major energy companies have acknowledged increasing their lobbying efforts during times like these in the past.

Speaking to CBC in June, Cenovus CEO Alex Pourbaix noted that the industry had ramped up activities to “an almost unprecedented effort with government,” in order to come up with what he had hoped would be “a workable bill.”

Not all industry groups opposed the bill. The Mining Association of Canada has supported Bill C-69 since it was introduced, telling CBC in June that it would provide more certainty and was an improvement over existing legislation. 

Public interest?

Graham is quick to point out that not all lobbying is negative, and that it can play a legitimate role in advancing the public interest. What’s missing, he said, is an equalization of influence, or “equalizing access” to politicians and bureaucrats.

The report documents a “core of a small world of leading industry associations and targeted offices and individuals within government that are in regular contact with each other” — just 20 organizations accounted for 88 per cent of the total lobbying contacts by the fossil fuel industry, according to the report.

“Policies that would proactively support more equal access to political influence are needed to ensure industry is not over-represented when shaping policy,” the report notes.

Gratton of the Mining Association isn’t concerned about the state of lobbying activities in Canada, saying critics may be presenting “a sensationalized view that’s really not really a truly representative accounting of how things function.”

“Canada’s [lobbying] is very different from lobbying in the United States,” he said. “It doesn’t happen in darkened corridors.”

Gratton views Canada’s lobbying rules as robust, and says he supports multi-stakeholder engagement. “I’ll be honest, in this age of sort of populism and Trumpism, I worry that that unique Canadian way of doing things is under threat,” he told The Narwhal.

“I would hate to see a day when in the public policy is developed differently than it has been traditionally in Canada,” he said. “It’s a better way of doing things that’s better for the country.”

But Graham told The Narwhal that he’s concerned about the ways in which corporations can influence public policy in Canada.

“The economic power of industry ends up reaching into political society,” he said.

And without equal access to influence political decisions, the report warns that meaningful action to reduce fossil fuel consumption may be that much more difficult.

“In this time of climate crisis, transitioning away from fossil fuels in a rapid, democratic and socially just manner is essential,” William Carroll, a co-author of the study said in a press release. 

“If we do not acknowledge and address the influence that the fossil fuel industry holds over government policy, we will not be able to take the steps necessary to adequately address the crisis with the urgency it requires.”

*Updated at 2:08 p.m. on Nov. 5, 2019, to clarify that in 2016/2017, there were 10 fossil fuel industry lobbying contacts with the Senate, not in total.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Earlier this week, the federal government published a bombshell report on carbon pricing, predicting that a nationwide price of $50 per tonne by 2022 will cut emissions by 80 to 90 million tonnes of carbon pollution.

That’s equivalent to shutting down up to 23 coal-fired power plants or taking as many as 26 million cars off the road. In other words, a pretty big deal for the climate.

The stunning news spread quickly in online circles, shared by renown energy economists, clean energy experts and pollsters.

Journalist Justin Ling tweeted: “There’s been an incredibly disingenuous effort to suggest that carbon pricing won’t reduce CO2 emissions, or at least to contend that there’s no evidence to support the claim. So Ottawa went and produced the research.”

But nobody slowed down to check if the numbers were actually reflective of reality.

And they’re not.

The research that Ottawa went and produced isn’t really evidenced-based at all.

According to an analysis by Simon Fraser University energy economist Mark Jaccard, the federal carbon pricing policy will only reduce emissions by 10 to 15 million tonnes below 2005 levels — but it will take until 2030 to get there.

So the federal government’s claim of a 80 to 90 million tonnes reduction by 2022 is raising some eyebrows.

“When I see that, I’m like ‘oh come on guys, you’re trying to pull a fast one on us.’ ” Marc Lee, senior economist at the Canadian Centre of Policy Alternatives, told DeSmog Canada.

“People who ought to know better are just uncritically praising it.”

Carbon pricing being used as tool to justify new pipelines

This might just seem like a boring and wonkish debate over numbers. And in a way, it is.

But carbon pricing is currently playing a major role in the current climate policy landscape, viewed as the likes of Prime Minister Justin Trudeau and Alberta Premier Rachel Notley as a key bargaining chip in the campaign to get Kinder Morgan’s Trans Mountain Expansion built.

As a result, the amount of emissions that we think the policy can cut matters a great deal — especially if it’s used to justify a new pipeline and subsequent oilsands expansion.

Carbon pricing can be a very effective tool for increasing the cost of emitting. B.C. has been a shining example of a carbon tax that is both effective and popular with the public.

But disingenuous accounting has undermined faith in both the efficacy of putting a price on carbon emissions and the integrity of climate plans.

“The federal climate plan, overall, is weak,” said Laurie Adkin, political science professor at the University of Alberta, in an interview with DeSmog Canada.

“They keep trying to dress it up, and the latest assessment of anticipated gains from the federal carbon tax may be part of that effort.”

Analysis way overinflated current emissions

So what went so wrong with the federal government’s analysis?

Well, for beginners, it didn’t actually reference any specific numbers. The closest that they came to that was presenting a colourful graph with unclear metrics.

As Bora Plumptre of the Pembina Institute put it: “There are difficulties in actually assessing how they actually got the numbers that they did.”

By manually drawing a straight line from the supposed emissions reduction to the vertical axis (yes, that’s the only way of figuring it out) it appears that government assumes that carbon pricing will cut emissions to 680 megatonnes by 2022.

Given they’re predicting 80 to 90 megatonnes in savings, that means that it thinks emissions without carbon pricing would be between 760 and 770 megatonnes without carbon pricing.

But at last count, Canada’s greenhouse gas emissions were 704 megatonnes. Even the country’s highest year for emissions — in 2007, when we emitted 745 megatonnes — was considerably less polluting than what the federal government used in the analysis.

So the actual starting point appears inflated.

“This is a trick the Conservatives used many times to try to pretend their plans were actually doing a lot more than they were actually doing,” Lee said.

A spokesperson for Environment and Climate Change Canada told DeSmog Canada that they were contacting a “few different branches within the department” for more detailed methodology of the carbon pricing analysis but didn’t provide a response before deadline despite multiple extensions.

Government analysis ignored existing provincial carbon pricing

The analysis also assumed that the four provinces that currently have carbon pricing in place (B.C., Ontario, Quebec and Alberta) don’t already have them in place.

You read that correctly.

B.C. introduced its carbon tax in 2008. Quebec brought its cap and trade scheme into existence in 2013.

For inexplicable reasons, the federal government simply pretended that wasn’t the case and that four of the five highest polluting provinces in Canada didn’t already have carbon pricing. In his critical breakdown of the analysis, Jaccard wrote that it’s “grossly misleading to suggest that current provincial pricing can be attributable to federal policy.”

It also appears safe to assume that the modelling didn’t include industry exemptions and subsidies like gasoline used on farms, or natural gas burned by conventional oil and gas producers, or a large chunk of completely unpriced emissions at oilsands mines via Alberta’s convoluted output-based allocation system.

Experts suggest there’s also a chance that the federal government included significant emissions reductions accomplished by other policy measures.

“It’s very misleading, and also neglects that most of the impact is largely based on regulation, Lee said.

“We didn’t get rid of lead in gasoline because we had a lead tax that was phased in over 20 years. We just said ‘no, you can’t have lead in your gasoline after this date.’ ”

A steep carbon price needed for dramatic cuts

It’s not like carbon pricing couldn’t have these kind of reductions.

In fact, if you plug in a $50/tonne carbon price into the Pembina Institute’s nifty new climate policy simulator, it pops out 114 megatonnes in reductions by 2022.

But Plumptre caveated that by noting the simulator doesn’t include any exemptions or subsidies, and treats all carbon pricing as a tax (instead of including more complex cap and trade schemes, used in Ontario and Quebec).

Furthermore, Pembina actually uses a considerably higher baseline emissions assumption than the federal government due to recently updated global warming potential factors and higher rates of methane leakage, which puts Canada even farther from its Paris targets.

Jaccard and his team at Simon Fraser also reported in a 2016 analysis that Canada could meet its Paris target with a $200/tonne carbon price by 2030.

But they concluded rather starkly: “ It is highly unlikely that our political leaders will implement such a price, given the severe political consequences.”

So without such dramatic increases to the carbon tax and in the absence of transparent government accounting, experts are left scratching their heads at Ottawa’s latest rosy report.

“It’s all just been this black box and they’re basically saying ‘trust us,’” Lee said.

“I feel like the federal government doesn’t have much credibility on the climate file these days because they’re saying ‘we’re all in favour of climate action and we’re also in favour of pipelines,’ which we know are going to increase emissions and are specifically designed to allow the increase of production from the oilsands.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Every day, we’re assailed with dozens of facts and figures about energy issues in Canada: how many jobs or royalties will come from a new pipeline, the annual growth rate of renewables, our per-person energy consumption.

But it’s often tricky to decipher truth from fiction.

That’s where the new 176-page encyclopedic report by veteran earth scientist and expert in coal and unconventional fuels David Hughes is meant to come in.

“Hopefully what it does is it provides the foundation of facts,” Hughes said in an interview with DeSmog Canada. “There’s a lot of rhetoric when it comes to energy. I wanted to make that quantitative so we actually had that bottom line of facts, rather than conjecture. I’m not trying to be prescriptive. I don’t have a magic answer. But I think we need to start with the facts.”

Over the course of 132 graphs and another 34 tables, Hughes — who worked for the Geological Survey of Canada for more than three decades as a scientist and research manager — meticulously chronicles and illustrates close to every imaginable part of Canada’s energy system.

There are four components to the report: 1) Canada’s actual energy production and consumption compared to the rest of the world, broken down into all the different sources; 2) the supplies and money from fossil fuel production; 3) electricity sources and trends; 4) emissions trajectories and targets.

Sounds like a few metric tonnes of info, right?

Well, while we highly recommend perusing through the report in its entirety, we’ve broken down some the 10 most noteworthy facts Hughes highlights in the report.

1. Canada uses a massive amount of energy

It might not come as a surprise to many, but Canada uses a lot of energy: more than five times the world’s average on a per-capita basis.

Hydroelectricity makes up a bigger proportion of our energy mix than other countries, but we have the exact average of dependence on oil and gas as everyone else.

When it comes to natural gas — used for heating and electricity generation — Canada uses 5.8 times the global average.

On the bright side, Canada’s coal consumption has been on the steady decline since the phase-out in Ontario. We’re already using half as much on a per-capita basis as the United States — and that trend will continue as Alberta shuts down its 18 coal-fired power plants in the coming years, with massive reductions in greenhouse gas emissions and air pollution.

2. There’s an incredible amount of hydro power in this country

Canada is the second largest hydropower producer in the world, trailing only China with its colossal Three Gorges Dam.

On a per-capita basis, Canada harnesses 20 times the power from dams as the global average — only beat out by Norway, which somehow generates 51 times the per-capita average (you’ll start to notice that Scandinavia excels at a lot of these things).

Plenty of forecasts of low-carbon futures predict that Canada will have to add a lot more hydro to the grid in the coming decades. But Hughes isn’t convinced, based on recent precedent.

“I don’t think there’s any way we’re going to build all those Site C sized dams and nuclear reactors [modelled in various reports],” he said. “Economics, ecology and public protest would be off the rails.”

3. But we kind of suck at non-hydro renewables

Unfortunately, that dam-building habit has meant Canada isn’t nearly as good at non-hydro renewables: sources like solar, wind, geothermal and biomass.

Compared to Denmark (23.7 per cent of energy from non-hydro renewables), Portugal (15.5 per cent) and Germany (12.7 per cent), Canada only generated a tiny 3.1 per cent of its energy from such sources in 2016.

That’s slightly below the world average.

This is expected to change in the coming years as provinces and territories shift towards renewables.

4. Industry uses most of the energy in Canada

While we’ve been talking about per-capita consumption, it’s not really that accurate because 51 per cent of Canada’s energy is used by industry for things like oil and gas, refining, mining, pulp and paper and chemicals. Another 23 per cent is used in transportation: freight trucks, passenger cars, airplanes.

That leaves only 14 per cent for residential and 12 per cent for commercial. In other words, it’s the big factories, mines and refineries that are using most of our energy — yet they’re often the same entities which receive exemptions or subsidies for emissions.

Given the industrial sector’s large dependence on fossil fuels to make or extract stuff, this has meant that Canada has an extremely high amount of energy required per dollar of GDP — higher than even China.

While Canada’s GDP is being slowly “decoupled” from emissions, we’re still a long ways from the lower carbon likes of Denmark or the UK.

5. Western Canada is littered with an unbelievable number of old wells

Most people will understandably picture the oilsands when they think about the Canadian oil industry. But the massive growth in extracting bitumen from Alberta’s northern boreal forest is actually a fairly new phenomenon, really kicking off around 2007.

Up until that point, conventional oil — the stuff you drill for in wells — had reigned. But production from that method peaked in 1973. That’s meant that steadily rising production has required more and more wells, as declining well productivity means that companies have to keep finding and drilling more.

“With conventional oil and gas, you’ve just got to keep drilling and pouring capital into it all the time, otherwise it goes down,” Hughes said. “Companies always drill their best land first. You always got for the sweet spots, where the best economics are.”

It’s something made even more frantic with fracking. At last count, fracking now accounts for three-quarters of all oil production from wells in Western Canada. Such wells result in high initial production but decline at an even more rapid pace than conventionals — up to 83 per cent over three years.

As a result, Western Canada is just littered with wells: more than 820,000 in total, including gas, oil and bitumen. Only 235,000 are still active. A full 38 per cent of the wells are listed as inactive, with another 11 per cent as suspended. That means companies haven’t actually dealt with the environmental liabilities — which may cost billions to reclaim in the future.

6. The oilsands still produces some of the highest carbon oil in the world

Politicians and industry often brag about Alberta’s world-class environmental regulations and claim that’s a reason to justify more oilsands expansion.

But the unfortunate reality is that Alberta oilsands crude remains incredibly carbon-intensive, with Suncor’s Synthetic H blend emitting 297 per cent as much pollution as the best-performing oil in the world (in Kazakhstan) and 161 per cent as much as conventional oil in Saskatchewan. Many other oils around the world produce cleaner barrels: Iraq, Kuwait, Brazil, Russia, UK and Norway.

It’s an incredibly energy intensive process, with an energy return on energy investment of 4:1 for in-situ and 8:1 for mining, compared to 17:1 for average global oil.

7. Alberta is receiving astonishingly little return on its oil

Another resounding narrative is that Alberta needs pipelines and oilsands expansion in order to generate massive revenues for government coffers, allowing it to build schools, hospitals and roads. But Alberta is actually receiving decreasing revenues on a per-barrel basis.

Since 1980, oil and gas production in Alberta has doubled. But royalty revenues are down by 90 per cent from that level.

Currently, non-renewable resource revenue makes up a mere 3.3 per cent of the government’s income. The same has happened in B.C., with gas royalties collapsing as production skyrockets. Corporate income taxes from fossil fuel producers have also collapsed by 51 per cent since 2006.

“The concept of high-grading and selling the best of our resources off for declining revenues to governments and people who own the resource doesn’t seem to be very smart,” Hughes quipped.

8. Fossil fuel jobs are also surprisingly low

You’d never know it from listening to Premier Rachel Notley and Prime Minister Justin Trudeau, but long-term fossil fuel jobs have effectively flatlined since 2006. Meanwhile, construction jobs now constitute 52 per cent of all jobs in the sector — but they’re short-term jobs and usually evaporate as soon as a project is completed.

In total, employment in oil and gas extraction totals less than three per cent of total Canadian employment, and around 12 per cent of Alberta’s employment.

Hughes was also intentional not to include so-called “spin-off” jobs in his reporting.

“What the politicians do is say ‘we’ve got to count all of the store owners and money that these workers put into the economy,’ ” he explained. “That sort of assumes the store owners would otherwise be unemployed, which is not accurate. A lot of the jobs numbers that are quoted are huge numbers of spin-off jobs.”

In total, employment in oil and gas extraction totals less than three per cent of total Canadian employment, and around 12 per cent of Alberta’s employment. https://t.co/5uaACUKV81

— DeSmog Canada (@DeSmogCanada) May 1, 2018

9. Meeting climate targets is going to be nearly impossible with oilsands expansion

Thanks to rapidly rising oilsands emissions, scheduled to hit 115 megatonnes by 2030, it’s appearing unlikely that Canada will hit its Paris Agreement target. Currently, we’re overshooting the mark by a full 66 megatonnes — meaning costly emissions credits will have to be bought.

It’s going to get way harder heading towards 2050. By then, oil and gas emissions will require the remainder of the economy to contract by more than 100 per cent. That will require a tremendous amount of low-carbon electricity to pull off, costing anywhere between $30 billion and $70 billion per year from 2017 to 2050.

Hughes is seriously doubtful this will happen — and instead calls for finding efficiencies and reductions from existing systems.

“Investing in reducing consumption will be a very big deal,” he said.

“To me, we have to do as much of that as we can first before spending a lot of money trying to replace business as usual. I don’t think it’s possible. Fossil fuels are just too useful, energy dense and convenient. All of our infrastructure is built based on them. But I think there’s a lot of low-hanging fruit for reducing consumption.”

10. We need to rely on facts to guide us forward

Hughes spent years chipping away at this report, compiling decades worth of knowledge and sources into one place. He said he’s going to continue updating it now that he has a template.

For the rest of us, the mammoth work now exists as an excellent reference and fact-checking resource for when something a politician or industry exec says sounds a bit off.

“I just want to provide a solid factual basis to go forward,” he concluded. “I’m a grandfather. I have a concern for future generations. I’m a little put off by some of the rhetoric I see on TV. We need to start with the facts and go from there. ”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

This piece originally appeared on Policy Note, by the Canadian Centre for Policy Alternatives.

The number of unlicensed and potentially dangerous dams built in recent years in northeast British Columbia is nearly double what has been reported, according to one of the province’s top water officials.

At least 92 unauthorized dams have been built in the region, where natural gas industry fracking operations consume more water than just about anywhere on earth. That’s far more than the 51 dams previously identified in documents obtained through Freedom of Information (FOI) requests by the Canadian Centre for Policy Alternatives (CCPA).

With the number of unlicensed dams built to impound freshwater used in fracking operations approaching 100, more questions are being raised about how so many structures were built without provincial agencies halting their construction.

Ted White, director and comptroller of water rights in B.C.’s Water Management Branch, confirmed the higher number, which includes an additional 41 dams to those originally documented by the CCPA, all built on private lands, most if not all, on rural farm lots in the provincial Agricultural Land Reserve.

White’s confirmation came after his ministry — the Ministry of Forests, Lands, Natural Resource Operations and Rural Development (FLNRO) quietly posted a consultant’s report on its website early in the new year.

The report, posted without an accompanying press release, called some of the unauthorized dams potential “time bombs” and said a top priority must be “to find the high consequence dams and make sure they are properly constructed and operated and maintained in an appropriate manner before any of them fail.”

Jim Mattison, who wrote the report, was also once B.C.’s water comptroller.

Mattison based his conclusions on satellite imagery analyzed by FLRNO staff who looked at the vast network of artificial water bodies in the northeast where B.C.’s largest natural gas reserves are found. The analysis revealed nearly 8,000 water bodies have been constructed in the region, more than half of which are relatively small holes or “dugouts” in the ground that capture and store water used by farmers and/or natural gas companies.

Additionally, the report identified 268 “large” or “very large” artificial water bodies that could be dam reservoirs. These water bodies, all at least a half hectare in size and many much larger, became a top priority for further study.

After Mattison submitted a first draft of his report in March 2017, dam safety officials with FLNRO flew by helicopter to 80 suspected dams.

Those inspections, White said, identified 41 previously undocumented dams that were built without the proper licenses and authorizations. In an emailed response to questions, White said “the 41 dams identified by the Ministry are in addition to the 50 or so that the OGC [Oil and Gas Commission] had identified previously.”

In contrast to previous reports that identified dozens of unauthorized dams built on public lands, the recently identified 41 dams are all on private lands, including farmlands, White said, adding that “the Ministry and OGC have been working closely together to identify dams that require regulation.”

B.C. fracking consumes between 20 and 100 times more water than a decade ago

The unprecedented scale of problematic dams built in the region coincided with a rapid expansion in the amount of water that fossil fuel companies use in their fracking operations, particularly in the Montney Basin, the more southern of the two largest natural gas plays in northeast B.C.

According to a 2016 analysis by consulting firm Foundry Spatial, fracking operations in the region now consume between 20 and 100 times more water than they did just over a decade ago.

Around the time Mattison submitted his draft report last March, the CCPA received a tip that many unauthorized dams had been built by fossil fuel companies without the companies first obtaining required water licences or submitting engineering and construction plans to provincial dam safety officials.

The CCPA subsequently flew to Fort St. John, identified unlicensed dams in the field and published findings showing how “dozens” of such structures had been built in apparent violation of provincial acts and regulations including the Water Act, the Environmental Assessment Act and the provincial Dam Safety Regulation.

B.C. Oil and Gas Commission responsible for regulating problematic dams

FOI requests later confirmed that 51 such dams had been built. All but three were on Crown or public lands shared with First Nations.

B.C.’s Oil and Gas Commission (OGC), which regulates fossil fuel companies, is now responsible for regulating those dams.

Nearly one third of the dams first identified as unauthorized were later found to have structural problems that posed serious enough risks to human health and safety and the environment that the companies were ordered to take corrective actions.

Among the most significant design flaws were dams built without spillways, which are essential to divert water safely away from dam reservoirs in the event that reservoirs overfill. Without spillways, dams are at heightened risk of catastrophic failures.

The 41 dams on private land are FLNRO’s responsibility to regulate not than the OGC’s, and White said dams on private lands are nevertheless subject to the same laws and regulations as those on public lands.

Once dams exceed a certain height and/or impound enough water, they become regulated structures. The 41 identified dams on private lands and the 51 on Crown lands meet the criteria for regulated dams.

The story of one of the dams on private land sheds light on the challenges ahead for FLNRO’s dam safety and water officials.

The frack water gambit on private lands

Old Faithful Water Inc. is an offshoot of Swamp Donkey Oilfield Services, a Dawson Creek-based company owned by Trent Lindberg. The company is in the business of selling water to natural gas industry clients.

Like the famed geyser that spews forth water with regularity in distant Yellowstone Park and that the company named itself after, Old Faithful’s owners boast on the company’s website that they can sell water to the fracking industry winter, spring, summer and fall. Each of the company’s four “all season” facilities in the Peace River region straddle the B.C.-Alberta border and are near major hauling routes like the Alaska Highway.

Each facility has ample room for incoming trucks to hook up to pumps that can fill the average tanker with 32 cubic metres of water in just eight minutes. Then the trucks can rumble off to nearby gas drilling pads where the water is pumped underground during some of the most water-intense methane gas industry fracking operations on earth.

Much of that information is on the Dawson Creek company’s website, which features a somewhat bucolic photograph of grasses and flowers in front of what appears to be a small lake except the lake’s far banks look like they’ve been bulldozed into place.

“When it comes to easy water,” Old Faithful’s website gushes, “we have it for you.”

But the “easy water” story has an edgier, uneasy narrative.

A large, earthen dam operated by Old Faithful on private lands. Photo: Vicky Husband

At least some of what the company sells to its industry clients comes from a reservoir impounded by a large earthen dam on private land owned by Trent and Twyla Lindberg. (The Lindbergs could not be reached for comment.)

According to a document filed with the Peace River Regional District, when the dam’s reservoir is at “full capacity” the impounded water is six metres “above grade.” In other words, a wall of water roughly as high as a two-storey house is at risk of spilling in the event the dam failed.

The company built the dam in violation of key provincial regulations, including obtaining a water licence before building the dam. According to documents filed with the Peace River Regional District by a surveyor working for the company, the dam was built in mid-2013, long before the provincial government issued the water licence.

Old Faithful’s dam and reservoir are also on farmland in B.C.’s Agricultural Land Reserve, land that can no longer produce crops because it is either covered by the dam and reservoir, or by the road leading to and from the facility, or the by the large clearing constructed for the tanks and pumps used to fill the incoming trucks with their frack water.

And the water used to fill the unlicensed dam’s reservoir was pumped without permission from nearby Six Mile Creek. The surveyor’s report incorrectly claims that the creek is a “non-fish-bearing” stream when in fact the creek is home to spawning and rearing fish.

‘It’s the Wild West up here’

Last April — four years after the unlicensed dam was built — FLRNO retroactively issued Old Faithful’s owners a water licence, allowing the dam to continue operation. White said the government elected not to fine or charge the company for violating the rules.

“When instances of non-compliance are discovered related to a dam, the goal of the Ministry is to bring owners into compliance with the WSA and its regulations through application of the Dam Safety Compliance and Enforcement Policy. By applying for and being granted a water licence, the owner is demonstrating progress toward coming fully into compliance with the WSA and regulations,” White said in an emailed response to questions.

“There are currently no outstanding orders or fines related to this file.”

The lack of fines for building a dam without the required pre-approvals does not surprise Arthur Hadland, a longtime area resident, farmer and former elected director for the Peace River Regional District.

“It’s the Wild West up here,” says Hadland, who while a regional district director between 2008 and 2014 represented about 7,000 rural residents living in the outlying region around Fort St. John.

“There’s no sense of stewardship anymore,” Hadland laments. “We’ve lost that.”

Most people living in the region may have never heard of Old Faithful Water Inc.

Shell Canada, a subsidiary of the global fossil fuel behemoth Royal Dutch Shell, is another matter. The company’s sign can be seen at Shell gas stations in just about every community in the province and the company also has subsurface rights to oil and gas over an area totalling more than 88,200 hectares in northeast B.C.

In 2016, Shell had drilling rights on an even greater area of land before selling those rights on nearly 24,700 hectares to Tourmaline Oil Corporation as part of a $1.03 billion cash and stock transaction. The subsurface rights that Shell sold were in the Gundy area (generally north of Fort St. John) and included farmland where Shell, like Old Faithful, had a role in constructing two dams that violated key provincial laws.

Documents obtained by the CCPA through FOI requests filed with the OGC indicate that Commission personnel were aware of the two Shell dams that contravened key pieces of provincial legislation.

‘Long saga’ with dams: hydrologist

In an October 2016 email with the subject line “Shell Canada – Gundy – dams,” the issue of the two dams is addressed by Allan Chapman, the OGC’s then chief hydrologist, in a note to numerous FLNRO personnel.

Chapman notes that Shell had recently retroactively applied for water licences for two dams “and related stream diversions” on a rural property north of Fort St. John. He went on to write in the email that because Shell subsequently sold its leases, it was expected the company would withdraw its water licence applications and leave it to the new lease owner to come into compliance with all relevant provincial laws.

“There is a long saga with these dams and stream diversion. Everything was done 3-4 years ago without authorization,” Chapman wrote.

FOI documents also reveal that both dams are located on a “district lot” within B.C.’s Agricultural Land Reserve.

A provincial land title search shows the property – District Lot 2615 – is in the Peace River District and owned by Joleen Meservy whose mailing address is listed in La Glace, Alberta. On her Linkedin page Messervy describes herself as an owner and manager of the Bar 4A Cattle Company and as a “civil consultant” for Meservy Holdings Ltd. The word Shell and the corporation’s distinct bright yellow seashell logo outlined in red is prominently displayed beside the Meservy Holdings name.

According to the land title document, Shell holds three registered leases on the Meservy property. The document does not indicate how much Meservy paid to purchase the property, or how much she may have received from Shell in return either as a one-time up-front payment or through annual lease payments, or what arrangements may have been made between the Shell consultant and the company to access the land and take water away.

Meservey could not be reached for comment.

One of the Shell dams is identified in the document as “Water Pit #3” and was built in the middle of a wetland on the property. B.C.’s Ministry of Environment notes that wetland losses have accelerated in many parts of the province, that they are “one of the most important life support systems on earth,” and that they provide “critical habitat” for fish, birds and other wildlife, including threatened and endangered species.

There is no information in the documents about whether the two dams were built to an acceptable engineering standard.

In an emailed response to questions, Graham Currie, the OGC’s director of public and corporate relations, said the OGC “intends to issue and enforce” orders at the dams and that the Commission holds Shell responsible for the structures.

Like the dams built on public land, those on private land were all built for one express purpose: to supply water to natural gas companies for use in their hydraulic fracturing or fracking operations.

Western Canadian shale plays. Source: Rystad Energy

Accelerating gas production means more water use

While prospects appear dim for a much-hyped liquefied natural gas industry in B.C., natural gas drilling and fracking operations are intensifying in the Montney region, thanks to an abundance of naturally occurring liquids or “wet gases” that flow to the surface following fracking operations. The liquids include pentane, butane and condensates, prized commodities in the Alberta tar sands.

High-volume fracking — a process where immense volumes of water are pressure-pumped deep underground to create cracks or fractures in gas-bearing rock — is now essential to coax gas liquids and methane gas to the surface because the best, easiest to access gas resources are long gone.

Methane — a gas, not a liquid — was long the mainstay of B.C.’s oil and gas industry.

But with gas prices remaining stubbornly low, profits in the Montney now derive almost entirely from naturally occurring “wet” gases that flow to the surface along with the gas following fracking.

The drive to coax as many wet gases from the ground as possible has triggered a sharp increase in the amount of water used at fracking operations.

Encana, one of the region’s largest holders of wet gas deposits, predicts it will double its methane gas production in the Montney by 2019 while at the same time its gas liquids output will soar fivefold to reach 70,000 barrels per day.

That accelerating production means a need for more and more water.

In August 2015, a Progress Energy fracking operation in the Montney Basin consumed 160,000 cubic metres of water — the equivalent of 64 Olympic swimming pools — at just one well, according to award-winning investigative reporter and author Andrew Nikiforuk.

The fracking operation triggered a 4.6 magnitude earthquake, a tremor far more powerful than the two 2.7 magnitude earthquakes that may have contributed to the recent failure of a tailings pond dam at an Australian gold mine in New South Wales.

The water pumped during the Progress Energy fracking operation was eight times more than the amount used in an average fracking procedure in the continental United States.

Small dam failure destroyed 5 houses in 2010

Just as the OGC must now rule retroactively on whether companies that built dozens of dams without permits on Crown lands should be allowed to continue to operate those facilities, it now falls to FLNRO personnel to decide the fate of at least 41 frack-water dams built on private land.

The dams in question are tiny compared to the region’s nearby hydroelectric dams or to larger tailings pond dams operated by mining companies, however, the Mattison report is clear that plenty of damage could occur in the event one of the unlicensed fracking dams were to fail.

Some fracking dams dwarf other earthen structures that have given way in other parts of the province causing great damage, Mattison said.

“Testalinden Lake was a small reservoir in the Okanagan holding about 55,000 m3 of water, artificially created by a small dam less than 10 m high. In mid June 2010, the dam failed. Only about 20,000 m3 of water escaped and ran down a gully for 8 km, by which time it was a debris flow of about 200,000 m3. It destroyed five houses, blocked Highway 97 for five days, covered a four hectare orchard and a vineyard with one and a half metres of mud, and resulted in nine million in damages. Fortunately, there was no loss of life,” Mattison noted.

FOI documents reveal that some of the unauthorized fracking dams impound 150,000 cubic metres of water, roughly three times what the Testalinden dam held back.

The potential damage from the failure of even modest dams is one reason why the penalties for building dams without permits can be significant. If charged and convicted for violating the Water Sustainability Act or B.C.’s Dam Safety Regulation, fines can run to $200,000 and in the most extreme cases $1 million.

The worst offences can also result in jail terms.

To date, however, neither the OGC nor FLNRO have laid charges against any companies for violating provincial laws by building unlicensed fracking dams. Instead, government has taken the softer approach of coaxing companies to “come into compliance” after-the-fact.

Time will tell whether or not that approach safeguards the public interest and proves a sufficient deterrent.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

B.C.’s scientific inquiry into fracking won’t address risks to public health, the government quietly assured the Canadian Association of Petroleum Producers (CAPP) nearly six weeks before government publicly announced the inquiry on Thursday.

B.C. also assured CAPP the inquiry would not address industry’s contribution to greenhouse gas emissions, according to documents obtained by DeSmog Canada.

“You have the preeminent industry association in the country given six weeks advance notice not only about the inquiry itself but a clear indication that key things are simply not going to be addressed,” Ben Parfitt, an investigative journalist with the Canadian Centre for Policy Alternatives, told DeSmog Canada.

”I’m deeply troubled by that.”

In November the CCPA, along with 16 partner organizations, called on the B.C. government to launch a broad-reaching public inquiry into all aspects of the fracking industry, after Parfitt revealed several companies had built unlicensed dams to hold water for frack operations.

The groups renewed that call in December after a leaked report showed the B.C. Oil and Gas Commission had kept information about potentially hundreds of leaking oil and gas wells hidden for four years.

“I am extremely worried and all the groups that signed on to a call for an inquiry are extremely concerned about what we see here,” Parfitt said.

Nearly six weeks before B.C. announced its review of the fracking process, CAPP was notified the inquiry would focus only on water usage and induced earthquakes from fracking operations.

Government also made CAPP aware the province would not conduct a full public inquiry as had been requested by civil society groups, that the panel would consist of three academics and would conduct its work in April and May.

None of the 17 organizations that made the call for a public inquiry into fracking were notified of government’s intentions to launch a scientific panel.

The B.C. Ministry of Mines and Petroleum Resources did not answer questions about the nature of its consultation with CAPP or whether the industry association made specific recommendations regarding the province’s scientific inquiry. CAPP did not respond to a request for comment.

Significant harms to human health associated with fracking

The announcement of B.C.’s scientific inquiry this week coincides with the release in the U.S. of the most authoritative study of fracking’s threats to human health ever published.

The compendium, a 266-page report which draws from nearly 1,300 peer-reviewed studies, reports and investigations, was released by the Physicians for Social Responsibility and the Concerned Health Professionals of New York.

The report found “no evidence that fracking can be practiced in a manner that does not threaten human health” and puts B.C.’s avoidance of health impacts in its scientific inquiry conspicuously on display according to Barbara Gottlieb, director for environment and health at Physicians for Social Responsibility and one of the co-authors of the study.

“I’m so glad to hear there is going to be a government scientific review of fracking,” Gottlieb told DeSmog Canada. “I’m struck there are no health voices on the panel.”

The body of information addressing the threats fracking poses to human health is enormous, Gottlieb said, adding the bulk of the research has been conducted in the last five years.

“The most important thing to note is that we can say with certainty fracking causes harm to human health.”

Recent research has demonstrated a real statistical correlation between those living close to fracking sites and an increase in hospitalization for numerous causes, including increased asthma, harm to fetuses and premature birth which is the leading cause of premature death in infants in the U.S., Gottlieb and her co-authors found.

“For a long time the information was largely anecdotal, largely at the level of symptoms, so we’d see people living near fracking sites had headaches or sudden and severe nosebleeds.”

The research now shows a strong connection between serious harm and proximity to fracking operations, Gottlieb said, noting the occupational risk to those working for the oil and gas industry.

“The extraction sites are dangerous,” she said.

Amy Lubik, member of the Public Health Association of B.C., one of the groups that called on government to launch a public inquiry into fracking, said much of the research into the impacts of fracking on human health has been done in the U.S.

“There aren’t a lot of studies in B.C. around the impacts on health,” Lubik told DeSmog Canada. “It’s one of the reasons why we were hoping the government was going to examine fracking in a public inquiry.”

Lubik, who is an environmental health scientist with the B.C. Centre for Disease Control, said many other jurisdictions that have placed a ban or moratorium on fracking have done so precisely because of risks to health.

“I think we need to do a hell of a lot more research,” she said. “We talk about the chemical issue a lot with the different groups in public health. What about the people that are living and working in these industries?”

Lubik added when it comes to public health, emissions associated with the industry are also of significant concern.

“Climate change is the biggest public health risk of our time. If we aren’t meeting our Paris targets, we will put a lot of people’s health at risk.”

Emissions impact of fracking overlooked

Scientist John Werring with the David Suzuki Foundation, also a signatory of the call for a broad public inquiry into fracking, has spent the last several years measuring the impacts of leaking methane from oil and gas infrastructure in B.C.

Werring’s research found fugitive methane — an extremely potent greenhouse gas — is escaping at much higher rates than previously estimated by government or industry. A report published in collaboration between the David Suzuki Foundation and St. Xavier University recommended B.C. require industry to provide regular monitoring and reporting of fugitive emissions.

Werring said he’s disappointed B.C.’s scientific review of fracking was designed to exclude looking at those fugitive emissions.

“I think unfortunately that this is a very, very, very narrowly focused scientific review,” Werring told DeSmog Canada.

While there are environmental hazards associated with the fracking process itself, Werring said much of the impacts of fracking happen above ground.

“When we’re talking, for example, about the issue of fugitive emissions, they contain potentially toxic components that have adverse impacts on human health. These are things like benzene, toluene and hydrogen sulfide gas.”

“There is nothing here in government’s scientific review that they are going to look at the human health impacts. Nothing,” Werring said.

Gottlieb said tracking methane is important for tracking the larger movement of contaminants away from fracking sites and into communities. She added there is no known safe threshold for exposure to benzene, which causes cancer.

“The fracking site is where the gas is extracted but then the methane is carried to processing stations and then carried often hundreds of miles to power stations or increasingly in the U.S. there is a push to liquify natural gas,” she said.

Those pipelines carry with them some of the dangerous substances that come out of the ground with the methane, including particulate matter, volatile organic compounds and often radioactive material, Gottlieb said.

“These dangerous substance are not only causing sickness and hospitalization and so on where this is extracted but this whole pipeline and infrastructure system carries this toxic material with them and into communities hundreds of miles away.”

“We’re all stakeholders in regards to fracking.”

Stronger review needed

Gottlieb said in her home state of Maryland, where there is a current ban on fracking, Physicians for Social Responsibility pushed for health voices to be included in reviews of the industry’s impacts there.*

She said B.C. may be well counselled to embed a health professional in their review.

Lubik said there is still time for B.C. to alter the scope of its inquiry.

“I think there’s definitely still an opportunity — they haven’t even started yet.”

Parfitt said beyond assessing the health and emission impacts of the fracking industry in B.C., a meaningful inquiry would address the efficacy of the regulatory environment in the province.

“This review isn’t going to come anywhere remotely close to what our organization and other organizations felt was critical to be addressed by a much broader, fulsome public inquiry,” Parfitt said.

There have been too many examples of the regulator failing to protect the public’s interest, Parfitt said.

“We believe very strongly they’re not going to wrestle this beast to the ground if they’re not willing to look at how this industry is regulated.”

Fracking Inquiry Correspondence March 2018 by DeSmog Canada on Scribd

*Update: Wednesday March 21, 2018 6:45 p.m. PST. This article has been updated to reflect the fact that the state of Maryland has a ban on fracking and not a moratorium as previously stated.*

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Originally published by the Canadian Centre for Policy Alternatives.

More than half of nearly 50 dams that fossil fuel companies built in recent years without first obtaining the proper permits had serious structural problems that could have caused many of them to fail.

And now, B.C.’s Oil and Gas Commission (OGC), which appeared to be asleep at the switch in allowing the unlicensed dams to be built in the first place, is frantically trying to figure out what to do about them after the fact.

Information about the unprecedented, unregulated dam-building spree is contained in a raft of documents that the OGC released in response to Freedom of Information requests filed by the Canadian Centre for Policy Alternatives.

The documents obtained by the CCPA, along with other materials recently posted on the OGC’s website, reveal that 28 of at least 48 unlicensed dams on Crown (meaning public) lands had significant structural flaws or other problems belatedly identified by Commission staff.

All of the dams were built to trap freshwater used by energy companies drilling and fracking for gas in northeast B.C. In some fracking operations in the region, companies are pressure-pumping the equivalent of 64 Olympic-size swimming pools of water underground to break open gas-bearing rock formations, triggering earthquakes in the process.

ICYMI: A Dam Big Problem: Fracking Companies Build Dozens of Unauthorized Dams in B.C.’s Northeast

The OGC paved the way for the construction of the dams by granting companies numerous permits under the Land Act to use Crown or public lands to “store water.”

But in approving the applications, OGC personnel failed to ask basic, critical questions: How did companies intend to store the water? In tanks? In pits? Behind dams?

Since the OGC didn’t ask, the companies didn’t disclose that they planned to build dams — lots of them.

Nor did they disclose that in many cases the water sources for their dams would be creeks and other water bodies that the companies were not entitled to draw from because they hadn’t applied for, let alone received, water licences.

Since they hadn’t applied for those licences they weren’t legally entitled to build the dams.

Petronas Proposed to Dig Pit, Built Seven-Storey Dam Instead

In one notable case, documents obtained by the Canadian Centre for Policy Alternatives indicate that one of the companies, Progress Energy, also mischaracterized what it proposed to build.

In that case, Progress Energy, a subsidiary of the Malaysian state-owned corporation Petronas, filed documents with the OGC indicating where a water storage “pit” was to be excavated on land just to the west of the Alaska Highway and a short distance south of the Sikani river.

The document was submitted to the Blueberry River First Nation as part of the company and government’s “consultation” record with the First Nation.

Instead of an excavated pit or hole in the ground, what was built was an earthen dam 23 metres high, or roughly as tall as a seven-storey apartment building.

In approving the applications, BC regulatory personnel failed to ask basic, critical questions: How did companies intend to store the water? In tanks? In pits? Behind dams? https://t.co/fXMkNnhsfy

— DeSmog Canada (@DeSmogCanada) December 18, 2017

Regulator Retroactively Assessing, Approving and Denying Dam Permits

Having allowed one unauthorized dam after another to be built, the OGC confronts a daunting regulatory challenge of its own making. In some cases years after the fact, Commission personnel must retroactively approve, deny, or order modifications to dozens of dams that are already built on Crown lands.

The after-the-fact review process will include ruling on the environmental and health and safety risks posed by dams whose engineering specifications and construction plans were never vetted by any provincial agency before construction. It will also include retroactively reviewing, approving, or denying dozens of pending water licence applications.

How First Nations will be consulted in all of this remains unclear, as the consultations will also occur well after the fact.

Regulator Fieldwork Reveals Serious Problems at Dam Facilities

Less than two weeks after the CCPA published its initial research on the unauthorized dams last spring — and after numerous media outlets picked up on the story — OGC personnel stepped up efforts to understand just how structurally unsound some of the dams built on its watch might be.

That effort included sending personnel by helicopter just two weeks after the story broke to 47 suspected unlicensed dams. These inspections (which took place on May 16 and 17, 2017) occurred shortly after heavy rains had pummelled the region and fossil fuel companies had been warned by the OGC to protect their infrastructure against possible flood damage.

ICYMI: B.C. Regulator Finds Numerous Frack Water Dams Unsafe, At Risk of Failure

The fieldwork uncovered serious problems at seven facilities, or 15 per cent of all dams visited. Among the most significant problems were dams built without spillways to safely divert water away from the dam’s reservoirs when they became dangerously full.

Building a dam without a spillway can cause it to fail. It is the residential construction equivalent of building a house without a door. There’s no safe exit point.

Progress Energy Dam Danger Spotted By Chance

At one Progress Energy dam, the inspectors arrived to find a work crew using four pumps to partially drain a reservoir holding back nearly 50 Olympic swimming pools worth of water.

The pumped water was racing downhill away from the dam toward a steep bluff beside Blair Creek, about a 40-minute helicopter ride north and west of Charlie Lake. The pumped water was rapidly eroding the bluff. With no properly designed spillway for the dam’s water, the company’s jerry-rigged pumping operation was in danger of causing the bluff to destabilize and slide into the creek.

Only by chance did the inspectors arrive in time to spot the “erosion and slope stability” problem unfolding near the creek, the FOI documents reveal. The inspectors phoned Progress Energy’s Calgary offices and told the company to stop pumping the water.

According to the FOI documents, Progress Energy was responsible for building five of the seven dams that were issued orders following the May inspections. ConocoPhillips Canada Resources, a wholly owned subsidiary of ConocoPhillips, one of the largest oil and gas companies in the world, was responsible for the other two.

Progress was also identified in the inspection reports as having 14 additional dams with evident problems.

Dams Constructed Without Engineering Designs and Plans, Docs Reveal

Noted “deficiencies” at these other 14 dams included no armoured spillways, evident slumping of earthen dam walls, “erosion and cracking” issues, no water licences having been applied for before the dams were built, and two instances where the dams were so tall that they qualified as “major projects” under B.C.’s Environmental Assessment Act.

In an undated “summary of information” written some time after the May 2017 inspections numerous concerns were raised about Progress’s dams. The summary was penned by OGC hydrologist Allan Chapman, OGC compliance and enforcement officer Ken McLean, and the OGC’s recently-named and first-ever dam safety officer Justin Anderson.

“We are aware that Progress Energy submitted water licence applications for many dams on December 23, 2016,” the memo reads. In point of fact, Progress had actually applied for 13 water licences that day — an exceedingly rare event in and of itself, to say nothing of the fact that each and every application involved water rights at dams that the company had built without obtaining the licences first.

“Chapman is generally aware that the Progress Energy dams were constructed without engineering designs and plans, without clear adherence to and consistency with dam safety requirements, and that some have an array of deficiencies associated with fill and berm instability, and that some (possibly most) lack basic dam construction standards such as spillways or outlets designed for a specified inflow.”

Of the 47 dams inspected in mid May, three turned out to not be dams. Another three were definitely dams and had problems. But in those three cases, the companies had essentially deactivated the dams at some point after unspecified problems arose.

That brought the number of dams that the inspectors dealt with over the two days of fieldwork down to 41. The 41 dams were all located in the Montney region, which is in the more southern portion of B.C.’s vast northeast region.

Since those May inspections, further fieldwork was done. OGC personnel inspected a number more dams, including four built by Nexen Energy (a wholly owned subsidiary of the Chinese state-owned oil and gas giant CNOOC) in the Fort Nelson area further north from where the May inspections took place.

As a result of this second round of inspections, the OGC announced on November 14, 2017 that Nexen had been ordered to “remove” virtually all of the water impounded behind the four dams. These unlicensed dams, according to a short bulletin published on the OGC’s webpage, all showed troubling signs of deterioration, including “slumping, surface erosion and surface water channel erosion” problems.

Nexen was ordered to drain all “live water” from behind the problematic dams. Live water refers to the water impounded by a dam that is above ground level and therefore capable of escaping should a dam fail.

Two other companies were issued orders that day as well. Saguaro Resources Ltd. (a private, Calgary-based gas production company) was ordered to take action at two of its dams, and ConocoPhillips at one.

Between the May inspections and the subsequent inspections further to the north, it now appears that there are at least 48 unlicensed dams on Crown lands, with an as-yet undisclosed number more built on private property, primarily farmlands.

Of the 48 Crown land dams, a total of 16 or one third have been hit with retroactive orders. Fourteen of those orders were made by the OGC, following belated inspections of the dams. (The orders include the seven issued in May and the seven issued in November.)

Dams Skirted Environmental Assessments Under B.C. Laws

B.C.’s Environmental Assessment Office (EAO), has issued a further two orders. Those orders, as spelled out in documents first obtained by the CCPA, apply to the two largest dams built by Progress Energy — the previously mentioned 23-metre-high dam, known as the Lily dam, and another nearby dam known as the Town dam, which is more than 16 metres high.

Because both dams exceeded 15 metres in height, they qualified as “major projects” under B.C.’s Environmental Assessment Act, and therefore should have undergone provincial environmental assessments before they were built.

ICYMI: Fracking Company Ordered to Drain Two Unauthorized Dams in B.C.’s Northeast

Because the company never referred its plans to the Environmental Assessment Office before commencing construction, and because the Oil and Gas Commission failed to stop the company from building the dams, the EAO launched an investigation.

On October 31, the EAO ordered the company to drain virtually all of the water from behind these two very large dams and to keep water levels at no more than 10 per cent of their holding capacity, adding that the company was “not compliant” with Section 8.1 of the Environmental Assessment Act.

In the meantime, the EAO continues to consider an extraordinary application by Progress Energy to retroactively “exempt” the two dams from having to undergo environmental assessments at all.

The CCPA and a number of other organizations filed documents with the EAO recommending that the company’s request be denied. The EAO is expected to make its decision early in 2018.

Under the Environmental Assessment Act, companies found to have violated the act can be subject to fines of up to $100,000 for a first offence and subsequent offences can triggers fines of up to $200,000.

Unpermitted Dams ‘Disconcerting’: Premier Horgan

Commenting recently on the proliferation of unlicensed dams during an appearance on the Shaw TV political affairs show, Voice of BC, Premier John Horgan said that “the revelation” that nearly 50 dams were built on the OGC’s watch in violation of existing regulations was “disconcerting.”

He added that both Environment Minister George Heyman and Energy Minister Michelle Mungall were aware of the issue and were “working together to try and find ways to make sure that enforcement and compliance can be done in a way that gives the public confidence.”

ICYMI: Coalition Calls for Public Inquiry Into B.C. Fracking

“At the end of the day, our systems fail if the public has no confidence in them,” Horgan said. “We’re going to do what we can to make sure that the existing Oil and Gas Commission regulatory regime is either being enforced, and if it’s not, we’ll bring in others to do so.”

Horgan’s comments also came after numerous non-governmental organizations, environmental groups, physician associations and First Nations called on the provincial government to launch a public inquiry into fracking, including how effectively the OGC regulates its fossil fuel company clients.

Image: The largest unauthorized dam built by Progress Energy. Photo: Ben Parfitt

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Hundreds of gas wells could be leaking methane and potentially contaminating groundwater, according to a B.C. Oil and Gas Commission (OGC) report that has been kept secret from the public and politicians for four years.

That suppression of information is giving ammunition to calls for a full public inquiry into fracking operations in the province.

“It is deeply troubling that B.C.’s energy regulator kept this report secret. Why did it not tell the public? Why, as the OGC now alleges, did it also not share the report with cabinet ministers who have responsibility for the energy industry?” Ben Parfitt, a resource policy analyst with the Canadian Centre for Policy Alternatives, told DeSmog Canada.

“We need answers and a full public inquiry is the best way to get them,” he said.

The staff report from December 2013 was finally posted to the commission’s website last month, after a copy was leaked to an investigative reporter, and that points to troubling questions about the motivation in not releasing such sensitive information, Parfitt said.

Phil Rygg, the Oil and Gas Commission’s director of public and corporate relations, said in an emailed response to questions from DeSmog Canada that the Gas Migration Report was an internal report to allow the commission to “better understand the issue of gas migration, plan next steps for data gathering and potential mitigation effects.”

“It is deeply troubling that B.C.’s energy regulator kept this report secret. Why did it not tell the public?” https://t.co/Ac6c4nwdDh

— DeSmog Canada (@DeSmogCanada) December 16, 2017

Report Identified 900 Potential Leaking Gas Wells

The 2013 report documents 47 cases of gas migration — leaking methane — and speculates that, in the one zone studied, in northeast B.C., there could be 900 leaking wells. But, the commission does not have an “accurate understanding” of the total number of methane-leaking wells or good research on the effect of gas migration on aquifers, it says.

None of the wells identified were in close proximity to domestic water wells and there was no information that the confirmed leaking wells had affected domestic groundwater, the report says.

But risks to health, safety and the environment are acknowledged.

“Although methane is non-toxic, if methane is introduced into a drinking water system, there is potential to create an explosive atmosphere in confined spaces. Additionally, gas migration is a source of GHG emissions,” it says.

ICYMI: Coalition Calls for Public Inquiry Into B.C. Fracking

The report was written shortly before Rich Coleman, then BC Liberal minister of natural gas development, said that there was no evidence of groundwater contamination after decades of fracking.

“The reality is we’ve been doing this for over 50 years, we’ve never had a contamination from a drill,” Coleman said in response to questions about a scientific report saying fracking could contaminate surface and groundwater.

At that time, the province was aggressively pursuing liquified natural gas (LNG) development, so the information in the commission’s report was politically sensitive, said Parfitt, adding that that makes it even more puzzling that the information was not shared with politicians.

“We have a politician saying there is no evidence of groundwater contamination, but the head of the the commission has different information,” Parfitt said.

Cozy Ties Between Oil and Gas Industry and Regulator

It is not possible to know why the information was suppressed, Parfitt said.

“But a criticism that has been made of the Oil and Gas Commission is that there appears to be a troublingly close relationship between the regulator and industry clients that it regulates. I think this is something that should be looked at very closely by the provincial government,” he said.

It would be more acceptable for permit issuance to be separated from the compliance and enforcement function of the commission, Parfitt said, suggesting that enforcement should be handed to another organization such as the Conservation Officer Service.

Auditor General Carol Bellringer concluded after the Mount Polley tailings dam collapse that there was an inherent conflict of interest between promotion of the mining industry and ensuring compliance with environmental standards; Parfitt believes Bellringer would be likely to come to the same conclusion if she looked at the oil and gas sector.

Rygg said that since 2013 the commission has bought new equipment to better detect leaks, tightened regulations to ensure the commission is immediately notified of incidents and is conducting additional field investigations.

In addition, he said the commission has formed a working group with industry to improve drilling and cementing practices, is involved in several research projects, and recently conducted a helicopter survey of abandoned wells to better identify methane emissions.

“As of June 2017, gas migration has been reported to be associated with 144 wells in northeast B.C.,” he said.

It is the second time this year that serious questions have been raised about the OGC’s lax regulation of fossil fuel companies, Parfitt said.

Earlier this year, a CCPA investigation found the gas industry had built about 50 unlicensed dams to trap water used in fracking operations.

ICYMI: A Dam Big Problem: Fracking Companies Build Dozens of Unauthorized Dams in B.C.’s Northeast

Also, this year, the David Suzuki Foundation published research showing that 118,000 tonnes of “fugitive” methane was being released into the atmosphere annually at B.C. gas wells and other energy sector sites. The Suzuki Foundation found that release of that methane — which as a greenhouse gas is 84 times more potent than carbon dioxide — is equivalent to adding two million vehicles to the road.

The CCPA and Suzuki Foundation are among 17 organizations that have called for a public inquiry into fracking, instead of the government’s promised scientific panel review.

“Only with a full, adequately funded, independent public inquiry, where witnesses testify under oath, do we believe British Columbians will get the information they need,” Parfitt said.

“That includes information on why the OGC has failed to effectively regulate the industry and protect the public interest, and why it has withheld key information from the public.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Documents released on Monday reveal that B.C.’s climate plan under the previous Liberal government was drafted by the oil and gas industry in a Calgary boardroom, just as the province’s new NDP government moves to ban corporate and union donations to B.C. political parties.

The documents speak to long-standing concerns over the influence of political donations in B.C.’s political process. B.C. has long been considered the ‘wild west’ of political cash for placing no limits on corporate, union or foreign donations.

“I think this is deeply corrosive to our democracy and it encourages cynicism about politics,” Max Cameron, political science professor and director of the Study of Democratic Institutions at the University of British Columbia, told DeSmog Canada.

The documents, released to Shannon Daub of the Canadian Centre for Policy Alternatives as part of her research with the Corporate Mapping Project, reveal that while the B.C. government under former premier Christy Clark hired a celebrated Climate Leadership Team and conducted public consultations, a parallel industry consultation process occurred behind closed doors in a boardroom of the Canadian Association of Petroleum Producers.

The BC Liberals have raked in cash from the fossil fuel industry, including more than $3.7 million from just the top 10 industry donors between 2008 and 2015.

Cameron said the documents, which include slides outlining industry working groups tasked with addressing carbon pricing and methane emissions, provide a much-needed glimpse into what exactly industry is paying for when making large donations to political parties.

“Reading these documents gives us some real insight into how it is that these kinds of donations can buy not just access to government but access to actually writing policy,” he said.

Clark’s Secret Consultations with Oil and Gas Donors Revealed As BC Introduces Big Money Ban #bcpoli @CCPA_BC https://t.co/nFjm9W8Vqx

— DeSmog Canada (@DeSmogCanada) September 18, 2017

Climate Leadership Team Unaware of Parallel Industry Consultations

B.C. handpicked a blue-ribbon team of 17 academic, business, environmental and First Nations stakeholders to form the Climate Leadership Team. That team made 32 official recommendations to the B.C. government, none of which were implemented in the province’s eventual Climate Action Plan.

Merran Smith, executive director of Clean Energy Canada, was a member of the team and said the fact that not a single recommendation was adopted “really says it all.”

Christy Clark’s government “allowed the oil and gas sector to write the climate plan for B.C. that is mostly status quo and has very little impact on B.C.’s growing climate pollution,” Smith told DeSmog Canada.

She added once the team made its recommendations to the government, their involvement in the crafting of the Climate Action Plan tapered off quickly.

“We had very few meetings with the B.C. government once the recommendations were created. It was clear that they actually had very little interest in doing anything with recommendations.”

Meanwhile, Christy Clark pointed to the recommendations at the UN Climate Summit in Paris as evidence of B.C.’s climate leadership.

Tzeporah Berman, a prominent environmental advocate in B.C. and member of the Climate Leadership Team said she had no idea B.C. was conducting parallel consultations with industry.

“I was shocked when I saw these documents,” Berman told DeSmog Canada.

“Consultation should be a transparent process and should be done with multiple stakeholders. These were secret meetings in Calgary where the oil and gas industry was rewriting B.C. policy. That's not consultation, it's corruption.”

Berman said the documents reveal an “unacceptable level of access and influence with the Liberal government.”

“They also help those of us from the leadership team understand how the climate plan that the Liberals put together really had no similarity to what the Liberals’ own climate team recommended,” she said.

The team worked hard for months to deliver a plan within a short timeframe and offered to meet with stakeholders to “problem solve any concerns” if that would help B.C. “ensure implementation” of the recommendations, Berman said.

But that offer was never taken up.

“From our end it was a bizarre process,” Berman said.

Fossil Fuel Companies Regularly ‘Craft’ Climate Plans

Laurie Adkin, professor of political science at the University of Alberta, said when it comes to government consultations with corporations, “secrecy is routine” and “transparency is the exception.”

“Even when governments reveal that they have met with representatives of private corporations, reporting on these meetings typically does not reveal which corporate representatives were in the room, or what their positions were,” Adkin told DeSmog Canada.

Adkin, who is a member of the Corporate Mapping Project, specializes in documenting corporate influence in politics and on university campuses.

Government consultation with industry is the status quo, Adkin said, while public consultation is meant to merely survey public opinion and “give the appearance that government has created meaningful opportunities for citizen input into policy decisions.”

“I do not believe that any climate change plan has been written, to date, in which the major fossil fuel corporations have not ‘directly crafted’ the plan,” Adkin said.

Adkin and Cameron agree the documents are reflective of “institutional corruption.”

“Corruption isn’t just quid pro quo of privately benefitting from your public office, it’s also a corruption of the institution, when the public purpose of the institution is undermined by private actors in a way that diminishes our trust in those institutions,” Cameron said.

“The goal of public policy is to serve the public’s interest, not to serve particular private interests.”

Leadership Team Hopeful Under New NDP Government

Berman said the oil and gas industry has too much political influence in Canada, but said she is hopeful the new B.C. government will “design policy to benefit the people and not just polluters.”

“I was very glad to see the carbon tax increase in the last budget,” Berman said.

“I think the next step is removing all the subsidies that the Liberal government handed out to the gas industry. We shouldn't be spending taxpayers dollars to help the fossil fuel industry expand in the climate era”

Berman said she also looks forward to the new government moving forward on the zero emissions vehicles targets and strengthening the clean fuel standard.

Smith said she is pleased the Climate Leadership Team had the opportunity to craft the recommendations when it did.

“The silver lining is that we still have a good, solid set of climate action recommendations sitting there, and we now have a Premier and government who is interested in taking climate action and building a clean growth economy for the twenty-first century.”

Image: Former premier Christy Clark at a Woodfibre LNG announcement. Photo: Province of B.C. via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

By Shannon Daub & Zoë Yunker.

Newly uncovered documents obtained through Freedom of Information requests reveal the cozy relationship between the fossil fuel industry and the last B.C. government went even further than suspected — all the way to inviting industry to directly craft the province’s climate “leadership” plan.

Let’s rewind for a second: back in the spring of 2015, then-premier Christy Clark announced the provincial government would create a new climate plan.

A 17-member climate leadership team was appointed and tasked with developing recommendations to meet B.C.’s greenhouse gas reduction targets. The government released the team’s recommendations in the fall of 2015 — allowing then-Premier Christy Clark head off to Paris for the December 2015 UN climate talks cloaked in the mantle of climate “leadership,” after four years of near-total inaction by her government.

That’s where things got interesting.

Documents obtained via Freedom of Information legislation indicate that while the Paris talks were underway, the government launched a closed-door three month-long process to work jointly with the oil and gas industry to revise and re-write the climate leadership team recommendations.

The process entailed five rounds of meetings over three months with all the key corporate players, from oil and gas producers to distributors. It was divided into working groups on the carbon tax; methane and fugitive emissions (i.e., from natural gas production, a significant source of B.C.’s greenhouse emissions); and electrification (i.e., the provision of cheap electricity to natural gas extraction sites and LNG plants in order to make gas production less GHG-intensive).

Notably, most of these B.C. government-organized meetings took place not in B.C., but in Calgary — specifically in the boardroom of the most powerful fossil fuel lobby group in the country, the Canadian Association of Petroleum Producers (CAPP).

The documents include a power point deck dated January 2016 that outlines the process for the “Climate Leadership Team Recommendations – Consultation with Oil and Gas Industry.”

The document is from the Ministry of Natural Gas Development, which led the “consultation”— not the Climate Action Secretariat, which coordinated the Climate Leadership Team (and, as far as the public knew, was the lead government agency working on the plan). The documents released also include agendas from one round of working group meetings on January 13, 2016, along with the attendee lists for those meetings.

These lists show that senior officials from the Ministry of Natural Gas Development, the Climate Action Secretariat and BC Hydro attended the January 13 meetings in person. We do not yet have access to the daily calendars for several other senior officials who we believe may also have been present.

Also in attendance were over two dozen representatives from at least 16 oil and gas corporations and industry groups, including the B.C. LNG Alliance (which also had a seat on the official Climate Leadership Team), Canadian Natural Resources Limited, Chevron, ConocoPhillips, Encana, Imperial Oil, Nexen/CNOOC, Progress Energy (wholly owned subsidiary of Malaysian state-owned Petronas), Shell Canada, Suncor, Teck, Woodfibre Energy, CAPP and others.

Recall that when the climate leadership plan was released in the summer of 2016 it largely ignored the leadership team’s 32 recommendations, in what was dubbed by some as a “climate non-plan.”

Meet the Real Climate “Leadership” Team: Big Oil and Gas Corporations

Most troubling of all is that this was much more than a “consultation” process.

The documents obtained make it clear that in fact the process constituted an invitation to the country’s most powerful oil and gas companies to shape both the substance and language of B.C.’s next climate plan.

For example, the working groups on methane emissions and electrification were each asked to “refine language in CLT recommendation” and to “add detail and process direction” regarding timing and whether policy measures would be voluntary or regulatory. The working group on the carbon tax was asked to “ensure consistency with other jurisdictions” and to “determine ‘the art of the possible’ (how much and how fast).”

The working groups were asked to come together to “work on offsets.” The timeline for the working groups also include the action item “finalize language” for the “CLP Framework” (ie, Climate Leadership Plan Framework).

Our FOI request asked for minutes and/or summaries of the meetings and industry consultation process, but none were released to us. Pages 19 to 38 of the relevant records were withheld on the grounds they constitute advice or recommendations to a public body or minister (S. 13) and/or that they would be harmful to the business interests of a third party (S. 21).

Perhaps these missing pages are the minutes and summaries. Or perhaps they are something else. We have asked the Information and Privacy Commissioner to review the government’s decision to withhold these records.

It should be noted that it took two FOI attempts to even receive this much information. In July 2016, we submitted identical requests to the Ministry of Environment/Climate Action Secretariat and the Ministry of Natural Gas Development for documents relating to any meetings or other communication between the fossil fuel industry and senior officials in relation to a wide range of energy and climate policy matters starting in January 2016.

The Ministry of Natural Gas Development withheld all documents having to do with the industry engagement process and Calgary meetings.

The Ministry of Environment released the agendas for the January 13 working group meetings (just the agendas, no other contextual information). It was only through a follow-up request to the Ministry of Natural Gas Development (now part of the Ministry of Energy, Mines and Petroleum Resources) that we obtained the fuller set of documents reviewed here. These should all have been released in response to our initial request, along with material from the other rounds of working group meetings (and who knows what else).

A Stunning Example of Institutional Corruption

In sum, the B.C. government carried out secret meetings in another province with an industry that is a top contributor to the BC Liberal Party to shape policy that ought to constrain that very industry — as any meaningful climate policy must do in relation to the fossil fuel sector.

Ironically, none of these meetings “count” as lobbying under B.C.’s current Lobbyist Registration Act, which doesn’t require meetings or communication invited by public officials to be reported by lobbyists. Meanwhile, no other sector — environmental organizations, First Nations, etc. — could even dream of this kind of access.

BC’s Last #Climate 'Leadership' Plan Was Written in Big Oil’s Boardroom (Literally) https://t.co/lUKX67Hsy9 #bcpoli @CCPA_BC @bcliberals

— DeSmog Canada (@DeSmogCanada) September 18, 2017

This is more than a case of ideological alignment between a corporate-friendly party and its corporate donors. It is a profound blurring of the lines between government and industry, who set out to make policy together behind closed doors, while what can only now be characterized as a pretend consultation process was acted out publicly.

This blurring of the lines is an example of what ethicists refer to as “institutional corruption:” a “systemic and strategic influence that undermines the institution’s effectiveness by diverting it from its purpose or weakening its ability to achieve its purpose, including…weakening either the public’s trust in that institution or the institution’s inherent trustworthiness.”

The whole charade also represents an abuse of the climate leadership team’s time and a mockery of B.C.’s claims to leadership during the Paris climate talks, not to mention a tremendous waste of public resources.

How much did the province spend on the climate leadership team process — convening the 17-member team for meetings, carrying out extensive climate modeling to support their deliberations (services that were contracted from the private firm Navius, no doubt at significant expense) and public consultation activities? How many thousands of hours of staff time were spent by ministry personnel to support it all?

B.C.’s new government has committed to more ambitious climate policies than what the previous Liberal government outlined in its non-plan last year. But with the fossil fuel industry accustomed to putting pen to paper on policy and regulation, a great deal of political will is required to move forward. And that ban on corporate donations to political parties? It can’t come soon enough.

   —

Shannon Daub is Associate Director of the Canadian Centre for Policy Alternatives B.C. Office, and co-director of the Corporate Mapping Project. Zoe Yunker is Zoë is a graduate student in the Sociology Department at the University of Victoria and a research assistant with the Corporate Mapping Project.

This report is published as part of the Corporate Mapping Project, a research and public engagement initiative investigating the power of the fossil fuel industry. The CMP is jointly led by the University of Victoria, the Canadian Centre for Policy Alternatives’ B.C. and Saskatchewan offices, and the Parkland Institute. In March, the project reported on the millions of dollars donated by the fossil fuel industry in recent years to B.C. political parties.  This research is supported by the Social Science and Humanities Research Council of Canada (SSHRC).

DeSmog Canada is a community partner of the Corporate Mapping Project.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Alberta is a province renown for its political dynasties.

Since its founding in 1905, only five parties have ruled, with the Progressive Conservatives reigning for a staggering 44 years between 1971 and 2015.

But when it comes to oilsands policy, the province’s compass has been set by two premiers: Peter Lougheed and Ralph Klein. Both took distinct approaches, with Lougheed emphasizing managed development assisted by public funding, while Klein allowed industry to largely set the terms of engagement (including far lower royalties and the fast tracking of environmental reviews).

It might seem like ancient history. But it arguably matters more than ever given the complex politics of the current Alberta NDP government, which is juggling a cap on oilsands emissions while also advocating for increased production.

Enter “Betting on Bitumen: Alberta’s Energy Policies from Lougheed to Klein.” It’s a brief 36-page report written by Gillian Steward, a Calgary-based columnist for the Toronto Star, and published via the Parkland Institute and the Canadian Centre for Policy Alternatives (CCPA). In it, Steward explores the distinct approaches to oilsands development of Lougheed and Klein, helping to contextualize the ongoing actions by the Alberta NDP government.

DeSmog Canada talked to Steward about the report and her findings.

What compelled you to write this report?

I think there’s a lot out there about the current situation regarding energy policy, the NDP government, what they have to do or what they shouldn’t do. But I think people, in many ways, have lost track of how we got where we are. It’s kind of a long and windy road, but it’s really interesting and I just think it’s part of the history and it puts into context what’s happening now.

A key part of the report concerns Peter Lougheed’s legacy, something which many Albertan politicians will harken back to. Do you sense that politicians who talk about Lougheed necessarily recognize the true legacy of Lougheed?

I don’t think people recognize how much government intervention there was in terms of really kickstarting the development of the oilsands. The government put in a lot of public money, a lot of organization, and not just a one-shot deal: it went on for a long time. I think the fact the oilsands then became so valuable and so much of the technology became so important, particularly the in-situ, is really because of all the public money that was spent during the Lougheed era. That was basically all money that the corporate sector didn’t have to pay. Not that they didn’t pay anything, but they were in many ways subsidized by the government of the time.

With that in mind, do you still think it’s fair to characterize Lougheed’s legacy compared to later premiers as more adversarial — or at least not quite as friendly — with the oil and gas industry?

I think that’s true. He was certainly not an enemy of the industry or anything like that, but I think he knew how to assert his authority over the sector. He raised royalties significantly early on in his tenure and he basically said ‘this is what we’re going to do and this is how we’re going to do it.’ It wasn’t that he didn’t cooperate with the industry, but he certainly let them know who was in charge. At one point, the industry was so mad with him that they revoked his membership in the Calgary Petroleum Club. They were not necessarily happy, particularly with his position on royalties.

I think because he came from that world, he understood it and was in a better position to advocate for the people of Alberta as opposed to always advocating for the industry.

Do you have any sense of why Lougheed was able to do that? Was it because of really firm convictions or economic conditions? Is there something you attribute his decisions to?

I think there’s a couple of things there. One is I think he was actually quite visionary. I think he thought in terms of the big picture, as well as being someone who was pragmatic enough to know how to get to the big picture. Also, it was a different time in the sense where government intervention in various programs was more accepted than it is now: that really fell off in the ’80s. It was a more accepted economic or public policy practice then than it is now.

One of Ralph Klein’s first moves was to sell off the Alberta Energy Company, which was a big part of Lougheed’s legacy. What motivated that decision?

Again, I think there were a couple of things there. One is that compared to Lougheed, the Klein government had really swung more to the right. They saw Lougheed as almost being too pink for them, too socialist, in the sense that he did use government money to subsidize business. They believed that government should get out of the business of business.

The other reason was they needed the money. Klein was faced with debt and they didn’t want to raise taxes. They were looking to raise revenues. That was one way to do it.

Is it strange to you that companies and associations don’t acknowledge the role that government intervention has played over the years?

There’s no question that through the Alberta Oil Sands Technology and Research Authority, which was funded by the Lougheed government, really pushed the technology along in many ways. In-situ development was one of the main products of that: what it meant was that corporations didn’t have to spend all that money developing it. Public money went into developing it.

We don’t ever hear much about them acknowledging public money for that. When the report from the National Task Force on Oil Sands Strategies was released, they used the in-situ technology as a reason to really move ahead fast. But they don’t acknowledge where it came from or why it had become so important.

You point to the National Task Force and its final report as a watershed moment for the direction of how oilsands was managed by the government. Yet we rarely hear about it. Why do you think that specific task force and report was so significant in Alberta’s history?

Basically, it coincided with Klein’s first years in power and it outlined a way to move forward on oilsands development that allowed for the government to pump up the economy, which meant they could increase government revenues. That’s what they were looking for. They were looking for some kind of plan where they could increase government revenues but not through taxes. By heating up the economy, they were assuming they get more taxpayers even though they hadn’t raised taxes.

It just came at the right time for them. They were in debt, we’d just come out of a recession, all that kind of thing. By accepting what the task force recommended, which is basically ‘let us push ahead, don’t put too many obstacles in front of us, there will be lots and lots of investments’ and then at the same time the oil price started to go up. I don’t think anybody could have predicted it at the time that it would go as high as it did. But it was a nice coincidence given they had really unleashed the development in the sense that they allowed the industry to do it the way they wanted to do it. By taking away a lot of environmental regulations, by making a lot of the oilsands royalties so low, they encouraged development. But then at the same time, the price went up.

You also identified how the news media helped spread the findings of that, especially the legitimization of the panel even though it was very industry-stacked. Why did that happen? And do you sense that has changed since in terms of how the media reports on oilsands?

I was really surprised when we did that survey of the coverage at how rarely the news reports explained what this task force even was. It was called a government-industry task force, which lent it credibility which to my mind it didn’t really have because it was 85 per cent industry. And only a few reporters bothered to examine what the source of this report was and where it came from and who put it together. It just gave it a credibility by saying it’s a government-industry task force. It just sounded like they got together and agreed on this.

I think so much of the reporting on the oilsands today is basically business reporting. Industry would argue that it’s mostly about the environment, and there’s so much coverage about environmental issues. But really, it’s mostly business reporting about the oilsands. Even when you look at the sources that reporters are relying on, they’re very often industry sources like CAPP or the various companies. Even with environmental stories, the sources inside them are still very often industry or government sources.

I was involved with doing some research a few years ago on journalists that were covering the oilsands: we were looking at their use of sources. And the most trusted sources were academic sources. But it was also clear that reporters depended on the industry a lot. And CAPP is organized to provide a whole bunch of data. That’s what they do.

This is obviously written within the context of the new Alberta NDP government. You conclude the report by identifying that Premier Rachel Notley has an outlook that is closer to Lougheed than it is to Klein. She had the chance to raise royalties, which she effectively passed on and has publicly pushed for new pipelines and oilsands expansion. Why did you conclude that Lougheed was more of her muse than Klein?

I think in some ways because she’s trying to separate herself out from the industry. Not completely, for sure. I think the fact she’s using revenue from the carbon tax and putting it into renewable energy projects is a way to subsidize the start-up of an industry, much as Lougheed did with the oilsands. She doesn’t have the kind of revenue that he was dealing with in those days. But she is trying to use public money for that.

She also has a working relationship with the industry to a certain extent in that she had them on the stage when she announced the Climate Leadership Plan, and they were mostly Canadian companies. They were homegrown companies, except for Shell. Which is something that Lougheed also tried to do: he really wanted to make oilsands development Alberta-centric. I think she’s trying to do that too.

I think the other thing she is doing that he didn’t do is she’s consulting much more in a general way with a wide variety of stakeholders, which Lougheed didn’t really do at all and Klein only consulted the industry stakeholders. She’s trying to widen that, I think, and make it more diverse.

Is there anything you wanted to add?

I just think it’s important to know the history and context so people understand why we are where we are. That it didn’t just spring up overnight, that it’s complicated and the politics of it are really complicated. In many ways, you can’t expect a new government to undo everything that’s been done in the last four decades when it comes to energy policy.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

When you cover energy and environment issues day in and day out, you’re prone to having some pretty geeky fantasies.

Case in point: over the holidays, my mind wandered to considering what advancements in Canadian energy policy I’d put on my wish list for 2015. I could have rattled off five or 10 things, but one kept rising to the top.

If I could wave my magic wand and make just one thing happen on the energy and environment front, what would it be? I’d like Alberta to start managing its oil wealth more responsibly.

The context: as 2014 draws to a close, Calgary public-school officials are asking the province to cough up the funding required to complete eight new schools and two modernization projects on time.

Right now, one-third of Calgary’s schools are running at more than 90 per cent capacity. All of the projects that require funding have been announced by Alberta Premier Jim Prentice since he took office in September.

“With the recent fluctuation in oil prices, we’re concerned,” Calgary Board of Education trustee Amber Stewart told Metro Calgary.

Let’s take a pause and reflect on how totally absurd this is for a moment.

Alberta has been developing one of the world’s largest sources of oil for more than 40 years and yet Calgary’s schools are nearly overflowing and the province doesn’t know if it’ll be able to locate the cash to build new ones because — surprise! — the price of oil changed.

So what’s wrong here? For starters, new infrastructure shouldn’t be tied to the price of oil. Even the Fraser Institute and the Canadian Centre for Policy Alternatives can agree that the Alberta government shouldn’t rely on non-renewable resource revenue to fund its operating expenses. (For the best run-down on this topic, read Money for Nothing: The Province vs. Non-Renewable Resource Revenue by Alberta Oil editor Max Fawcett.)

Fawcett references a 2013 Fraser Institute report that said to treat oil revenues as “analogous to sales tax receipts, and to spend them on projects that provide a flow of present services, would be to engage in unwise capital consumption, a drawing down of principal. Intuitively, the present generation would be selfishly eating away at a finite stock pile of wealth, rather than acting as custodians of ­nature’s gifts on behalf of all future generations.”

Another report by former Premier Ed Stelmach’s Council for Economic Strategy noted: “The true Alberta advantage is not the ability to create a low-tax environment by underwriting a significant proportion of government services with funds received from the sale of energy assets.”

Despite generating almost $190 billion in non-renewable resource revenues since 1980, the value of Alberta’s Heritage Fund was just $17.3 billion at the end of 2013 — paling in comparison to both Norway and Alaska’s non-renewable resource savings.

So here we are digging up two millions barrels of oilsands per day, and Prentice is warning that tough times could lie ahead as oil prices plunge below $75 U.S. per barrel. The province has projected that there could be a $7 billion shortfall in revenues next year as a result of the price crash.

Could these fiscal woes offer the window of opportunity needed for Albertans to wake up and see how poorly their oil wealth is being managed?

It took millions of years for all of that oil to end up trapped in sand in northern Alberta. We only get one shot at digging it up. It’s high time we start getting that right (and getting that right would inevitably mean going slower and collecting higher royalties).

The first step in changing the way Alberta manages (or mismanages) the oilsands is to untether government spending from oil revenues, thus starting to dismantle the government’s reluctance to fairly regulate industry. Right now you have a situation in which the Alberta government is reluctant to bite the hand that feeds it.

As an added bonus, keeping one-time resource wealth out of the province’s operating budget could weaken the government’s chokehold over its citizens (pretty easy to stay in power when you’re dishing out $400 “prosperity cheques”) — not to mention actually creating a savings fund for the future.

In an interview with The Tyee, Terry Lynn Karl, one of North America's foremost experts on the politics of oil, offered some wise words on the impact of oil revenue on governments. 

"Let me be clear: the commodity itself is neither good nor bad,” she said. “But the excessive profit involved from what Adam Smith called 'reaping what has not been sown' has led to a concentration of power and influence that makes it exceptionally difficult to fight the negative consequences of hydrocarbon dependence.”

The first step to breaking up that concentration of power and influence? Stop borrowing from the future and spending oil revenue like it's going out of style.

So here’s a little new year’s resolution suggestion for Prentice and the Alberta government: show your commitment to managing the oilsands responsibly by weaning yourselves off relying on one-time oil revenues to provide government services. If you showed that kind of courage, there may be short-term pain, but Albertans 50 years from now would still be clinking their glasses in your honour.

Photo: Jim Prentice by Connect 2 Canada

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.