This investigation also appears on Policy Note.

In a decision without precedent in its 25 years of existence, British Columbia’s Environmental Assessment Office has told Progress Energy that two massive unauthorized dams that it built will not have to undergo environmental assessments.

The decision comes after the company made an audacious request to the Environmental Assessment Office to have the two dams declared retroactively exempt from review — a request that was quietly granted by the province’s self-described neutral environmental regulator on July 17.

The exemption means Progress Energy is spared having the controversial dams subject to costly, public and potentially embarrassing reviews. The dams are described as “illegal works” in documents released by the Environmental Assessment Office in response to a Freedom of Information request from the Canadian Centre for Policy Alternatives (CCPA).

The office’s decision is the latest development in a saga that came to light in May 2017, when the CCPA first reported on the existence of “dozens” of unlicensed dams. Many of the dams had been built by Progress Energy Canada Ltd., the Calgary-based subsidiary of Malaysian state-owned petro giant Petronas, a major player in B.C.’s fracking industry.

Had the Environmental Assessment Office rejected Progress’s request, the company would almost certainly have faced questions about the numerous other dams that it built without permits and that were later found to have serious structural problems.

Full environmental assessments would also have likely shone a critical light on how B.C.’s energy industry regulator, the Oil and Gas Commission, allowed all the dams to be built in the first place.

Exemption ‘fuels public distrust’

Green Party MLA Sonia Furstenau says the Environmental Assessment Office’s decision to grant Progress’s extraordinary request fuels public distrust of the relationship between government and the powerful industries it regulates.

“Progress Energy being granted retroactive exemption is an example of how trust gets eroded,” Furstenau said. “People want to see companies and industry being held to account and to see rules being followed and enforced.”

“We have a long way to go to resolve this,” Furstenau said, adding:

“A revised EA [environmental assessment process] will help, reform of professional reliance will help, but we also need enforcement and monitoring, and we need far more transparency and accountability.”

In granting the exemptions — albeit with some conditions attached — the Environmental Assessment Office partially closes the file on one of the most extraordinary applications ever brought before it.

Progress Energy responsible for two violations of B.C. environmental rules

Since the Environmental Assessment Office’s inception 25 years ago, there has never been a case where a company built not one, but two major projects in violation of the Environmental Assessment Act and then asked the agency to rule retroactively that the projects did not have to be assessed.

Among hundreds of pages of documents released by the office in response to a Freedom of Information request, is an e-mail suggesting the agency initially hoped to fast-track the process, with an extremely short turnaround that would have given members of the public virtually no time to respond.

The same e-mail also suggests that the Environmental Assessment Office from the outset leaned toward granting Progress’s request rather than making an example of the company by ordering it to completely dismantle the illegal structures and restore the lands it had so dramatically altered.

“We are expecting the Request for Exemption to come this week, and then we will likely issue an exemption in March,” Environmental Assessment Office project assessment officer, Amy Thede, wrote in the e-mail, dated January 25, 2017.

But the Environmental Assessment Office’s hopes of putting a quiet end to the matter were undone when the CCPA published its first investigation in May 2017 on the existence of the two dams, which were part of a sprawling network of unlicensed dams that had been built by Progress Energy and its competitors across northeast B.C.

(All of the unlicensed dams were built to trap large volumes of freshwater used in brute-force natural gas industry fracking operations that have triggered numerous earthquakes in northeast B.C. Water use is up spectacularly at such operations, as documented recently by investigative journalist Andrew Nikiforuk.)

The CCPA investigation was widely covered by media outlets, and resulted in numerous e-mails and calls between government ministries and agencies including the Environmental Assessment Office and Oil and Gas Commission.

By this point, Progress was embroiled in a regulatory mess, having invested millions in dams it built without first obtaining the required permits and without the Oil and Gas Commission once intervening to stop it.

Numerous unpermitted water impoundments and dams have been built in northeast B.C. to service the oil and gas industry, in particular water-intensive fracking operations. Photo: Garth Lenz / The Narwhal

Structural problems with unregulated dams a danger

The company was responsible for roughly half of more than 50 unlicensed dams on public or Crown lands in the province, including the two structures for which it sought retroactive exemption from environmental review.

The largest of these two, the Lily Dam, topped out at the height of a seven-storey apartment building. The dam cost $3.42 million to build, according to documents released by the Environmental Assessment Office in response to the CCPA’s Freedom of Information request.

The second, the Town Dam, was as high as a five-storey building and cost $1.73 million. Just one year after that dam’s construction, however, serious structural problems surfaced.

“In 2013, sloughing had begun to occur along the west berm [an earthen wall of the dam] and Progress initiated a series of upgrades and repairs including the installation of lined concrete inlet pads. This required an additional $587,000 and was completed from June to September,” reads one document submitted by Progress to the Environmental Assessment Office in March of last year.

By then, numerous problems had surfaced at other Progress dams. So extensive were the problems that senior company personnel began holding regularly scheduled weekly meetings on the dams and the numerous water licences that the company had to apply for — also retroactively.

The most serious design flaws included either a complete lack of spillways or improperly built spillways. Spillways are critical components of properly built dams.

Their absence can result in reservoirs overtopping and dam walls collapsing, as occurred with horrific consequences in 2010, when a small earthen dam near the Okanagan community of Oliver burst, triggering a mudslide. That dam was much smaller than some of the unlicensed dams built by Progress and its competitors.

Testalinden creek mudslide south of Oliver, B.C., 2010. Photo: Darren Kirby via Flickr

Dams hold water for fracking operations

Progress’s dams are part of a vast network of infrastructure that includes natural gas well pads, wastewater pits, compressor stations and pipelines that the company built in anticipation of Petronas proceeding with plans to invest in a large liquefied natural gas (LNG) plant in Prince Rupert, the Pacific Northwest LNG project.

At the time many of the dams were built, the provincial government, then headed by Premier Christy Clark, had staked a lot of political capital on the Petronas project. Shortly after the 2017 provincial election, Petronas announced it would not proceed with the project.

Petronas subsequently announced, however, that it was a 25 per cent partner in another project, LNG Canada, led by Royal Dutch Shell.

That project officially got the green light at a signing ceremony in Vancouver on October 2 attended by company representatives, B.C. Premier John Horgan and Prime Minister Justin Trudeau.

Horgan had enthusiastically courted the consortium saying his government would provide up to $6 billion in tax credits to Shell and its partners over a 40-year period should they proceed.

While LNG is not explicitly mentioned in the Freedom of Information documents, it is clear that the Oil and Gas Commission flagged to the Environmental Assessment Office how important the broader context of the dams was.

Dams should not be ‘papered over’ with exemptions, commission hears

In one e-mail the Environmental Assessment Office noted how the Oil and Gas Commission had contacted it in the summer of 2016 to say that it knew of two dams that were “well over the trigger” for environmental assessments.

“Both belong to Progress Energy,” the e-mail reads, “so OGC has communicated that this is a high priority.”

In another e-mail the Environmental Assessment Office notes how the Oil and Gas Commission again stressed the importance of the company involved saying: “Progress is a significant proponent in oil and gas production and these two dams are part of large operations.”

Eventually after much delay, Progress submitted its formal exemption application to the Environmental Assessment Office on July 20, 2017. A discussion then ensued about how much — or little — time to give the public to respond.

Journalist Ben Parfitt visits an Encana dam and reservoir near Farmington, B.C. Photo: Garth Lenz / The Narwhal

“It needs to be long enough for the public to have sufficient opportunity to comment/participate, amplified by end of summer/early fall timeline,” Alex Denis, a project assessment officer, noted in an e-mail to Monica Perry, an Environmental Assessment Office executive project director. Denis’ e-mail also noted that the office could order a consultation period of up to 75 days.

But that did not happen.

The Environmental Assessment Office eventually settled on just a 29-day public comment period and issued no press release notifying the media or the public about the process. The consultation clock was set ticking on August 24, 2017, when most British Columbians were predictably turning their thoughts to the Labour Day weekend holiday and the busy start-of-school season to follow.

A number of organizations eventually learned of the Environmental Assessment Office’s move, and filed responses. Lengthy submissions were received from the Blueberry River First Nation, a Treaty 8 First Nation whose lands and waters were impacted by the dams; the environmental law firm Ecojustice, on behalf of its client Sierra Club BC; West Coast Environmental Law Association and the CCPA.

The Ecojustice letter noted that the Lily and Town Dams had been built and were operating in contravention of the Environmental Assessment Act and that the Sierra Club was also concerned that by allowing the dams to proceed, the Oil and Gas Commission itself may have contravened the Act as well.

“This is a serious situation that should not simply be ‘papered over’ by the retroactive, unlawful issuance of exemptions. This should be addressed by the EAO through the referral of these projects to the Minister [George Heyman, Minister of Environment and Climate Change Strategy] for environmental assessments by commissions or panels,” the Ecojustice/Sierra Club submission read in part.

Dams retroactively determined to have no significant impact

A little more than one month after public comments closed, the Environmental Assessment Office’s senior compliance and enforcement officer, Chris Parks, issued two orders to Progress Energy. The orders clearly noted that the company had violated the Environmental Assessment Act, which states that a company must not “construct, operate, modify, dismantle, or abandon” a major project, including tall dams, unless the company had first applied for and received a certificate.

Parks then ordered Progress to drain virtually all of the water impounded by both dams.

According to the Environmental Assessment Office itself, “when a major project is proposed in British Columbia, it must undergo an environmental assessment. This process ensures that any potential environmental, economic, social, heritage and health effects that may occur during the lifetime of a major project are thoroughly assessed.”

The Act allows companies to request that major projects they wish to build be exempted from undergoing such assessments. But the clear intent is that such applications are made well before projects are built, not years after the fact.

In the ensuing months after Progress’s application was received, members of a large “working” group appointed by the Environmental Assessment Office to evaluate Progress’s proposal met to consider the application. Group members included representatives from several Treaty 8 First Nations, the Ministry of Energy, whose deputy minister is a director on the Oil and Gas Commission’s board, the Oil and Gas Commission itself and the City of Fort St. John, which is home to several energy company branch offices, including Progress Energy.

On July 17 of this year, the Environmental Assessment Office issued its final decision and posted it online.

“I have determined that the project will not have any significant adverse environmental, economic, social, heritage or health effects and that therefore an environmental assessment certificate is not required,” Kevin Jardine, associate deputy minister in the Environmental Assessment Office wrote in two letters to Jarred Anstett, Progress Energy’s regulatory advisor.

But the company had to meet a number of conditions before resuming operations at the dams.

Among other things, it had to hire a “qualified professional” to come up with plans that the company would then have to implement, including plans to minimize erosion and to ensure that to the full extent possible the dam’s reservoirs were not allowed to overfill.

(By then it was known that at another Progress Energy dam the company’s jerry-rigged efforts to drain an overfilled reservoir — by pumping water onto the open ground below — had almost triggered an environmental disaster at a nearby fish-bearing stream.)

The company was also required to file detailed water use reports once it resumed operation of the dams and to fully decommission the dams and rehabilitate lands when operations eventually ceased.

All of this was to be coordinated between the company and the Oil and Gas Commission, the same agency that had allowed the dams to be built in the first place.

Following the decision, the CCPA spoke with Environmental Assessment Office officials, including Teresa Morris, who was the lead official on the Progress file, Alex Denis, a project assessment officer, and Michael Shepard, an Environmental Assessment Office executive project director.

Although the Environmental Assessment Office received Progress’s request under the extraordinary circumstances of the dams already being built, the office insists that the same evaluation process was followed as if the dams had not yet been built.

Progress Energy Lily Dam. Photo: Ben Parfitt

On only two previous occasions has the Environmental Assessment Office dealt with major projects being built or partially built without an environmental certificate first being received or an exemption being sought.

In one case — a municipal water supply dam expansion in Campbell River — the project was only partially built before coming to the office’s attention. An exemption was subsequently granted.

In the other, a forest company in the Quesnel region, Dunkley Lumber, fully completed a new sawmill expansion without first notifying the Environmental Assessment Office. It too later received an exemption.

Progress Energy could face fines, jail terms

The Progress file, however, is unique, not only because it involved two fully built structures, but because of the wider network of unlicensed dams built by the company. Had the Environmental Assessment Office chosen to, it could have ordered the company to not only undergo full environmental assessments of both dams, but all the other “related” unlicensed dams that the company had also built.

Asked whether it had powers to require Progress Energy to post bonds to fully cover all dam decommissioning and reclamation costs, the Environmental Assessment Office said it did not and that it would fall to the Oil and Gas Commission to make that call.

As for the dams being built in violation of the Act, it now falls to the office’s compliance and enforcement staff to decide whether to recommend to Crown Counsel that fines and/or jail terms be sought. Under current regulations, the Environmental Assessment Office has up to three years to recommend to Crown counsel that penalties be sought.

Under the regulations, a company found guilty of violating the act by building major projects without approval is liable to pay a fine of up to $100,000 for a first offence and $200,000 for a second. Jail terms for company personnel of up to six months can also be sought.

The regulations stipulate that such penalties must be sought within three years of the Environmental Assessment Office learning that possible offences had occurred.

Since the Environmental Assessment Office learned of the dams’ existence in the summer of 2016, less than one year remains to initiate such charges.

In the past decade, according to a compliance and enforcement database maintained by the provincial Ministry of Environment, there have been 19 instances in which the Environmental Assessment Office has ordered companies to take corrective action at projects where the agency has jurisdiction.

None of those orders were accompanied by fines and no company personnel were charged with wrongdoing as a result of violating the act — an outcome that almost certainly has not gone unnoticed by Progress Energy and others.

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.

This article was originally published by the Canadian Centre for Policy Alternatives.

The provincial government has ordered Progress Energy to drain virtually all of the water trapped behind two massive dams the company built in violation of key provincial regulations.

The company was told on October 31 to drain all but 10 per cent of the water stored behind its Town and Lily dams near the Alaska Highway north of Fort St. John by Chris Parks, assistant director of compliance and enforcement with B.C.’s Environmental Assessment Office (EAO).

The order comes after Progress Energy filed an extraordinary application this summer with the EAO asking the provincial environmental regulator to retroactively “exempt” the two dams from required environmental assessments. Both dams are higher than five-storey buildings.

By law, Progress should have filed its exemption applications well before the projects were built, not after. Progress built its Town dam in 2012 and its Lily dam in 2014.

Both are part of a vast network of unlicensed dams that the Canadian Centre for Policy Alternatives (CCPA) first reported in early May have been built across northeast B.C. by fossil fuel companies to trap massive amounts of freshwater used in gas drilling and fracking operations.

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

Numerous organizations, including the Blueberry River First Nation (BRFN), on whose traditional territory the dams were built, have written to the EAO objecting to Progress’ exemption request.

“BRFN has been repeatedly sounding alarm bells to the Crown (including through affidavits filed in court) about the diminished water quantity in our territory,” wrote Blueberry River First Nations lands manager Norma Pyle. “We have been watching lake levels drop, muskeg disappear, mineral licks dry up and streams reduce to small versions of their former selves.”

"Blueberry’s concern goes beyond these two dams to the failure of regulatory oversight in their territory — it’s not just these two dams, but dozens of them,” Blueberry River legal counsel Maegan Giltrow added in a separate e-mail statement.

“This is in the face of Blueberry’s repeated concerns to the Crown about the diminishing water quality and quantity they are seeing. This September the Blueberry River itself ran dry — Blueberry members haven’t seen that before. Meanwhile, hundreds of thousands of cubic meters of freshwater in their territory is being illegally impounded for oil and gas operations.”

“And Blueberry had to learn about the problem from media reports — where was the regulator? The Nation still doesn’t have answers to the questions it has put to the Oil and Gas Commission about all the illegal dams and water use."

#Fracking Company Ordered to Drain Two Unauthorized #Dams in B.C.’s Northeast https://t.co/uc9uj2v8y0 #bcpoli #progressenergy #petronas @BCOGC

— DeSmog Canada (@DeSmogCanada) November 10, 2017

Public Inquiry into Fracking Needed

The presence of the dams — and a host of additional issues relating to how Progress Energy and other fossil fuel companies use the water stored in them for their fracking operations — are among the concerns that triggered a call this week by 17 organizations (including the CCPA) for a full public inquiry into natural gas industry fracking operations in B.C.

In addition to the proliferation of unlicensed dams, the call for an inquiry was prompted by troubling events in the northeast of the province, including evidence of powerful earthquakes triggered by fracking, escalating water usage at B.C. fracking operations, rapidly increasing methane releases at gas well sites, local health impacts and ongoing impacts to First Nation lands.

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

The groups encouraged the government to examine the impacts of fracking and related operations on First Nation lands and resources in particular.

“We are deeply troubled that this dam-building free-for-all occurred on First Nation lands, that First Nations were not fully consulted about the true size and extent of these dams, and that our Indigenous Title, Rights and Treaty rights are still completely ignored or denied. There are still no substantive or meaningful opportunities to fully participate in decisions around how water resources are managed in our respective territories,” said Grand Chief Stewart Phillip, President of the Union of B.C. Indian Chiefs.

“We need a credible, strong, independent inquiry to get to the bottom of this.”

The Environmental Assessment Office has yet to say how it will respond to the Blueberry River First Nation’s letter and those of many other organizations urging the government to reject Progress’ application for exemptions. David Karn, a senior public affairs officer with the Ministry of Environment and Climate Change Strategy, said in an e-mail that he expects the EAO to make a decision about Progress’ exemption request “in early 2018.”

Both dams are considered “major projects” under B.C.’s Environmental Assessment Act because both exceed a critical height threshold of 15 metres. The Lily dam dramatically exceeds that threshold. It is 23 metres high or as tall as a seven-storey apartment building.

B.C.'s Environmental Assessment Office has ordered Progress Energy to drain almost all of the water from this unauthorized dam. Photo: Ben Parfitt

Build it First, Ask for Permission Later

Both dams are among more than 50 large earthen structures built by energy companies on Crown or public lands in northeast B.C. that are also subject to Treaty 8, the 1899 agreement reached between the Crown and the region’s First Nations.

Most or all of the dams were built without the companies first obtaining key provincial authorizations such as water licences. In addition, engineering specifications appear to never have been submitted to and approved by provincial authorities before the dams were constructed.

Dam safety and water licensing officials with the provincial Ministry of Forests, Lands and Natural Resource Operations are also investigating additional fracking dams that have been built on private lands, including farmlands within the provincial Agricultural Land Reserve. B.C.’s ALR was created in 1973 to preserve farmland.

It now falls to B.C.’s Oil and Gas Commission (OGC), which allowed the dams to be built without the proper permits first being obtained, to retroactively review dozens of pending water licence applications, and to assess the health, safety and environmental risks posed by dams that may not have been built to proper engineering standards.

The first batch of retroactive water licence applications came in late December last year when Progress Energy applied for 13 such licences on a single day.

Each application was for water rights at dams that had already been built and that were already impounding water. The applications did not include the water licence requests at the two dams currently under review by the EAO.

Recently, investigative journalist and author Andrew Nikiforuk reported how the OGC sent staff on a flyover of 51 unlicensed dams following publication of the CCPA’s initial research in May.

The inspections revealed serious problems at seven dams, or 14 per cent of those visited.

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

Progress Energy built five of the seven problematic dams (these five do not include the two before the EAO) and ConocoPhillips built the other two.

Noted problems included erosion, slumping and water overflowing the top of some dams.

According to documents obtained through numerous Freedom of Information requests filed by the CCPA, all of the unauthorized dams were purpose-built to trap freshwater used in fracking operations, where huge quantities of water are pumped under intense pressure to fracture or crack open deep rock formations so that trapped methane gas is released.

During a Progress Energy fracking operation north of Fort St. John in 2015, 160,000 cubic metres of water — the equivalent of 64 Olympic swimming pools — was pressure pumped underground at a fracking operation, triggering a 4.6 magnitude earthquake.

Dam Safety at Issue

The EAO’s order to Progress requiring it to drain its Town and Lily dams does not speak directly to the issue of how safe or unsafe those structures may be. Nor does it speak to the broader question of how the dams came to be built under the OGC’s watch, or whether or not the dams may be at risk because of ground motions triggered by nearby fracking operations.

The order notes, however, that “an environmental assessment certificate has not been issued for the dams” and because a certificate has not been issued, the Environment Minister “may order that the construction, operation, modification, dismantling, or abandonment of the project cease, either altogether or to the extent specified by the Minister, until the proponent obtains an environmental assessment certificate.”

Progress is then ordered to:

1. Maintain water volumes stored by the dams at no more than 10 per cent of live storage capacity unless otherwise directed by the EAO’s compliance and enforcement division/branch.  
2. Monitor and record water volumes on a weekly basis during frozen conditions and on a daily basis during conditions where flowing surface water is present, and provide that information to EAO compliance and enforcement upon request.

Following this order, Progress Energy’s president and CEO Mark Fitzgerald issued a statement to the Globe and Mail claiming “that it was his own company that identified problems with some of its dams — including the failure to obtain proper authorizations — and brought the findings to the attention of the provincial government.”

The article continued: “He said an engineering review of the company’s water-holding facilities found no structural issues, but noted that some were larger than permits allowed.”

"We own those mistakes, and are working with the [Oil and Gas Commission] to correct them," Fitzgerald said to the Globe and Mail.

“What's important to me is that we will not make these mistakes again. We're committed to working closely with the regulators and to managing our operations in an environmentally responsible manner."

An unauthorized Progress Energy dam where millions of gallons of freshwater was found impounded in early April. It is among “dozens” of unpermitted dams spread across northern B.C. Photo © Garth Lenz, all rights reserved.

Self-reporting Doubts

But records obtained from the Oil and Gas Commission through the CCPA’s various Freedom of Information requests paint a different picture.

Progress Energy did not suddenly arrive at the conclusion that some of its dams were built without the required authorizations.

Rather, the company — along with all its competitors operating in northeast B.C. — was told by the OGC in May 2016 to submit lists of all dams that it had built. Why the OGC apparently didn’t know the answer to the question is not clear.

Two months later, after the companies had reported back to the Commission, then OGC chief hydrologist, Allan Chapman, wrote an e-mail to the Commission’s vice-president of applications, James O’Hanley, and its vice-president of operations, Lance Ollenberger, stating:

“Hi James and Lance. Progress Energy has confirmed that they built two Freshwater Storage Sites that exceed the EA Reviewable Projects Regulation of 15 metres. In their submission from Wednesday, they indicate that one is 23 metres, which is quite breathtaking. I have advised them they need to contact the EAO.”

So clearly, the company did not voluntarily approach the Environmental Assessment Office. It was compelled to do so by the regulator, which should have prevented the dam from being built in the first place.

Several problems with the Lily dam were also subsequently noted by Progress Energy in its own commissioned engineering report submitted to the EAO. The Lily Dam Project Description document noted signs of seepage, or water leaking from behind the dam’s walls, and improperly graded water outlets for the dam. According to the engineering report, both issues had the potential to cause severe damage to — or failure of — the dam, if left unaddressed.

Whether those troubling words of warning influenced the Environmental Assessment Office’s decision to order Progress to drain most of the water from its two largest dams is unknown.

If the company's application for exemption is ultimately denied and the two dams are finally subjected to a full provincial environmental assessment, the answer to that question and more may finally see the light of day.

Even so, this case drives home why B.C. needs a full public inquiry into fracking activities.

Image: The Lily Dam wa built by Progress Energy without a provincial environmental permit. Photo: Progress Energy

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This article originally appeared on The Tyee.

At least seven of 51 large dams built by the province’s shale gas industry in northeastern B.C. were not safe and required “enforcement orders” to comply with the law.

Almost six months after an independent report raised serious questions about the legality and safety of earth dams built to hold water for the fracking industry, the province’s energy regulator now reports it is taking action.

The Oil and Gas Commission recently issued a bulletin saying it had inspected 51 dams northwest of Fort St. John last May and found “some issues” at seven different structures.

These issues included water spilling over their top, erosion at the base and potential failure representing a hazard to the environment, First Nations and energy workers, according to the orders issued by the commission.

The commission ordered Progress Energy to reduce water volumes by 50 per cent at five dams containing between 4.4 million and 26 million gallons of water.

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

The commission says it has identified 51 water storage sites holding more than 2.2 million gallons that qualify as regulated dams under B.C.’s Dam Safety Regulation. The dams are operated by 10 oil and gas companies.

The industry funded energy regulator also ordered ConocoPhillips to empty all the water from two dams deemed unsafe and insecure.

Both ConocoPhillips enforcement orders noted “that allowing the structure to fill with water above the native grade elevation creates a potential for failure of the dam and a large release of material downslope.”

Inspectors also found a variety of problems at five dams built by Malaysian-owned Progress Energy, including erosion, slumping and water overflowing the top of the dam.

In one case water levels came to within 50 centimetres of the top of the dam during a recent storm, “creating risk of overtopping.” In addition, “the existing closed-culvert spillway on the structure is insufficient to provide adequate outflow in the event of a large inflow from a storm rainfall event,” inspectors found.

In July the commission ordered Progress Energy to reduce water volumes in the structure because if it was more than half full there was “potential for structure failure.”

The OGC says the company has complied with the order at all five dams.

In 2015 Progress Energy triggered a 4.6 magnitude earthquake, one of the largest earthquakes attributed to the brute force technology of hydraulic fracturing, while injecting 35 million gallons of water, chemicals and sand over a three-week period in 132 stages. Each stage creates fractures in rock deep underground, allowing gas to flow to wells.

Increasing volumes of water have been used in fracking in the north Montney shale gas basin. Between 2012 and 2015 the mean amount used per well increased 62 per cent to 3.6 million gallons, the commission told The Tyee.

The regulator is also playing catchup in terms of providing legal authorization for the structures.

Location of 12 Progress Energy dams. Dams under review at the time of Ben Parfitt's original story on unauthorized dams in May 2017 are marked red. Yellow indicates existing Progress Energy dams that were constructed in advance of the company's water licence applications submitted in December of 2016.

The OGC’s recent bulletin asks “the operators of water storage structures to submit the necessary applications, including assessments and any necessary design modifications done by qualified engineers.”

As companies submit their designs, the commission says that it is “working to review all of them to ensure timely decisions are made in accordance with applicable regulatory and legal requirements.” It has hired more staff to address safety at the dams — a subject that now has its own OGC website.

But The Tyee has learned that OGC only released its bulletin and the enforcement orders to the public on Sept. 29, five days after Parfitt filed a freedom of information request on the same topic to the OGC.

“It is deeply troubling that orders to companies on structures showing signs of failure are not issued publicly at the time, but only five days after a freedom of information request,” said Parfitt in an interview.

“Why didn’t the OGC publish their enforcement orders when they issued them back in May? I think there is a problem with transparency and integrity here,” added Parfitt.

Parfitt’s original report on the proliferation of unauthorized dams to store water for fracking operations was released last May by the Canadian Centre for Policy Alternatives.

The document reported that many of the dams were unauthorized and that at least one had failed during extreme weather.

The OGC denies that its recent bulletin or publication of enforcement orders has anything to do with Parfitt’s reporting or queries.

“The Commission has been working on a compliance and enforcement webpage for a few months — it was ready to put in production in late September,” said Phil Rygg, director of public and corporate relations.

Rygg also denied that the CCPA report prompted the commission to inspect the dams.

“Once we were granted the authority to inspect dams under the Water Sustainability Act last year, we started working with the Ministry of Forests, Lands, Natural Resource Operations and Rural Development to determine the number, location and owners of dams used in the oil and gas sector, and notified industry,” said Rygg in an email.

“Due to snowpack levels, we weren’t able to investigate each dam until the snow had fully receded in the northeast earlier this year, which was mid-May in the Montney region, and mid-June in the Horn River Basin area.”

But Parfitt says that’s not true.

“The suggestion that it was the enactment of the Water Sustainability Act that compelled the OGC to move is a smokescreen,” he said. “The dams were all built when the old water act was in place, and many of them were built in contravention of that act because many of them impounded freshwater.”

“Both the OGC and the companies and [the lands ministry] for that matter seem to want to hide behind the ‘oh, the legislation changed’ argument. That’s clearly false,” added Parfitt.

Parfitt also found it “stunning” that the OGC would claim that a flyover of the 50 dams was delayed because of snow.

An unauthorized Progress Energy dam where millions of gallons of freshwater was found impounded in early April. It is among “dozens” of unpermitted dams spread across northern B.C. Photo © Garth Lenz, all rights reserved.

His report came out on May 3. On May 10 the commission issued a statement warning companies of potential problems due to extreme heavy rains.

“A week later they do the flyover and find troubles at seven of 50 dams, or 14 per cent of all facilities investigated,” said Parfitt.

Seismic experts, such as Gail Atkinson, a professor at Western University, also expressed alarm at the ad-hoc construction of dams in an area experiencing a sustained rise in man-made earthquakes due to hydraulic fracturing.

Atkinson says earthquakes triggered by hydraulic fracturing can exceed the natural quake hazard, posing unanticipated risks to dams and other infrastructure.

“Any unauthorized dam of significant size is a source of concern,” Atkinson told The Tyee.

“Dams are supposed to be highly regulated for a reason,” she said. “The Canadian Dam Safety Association puts out extensive guidelines on the engineering requirements for such structures — though they note that the standards do not actually have the force of law.” (Water and dams are provincially regulated.)

“I would expect the province to take a firm stand on authorized dams of significant size that could pose a safety or environmental hazard,” Atkinson said. “To use an analogy, if you constructed a five-storey building without getting a building permit, how would that go over?”

In a related development the provincial Environmental Assessment Office announced that it is now considering an unusual request from Progress Energy to exempt two large dams, the Lily and Energy Town structures, that the company built in 2012 and 2014, from provincial environmental assessments.

The Lily dam is seven storeys high while the Energy Town structure is five storeys high.

The Environmental Assessment Act clearly states that the EAO must assess all major projects before they are built, and not after the fact.

BC Regulator Finds Numerous #Frack Water Dams Unsafe, At Risk of Failure https://t.co/93KXPLFJaV #bcpoli #fracking @BenParfittCCPA @BCOGC

— DeSmog Canada (@DeSmogCanada) October 17, 2017

The CCPA report found due to their size the two dams should have triggered an automatic review by the province’s Environmental Assessment Office before construction. But Parfitt found that the province failed to conduct a review before the dams were built.

In a recent submission to the Environmental Assessment Office Parfitt noted “the applications for an exemption from an environmental assessment were received in July 2017, more than five years after the Oil and Gas Commission gave relevant approvals for the projects, more than five years after the completion of the Town dam, and roughly three years after completion of the Lily dam.”

“B.C.’s Environmental Assessment Act does not contemplate a situation in which projects are illegally built and an exemption is subsequently sought,” he added.

In a Sept. 21 letter, Ecojustice, representing the Sierra Club of British Columbia Foundation, also argued that proper environmental certificates for the dams “should have been sought, environmental assessments conducted, appropriate conditions and mitigation required, and EACs [Environmental Assessment Certificates] granted prior to construction, if construction was allowed at all.”

Ecojustice has asked the Environmental Assessment Office to deny the exemption request and refer the matter directly to the environment minister. 

Image: Progress Energy Lily Dam is the largest dam in northeastern B.C. According to the company the dam has a berm height of 22.89 metres. Progress Energy has 29 dams in B.C, the average height of which is reportedly 5.33 metres. Photo: Progress Energy 

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Malaysia’s Petronas has cancelled plans to build the Pacific NorthWest LNG plant on Lelu Island near Prince Rupert, B.C., in a move seen as a major setback for B.C.’s LNG dreams and as a major win for those concerned about climate change and salmon habitat.

The project would have involved increased natural gas production in B.C.’s Montney Basin, a new 900-kilometre pipeline and the export terminal itself.

Here’s what you need to know about Tuesday’s announcement.

1) Why did Petronas decide to cancel the project?

In a press statement about the investment decision, Petronas cited “changes in market conditions.”

“We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision,” said Anuar Taib, chairman of the Pacific NorthWest LNG board.

Just a few years ago, B.C. was banking its future on the fate of about 20 proposed LNG facilities — based on the idea that our natural gas would be super-cooled into liquid and exported by ship to lucrative Asian markets. But it’s widely acknowledged that B.C. came late to the party, with the U.S. and Australia beating Canada to the punch.

The B.C. projects were predicated on exporting low-cost gas to Asia where prices were as much as five times higher than in North America in 2013. But by 2016, prices had plunged and have shown little sign of increasing.

Former premier Christy Clark had promised three LNG plants by 2020, 100,000 jobs in the LNG industry and a $100 billion Prosperity Fund. As it stands, it looks like only one small plant, Woodfibre LNG in Squamish, may go ahead.

The B.C. NDP, now in power, has opposed the Pacific NorthWest LNG proposal but supports the LNG industry generally speaking, provided it meets certain conditions.

2) Why is exporting liquefied natural gas bad for the environment?

The key concerns about Pacific NorthWest LNG have been salmon and climate change.

On the salmon front, the project was sited in a location the federal government had studied decades ago and found to be unsuitable for industrial development due to its importance to juvenile salmon.

“Out of all the places that you could imagine in the area, it is the worst possible place in terms of risks to fish,” Jonathan Moore, Liber Ero chair of Coastal Science and Management at Simon Fraser University, told DeSmog Canada last year.

About 300 million juvenile salmon rear in the Skeena estuary every year at the critical moment when they graduate from fresh to salt water. The Skeena salmon run is worth more than $110 million annually.

On the climate change front, the Pacific NorthWest LNG plant would have been the single largest source of emissions in the country, emitting as much carbon dioxide equivalent as 1.9 million cars? How on earth would it have been that belchy?

Well, turning natural gas into a liquid is a hugely energy intensive process that consumes the equivalent of about 20 per cent of the gas along the way. To turn gas into a liquid it must be cooled to -160°C, which involves running giant compressor stations 24/7. That reduces the volume of the gas by more than 600 times. It then gets “regasified” (that’s really a word in the LNG world) on the other end.

Pacific NorthWest LNG was going to use natural gas to power that whole crazy process, making it a particularly egregious polluter. If built, Pacific Northwest would have accounted for between 75 and 80 per cent of total allowable emissions under B.C.’s 2050 climate target.

Despite all this pesky science, it has been a favourite BC Liberal talking point that exporting LNG will reduce emissions in other parts of the world — an argument that has been thoroughly debunked.

3) What does this all have to do with the Site C hydro dam?

Nothing. And everything.

Let us explain. It was the subject of much debate, but Pacific NorthWest LNG ultimately was going to rely on its own gas, not electricity, to run its compressors, so it wasn’t going to be a huge electricity consumer.

But at least three new transmission lines have been built in B.C.’s northeast to service the natural gas industry.

“In the name of making ‘dirty’ natural gas companies marginally less so, BC Hydro at the behest of the provincial government is aggressively pursuing a policy of providing ‘clean’ hydroelectricity to the gas industry so that its greenhouse gas emissions are lowered here in B.C.,” wrote Ben Parfitt of the Canadian Centre for Policy Alternatives last year.

“It is this policy that provides the only credible explanation for why the Crown corporation is rushing to build the controversial dam at this time.”

Which is all to say: the entire narrative around the need for the Site C dam has relied heavily on the development of B.C.’s natural gas industry. Now the future for an LNG industry in B.C. looks bleaker than ever, it further calls into question the demand for the $8.8 billion publicly funded dam.

4) What does this announcement mean for B.C.’s natural gas industry?

That’s unclear right now, but the Petronas press release stated that the company and its North Montney Joint Venture partners “remain committed to developing their significant natural gas assets in Canada and will continue to explore all options as part of its long-term investment strategy moving forward.”

But how without a West Coast export facility? Well, TransCanada announced in June that the company would spend $2 billion to expand its NOVA Gas (NGTL) system to connect northern B.C. and Alberta natural gas producers to “premium intra-basin and export markets.”

That’s code for: our gas is going to go east, not west.

The North Montney Joint Venture is operated by Progress Energy Canada Ltd (a wholly owned subsidiary of Petronas) — the company responsible for building at least 16 unauthorized dams in northern B.C. to trap hundreds of millions of gallons of water used in its controversial fracking operations.

Other partners in the joint venture? Japan Petroleum Export Corporation (JAPEX), PetroleumBRUNEI, IndianOil Corporation (IOC) and Sinopec-China Huadian.

Their goal? To develop the resources in the North Montney formation located along the foothills of the Rocky Mountains in northeast British Columbia.

They own approximately 800,000 acres mineral rights in the North Montney with more than 52 trillion cubic feet of reserves and contingent resources, and more than 15,000 identified drilling locations. This is all “unconventional” gas, which means it’ll be accessed via fracking.

5) Wasn’t the project already approved?

Pacific NorthWest LNG was approved by the federal government in a controversial decision last September.

The company — wholly owned by the Malaysian government and boasting a questionable human rights record — had lobbied the federal government 22 times between February 1 and April 21, 2016, including meetings with Environment Minister Catherine McKenna and her chief of staff Marlo Raynolds.

It recently came to light in court documents that the feds hadn’t even considered the cumulative climate impacts of the project while approving it and had actively decided not to impose conditions on the project to limit carbon pollution.

The approval was condemned by environmentalists as a licence for Canada to break its climate commitments. It was also broadly regarded as a horse trade, wherein the provincial government got the approval it wanted in return for the federal government getting the approval it wanted (B.C.’s approval of the Kinder Morgan Trans Mountain pipeline — which the new NDP government says it will fight with “every tool available.”).

Pacific Northwest LNG donated more than $18,000 to the BC Liberals between 2014 and 2017, while negotiating a reduced tax rate and reduced hydro fees.

Indigenous nations had wrestled with internal divisions over whether or not to support the project, but Lax Kw’alaams had rejected a $1 billion pay-off from Petronas. In Gitxsan territory, the Madii Lii protest camp had strategically blocked the path of the proposed pipeline, the Prince Rupert Gas Transmission (PRGT) pipeline

The pipeline had received provincial approval, but hit a roadblock last week when a federal court ruled the National Energy Board had made a legal mistake in not considering whether the pipeline was under federal jurisdiction since it was explicitly for an export project.

— With files from Christopher Pollon and James Wilt

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Toxic heavy metals, including arsenic, barium, cadmium, lithium and lead, are flowing unchecked into the Peace River following a series of unusual landslides that may be linked to B.C’s natural gas industry fracking operations.

The landslides began nearly two years ago and show no sign of stopping. So far, they have killed all fish along several kilometres of Brenot and Lynx creeks just downstream from the community of Hudson’s Hope.

As plumes of muddy water laced with contaminants pulse into the Peace River, scientists and local residents are struggling to understand what caused the landslides and why they have not ceased.

Hudson’s Hope mayor Gwen Johansson is also worried about a broader question raised by the ongoing pollution. The toxic metals are entering the Peace River in a zone slated to be flooded by the Site C dam. That zone could experience nearly 4,000 landslides should the dam be built and the impounded waters begin to rise in the landslide-prone area.

The landslide estimate is contained in a voluminous consultant’s report to BC Hydro, which under the direction of Premier Christy Clark is rapidly advancing work at Site C in an effort to push the project past “the point of no return.”

“If this much damage can result from tiny Brenot Creek, what happens to the reservoir if we get thousands more landslides?” Johansson asks.

No definitive cause has yet been identified to explain what caused the Brenot Creek landslides. But one possibility is that they were triggered or exacerbated by natural gas industry fracking operations, in which immense amounts of water are pressure-pumped deep underground with enough force to cause earthquakes. Fracking is known to cause unanticipated cracks or fractures in underground rock formations, allowing contaminated water, natural gas, oil and other constituents to move vast distances undetected.

Such brute-force operations happened frequently in the years immediately before the first slides were noted at Brenot creek in August 2014.

Between July 2010 and March 2013, a dozen earthquakes ranging between 1.6 and 3.4 in magnitude occurred in the Farrell Creek fracking zone, about eight kilometres away from Lynx and Brenot creeks. (A small number of other fracking operations also occurred closer to the creeks, but do not show up in the seismographic record.)

Requests to B.C.’s Oil and Gas Commission or OGC, and information gleaned from non-redacted parts of Freedom of Information requests to BC Hydro, indicate that by March of 2013 both the provincial energy industry regulator and the Crown-owned hydro provider were increasingly concerned about “events” at Farrell Creek.

“Right now our focus is on getting the improved seismographic network up and running. We will continue to monitor and study all cases of induced seismicity [earthquakes] in NEBC [Northeast British Columbia],” Dan Walker, the OGC’s then senior petroleum engineer wrote in an email to Andrew Watson, BC Hydro’s engineering division manager, on March 7 of that year. The email was written two days after the last of the 12 earthquakes occurred at Farrell Creek.

By the time of that earthquake, Talisman Energy, the biggest natural gas company then operating at Farrell Creek, knew that wastewater was disappearing below one of four massive “retention ponds” that it had built to store millions of litres of highly contaminated water from its fracking operations.

A detailed investigation subsequently paid for by Talisman and conducted by Matrix Solutions, an environmental engineering firm, notes that Talisman’s “leakage management system” detected that contaminated water was escaping from between two liners that were supposed to trap and prevent Pond A’s toxic brew from polluting the ground and water around it.

Pond A had likely leaked for five months beginning in January 2013. In June of that year, Talisman drained Pond A and confirmed that the leaks had, indeed, occurred.

The wastewater ponds and gas reserves in the region are now owned by Progress Energy, owned in turn by Petronas, the Malaysian state-owned petro giant that the provincial government is eager to see build a liquefied natural gas terminal at Lelu Island near Prince Rupert. The Oil and Gas Commission, which regulates B.C.’s oil and gas industry, subsequently ordered Talisman to drain the remaining three ponds. At that point, it was discovered that Pond D was leaking toxic wastewater too.

Among the toxic substances found in water samples collected from groundwater sources underneath Talisman’s faulty storage pits were arsenic, barium, cadmium, lithium and lead, the same hazardous compounds that are found in the billions of fine sediments that continue to turn the waters of Brenot and Lynx creeks a muddy brown and enter the fish-bearing Peace River.

The Matrix Solutions report released in May 2015 noted that the release of toxic metals into the environment was predictable. By digging the huge pits and exposing massive amounts of unearthed material to the air, “surface and groundwater acidification” were potential risks, Matrix said.

“The primary concern for receiving environments related to acidic groundwater is the potential for release of trace metals,” the report warned.

Whether or not the fracking-induced earthquakes or the failures at Talisman’s waste ponds played any role in events at Brenot and Lynx creeks is unknown. To date, no studies have been done in the region to determine how and where water moves below ground. In its report of more than 2,200 pages, Matrix noted a troubling lack of such information. “Flow direction is not documented,” the Matrix report said. However, the report went on to say that groundwater generally moves from “topographic highs toward topographic lows.” In other words, it moves downhill.

Below the Farrell Creek fracking zone, the waters of Lynx and Brenot creeks continue to be so full of contaminants that a person’s finger placed just a millimeter below the surface disappears from view. The pollution caused one local farmer to quip at the time that his “cows are not supposed to chew the water.”

Martin Geertsema, a geomorphologist with the provincial Ministry of Forests, Lands and Natural Resource Operations in Prince George, says he has never seen anything quite like what has occurred at the slide site since August 2014.

“We’ve got a camera pointed at the landslide. I’d like to install a few more to try to figure out what the heck is going on. It’s very unusual. There’s nothing quite like this,” Geertsema said in an interview.

“At other slide sites the water flows finished in a few days. The difference here is it just keeps going. Water is coming out of the base and because the water is eroding soil from the base it leads to cliff collapse. And the cliff is composed primarily of sand and some clay. And when it collapses, the debris just flows.”

Geertsema notes that the region is known for naturally occurring landslides, many of which show signs of “considerable antiquity.” However, today’s slides are occurring in a region with some of the most extensive and intensive industrial land-uses anywhere in B.C., including two major hydroelectric dams and reservoirs and water-intensive natural gas fracking operations that the OGC has concluded triggered clusters of earthquakes in various locales in northeast B.C.

When the slides at Brenot Creek first began, the District of Hudson’s Hope advised local residents not to drink the water. The advisory was followed by a similar one issued by the provincial government. The town’s council later paid a hydrogeologist and consulting water expert, Gilles Wendling, to collect and test water samples at the slide site to determine how toxic the water was.

Mayor Johansson remains disturbed by the event’s duration, its origins and most of all its timing. At the time that the first landslide was discovered, the region had endured weeks of extremely hot and dry weather. A water-triggered landslide in August was, Johansson felt, highly unusual.

In January 2015, Johansson wrote an article in a newsletter published by the District. During a recent interview she said her views remain unchanged.

“I have contacted MoE [B.C.’s Ministry of Environment] to ask what further steps they are planning and to find out when the advisory might be lifted. The MoE representative said they have no plans to do anything further, other than file a report. He said he expected that eventually the creek would cleanse itself.”

“That seems pretty inadequate. Test results show levels of exotic metals such as lithium, barium, cadmium, and others to be significantly above guidelines. They are not normally found in shallow ground or surface water. They have not shown up at those levels in any previous testing in the area, and I am not aware of similar readings being found anywhere in the northeast of the province. Some of the metals are toxic. They pose a risk to human and animal health.”

The OGC, which visited the site shortly after the slides began, concluded that the contaminants in the water were commonly found in the soils in and around the creek and that a natural spring was the source of the groundwater.

“The 2014 landslide appears to be entirely natural, and is one of a number of similar landslides that have occurred along Brenot and Lynx creeks over the last few hundred years, resulting from natural geomorphic processes,” Allan Chapman, the OGC’s hydrologist reported in November, 2014.

Chapman added that the “landslide deposited a moderate volume of fine-grained silt into Brenot Creek and Lynx Creek. I would anticipate that these deposits along the stream channels will continue to release the elevated metals into the stream water, affecting the stream water quality, for an extended period of time.”

Wendling, however, has questions. For one, the slide was not a singular event. Slides continue to occur there regularly. In an interview from his Nanaimo office, Wendling said the only way to understand whether the presence of toxic metals in the water is natural or not would be to dig deep into the ground around where the slides have occurred and to see whether the metals are found there. If they are not, and are being carried into the creek by groundwater, then where is the groundwater flowing from and why does it continue flowing in such intensity so long after the first slides?

Such test wells might shed light on whether or not major changes to the landscape such as the nearby giant Williston reservoir and/or natural gas drilling and fracking operations played a role in altering the direction in which groundwater flowed, Wendling said.

Wendling, an independent professional hydrologist, works closely with First Nation governments in the northeast who are concerned about the gas industry’s impacts on water resources. He said the high volume of groundwater entering Brenot and Lynx creeks, the contaminated soils being carried in that water, and when the slides began are all of concern. Typically, he said, such events occur in the spring months following periods of intense rain and snowmelt. But this one appears to have occurred in the middle of a drought, he said.

Shortly after the slides began, Wending says he walked the area and was struck by the dramatically different water levels upstream and downstream of where Brenot creek enters Lynx creek. Upstream, Lynx creek was virtually dry. Downstream, the creek had 50 times the normal water discharge.

“Why do two similar steams have such a difference in flows?” Wendling asked, adding that it was “important to investigate” all possible explanations for “the discharge of larger flows of shallow groundwater in proximity to Brenot creek.”

However, no one is expecting any such investigations any time soon. Neither BC Hydro, the Oil and Gas Commission, provincial ministries such as Environment, or the natural gas industry have groundwater flow monitoring wells in place: a fact that Geertsema laments.

“I think it would be very useful to characterize groundwater flows,” Geertsema said. “It would help me and it would help the mayor whose backyard is where the problem is.”

It would also be extremely useful in light of another uncomfortable truth about earthquakes and their potential to alter groundwater flows and trigger landslides.

Hydroelectric reservoirs themselves can and do induce earthquakes. After the massive Three Gorges Dam was built in China, for example, more than 3,400 earthquakes were recorded between when the dam’s reservoir began to fill in June 2003 and the end of 2009. The frequency of earthquakes in the region during those seven years was 30 times greater than before the dam’s reservoir began to fill.

A network of groundwater testing wells would go some way to helping people in the region understand what might occur as the Site C dam goes from concept to potential reality over the coming years.

The reservoir that would be created by the dam would flood nearly 110 kilometres of the Peace River valley and side valleys.

Should the Site C dam be completed, steadily rising waters impounded by the dam are expected to cover ground vegetation that will react with the water to contaminate it with methylmercury, a substance that continues to poison fish in the massive Williston reservoir nearly 50 years after the first dam on the Peace River, the W.A.C. Bennett Dam, was completed in 1968. First Nations people and anglers are warned not to eat fish from the artificial lake, whose shores continue to erode and slide into the reservoir, causing further contamination.

Johansson’s worry is that any one of a number of other landslides like those at Brenot creek could occur in future years, leading to a steady increase in the amount and variety of other waterborne toxins that could one day accumulate in the Site C reservoir. Toxic water impounded by the future dam would have to be released to power the dam’s hydroelectric turbines, meaning that such water would then flow downstream toward the wildlife rich Peace-Athabasca Delta, one of the world’s largest freshwater deltas and a critically important staging area for migrating birds.

Meanwhile, as Site C construction activities accelerate, members of UNESCO’s World Heritage Committee are about to conduct a study into the impacts that the dam could have on Wood Buffalo National Park, a World Heritage Site. The investigation was prompted by a petition from Alberta First Nations concerned about the potential downstream impacts of the $9 billion hydroelectric project. The committee has asked the federal government to ensure that no irreversible work on Site C takes place until it has completed its mission and report.

This article originally appeared on Policy Note.

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On January 20, BC Hydro issued a press release singing the praises of a new hydro transmission line not far from where preliminary work has begun to build the $9-billion Site C dam.

The release, headlined “New transmission line to power development in the south Peace,” featured boosterish quotes from Premier Christy Clark, Energy and Mines Minister Bill Bennett and BC Hydro CEO and president Jessica MacDonald, but made no mention of the dam.

Yet it highlighted for many one of the most vexing questions about why the dam, which is the single-most expensive megaproject in the province’s history, is being built at all: Why this project at this time?

“This line doubles the amount of power we can provide to the region,” enthused MacDonald. “We know it’s a growing region and BC Hydro needs to be one step ahead and ensure we can get power to where it is needed most. We want industry in B.C. to use clean power that comes from BC Hydro’s hydroelectric facilities.”

What MacDonald didn’t say, and Clark and Bennett did nothing to elaborate on either, is that the $300-million and counting transmission line is but the first of at least three in the region. Another two lines, which the provincial government wants exempt from review by the provincial electrical utilities regulator the BC Utilities Commission (the province also exempted the Site C dam project from similar review), will add hundreds of millions of dollars more to the tally for taxpayers.

Also not explained anywhere by MacDonald, Clark, Bennett and company is that virtually all of this new transmission infrastructure is being built at public expense to provide power to one entity and one entity alone — the natural gas industry. An industry, ironically, which has used and continues to use small portions of the gas that it drills to fire turbines that provide the power to move the gas through pipelines to processing plants and then on to consumers.

The Only Credible Explanation for Building the Site C Dam

Now, in the name of making “dirty” natural gas companies marginally less so, BC Hydro at the behest of the provincial government is aggressively pursuing a policy of providing “clean” hydroelectricity to the gas industry so that its greenhouse gas emissions are lowered here in B.C. It is this policy that provides the only credible explanation for why the Crown corporation is rushing to build the controversial dam at this time.

Indeed, BC Hydro’s own records show that in the absence of a vastly expanded natural gas sector in the province there is simply no need for the dam now or in the foreseeable future. It has told the B.C. Utilities Commission that it will be 2028 before domestic electricity consumption actually exceeds domestic production. And even then, according to BC Hydro, there is good reason to believe that that critical point may be even further down the road.

After filing its most recent load forecasts with the utilities commission, BC Hydro produced a quarterly report noting that its earlier forecasts for large industrial and commercial users were overstated. New information suggested that those consumers will likely use even less electricity in future years and that such declines could be most pronounced in key industries like the pulp and paper industry that directly and indirectly employ thousands of people.

Ironically, one of the main reasons why B.C.’s pulp and paper industry is in trouble is the rising cost of electricity. In 2014, hydro rates increased by 9 per cent, the first in a planned five years of increases totalling at least 28 per cent. The increases mark just the beginning of what could be years of steadily higher bills as customers repay the billions of dollars that BC Hydro must borrow to pay for Site C and the new transmission lines.

For certain pulp mills that rely more on power than chemicals to break down wood fibre, just the most recent increases in hydro rates threaten to put some of them out of business. Provincial Finance Minister Mike de Jong was told as much in June in a letter signed by the CEOs of four major forest companies including Canfor, West Fraser, Catalyst and Paper Excellence.

“While our industry prides itself on cost-cutting through constant innovation and improvements in efficiency, the magnitude and timing of the increase in B.C. Hydro rates combined with the increase in [provincial sales] tax, may result in many of the mills shutting down,” the letter reads in part.

No wonder, then, that BC Hydro believes that there could be possible declines in hydro usage among some industrial users. If just one mechanical pulp mill in the province shuts down, enough power to supply 70, 000 homes is freed up.

LNG Industry Could Spike Electricity Demand

The only scenario in which BC Hydro envisions hydro usage in the province exceeding available supply is in the event that one or more Liquefied Natural Gas or LNG plants are built on our coast. Such plants require enormous amounts of power to super-cool natural gas to the point where it turns to liquid form and can be loaded onto tankers for shipment overseas.

According to BC Hydro filings with the utilities commission it is only with the arrival of an LNG industry in the province that hydro consumption begins to outstrip domestic supply, and only then in about eight years.

Despite the fact that fossil fuel giants such as Shell and Petronas have yet to commit a dime to building LNG plants, the rush is on to supply them with hydroelectric power to offset some of the emissions associated with producing and potentially one day liquefying natural gas: a gas that no matter how you slice it is a climate-unfriendly fossil fuel that contributes significantly to global greenhouse gas emissions.

New Transmission Lines Encourage Gas Production

Whether or not an LNG industry emerges, however, the provincial government and BC Hydro are forging ahead with plans to supply hydroelectricity to companies drilling for natural gas in the Montney Basin. The basin, which extends out a considerable distance from the Peace River, contains B.C.’s largest remaining reserves of natural gas.

The basin has considerable “wet” natural gas deposits, which in the current environment of generally depressed natural gas prices is a good thing for the companies involved. Dry gas is generally made up of methane whereas wet gas may contain ethane, butane and pentane, or natural gasoline — all valuable hydrocarbons.

By extending transmission lines into the Montney Basin, the province and BC Hydro are encouraging increased gas industry activity. None of the gas that the companies drill for and produce will have to be used to fire turbines that move the gas through pipelines. Instead, all of the gas saved through electrification can be sold, especially the wet gas with its higher market value.

“Before, industrial customers had to burn gas to power their facilities. The new transmission line not only makes more projects possible, it means they’ll be even cleaner,” Premier Clark said in BC Hydro’s January 20 press release.

Greenwashing A Climate Unfriendly Industry

Of course, what neither Clark, Bennett or MacDonald say in the release is that there is actually no net benefit to the earth’s overheating atmosphere in making the gas industry here at home somewhat cleaner. While the gas industry’s greenhouse gas emissions in B.C. may be less bad than they would otherwise be, all of the gas saved through electrifying gas company field operations is simply sent down pipelines to the financial benefit of the sellers. The gas is then burned somewhere else at a collective loss to the planet.

For people who have been hunkering down at a protest camp near the Site C dam construction zone where temperatures have sometimes dipped down to a bone-chilling -25 C, every new announcement extolling the virtues of a new hydroelectric transmission line reinforces the notion that BC Hydro and the provincial government have a build-it-and-they-will-come attitude with what is the single-most expensive megaproject in the province’s history.

The more transmission lines erected to allegedly “green up” the field operations of fossil fuel companies, the more fossil fuel industry activity. The more such activity, the more the government and BC Hydro can justify Site C.

The transmission line that Clark and company enthusiastically praised in the BC Hydro press release of January 20 is known as the Dawson Creek-Chetwynd Area line or DCAT. The project consisted of building two new lines of 12 kilometres and 60 kilometres in length, construction of a new substation and upgrades to two other facilities.

Transmission Lines Exempted from BCUC Review

BC Hydro’s press release states that DCAT’s cost is $296 million. But a document that the Crown corporation filed last fall with the B.C. Utilities Commission tells a different story. In that document, the actual cost of the project as of September was just under $302 million or nearly $6 million higher than that stated in BC Hydro’s press release. And the document, which is signed by BC Hydro’s chief regulatory officer, Tom Loski, notes that the project is not yet completed. So there will be further costs, including those associated with taking down all of the lower kilovolt lines that the new transmission infrastructure replaced.

BC Hydro is required by law to file information on DCAT because that project was subject to B.C. Utilities Commmission review. The public therefore has access to details on the $302 million and counting transmission line. But the provincial government has indicated that two other proposals to build massive new hydroelectric transmission line infrastructure in the Peace region — infrastructure explicitly intended to foster more natural gas industry developments — will not be subject to such reviews and therefore the public may learn next to nothing about them.

Last November, Energy Minister Bennett explained why the government did not want the projects brought before the BCUC. In a Business Vancouver story, Bennett said: “My understanding right now is that if I do not direct the BCUC to allow these projects to go ahead, that we may lose some interest on the part of the gas companies . . . They just don’t feel that they can wait for a long BCUC process.”

Bennett’s position leaves Karen Goodings, Area B director for the Peace River Regional District, decidedly uncomfortable.

“Our concern, of course, is once again the avoidance of going through the process that is in place to examine these things,” Goodings told Business Vancouver. “It’s almost as though this is another excuse for building Site C.”

An unusual wrinkle of one of the proposed transmission lines known as the North Montney Power Supply Project is that the 140 kilometre-long line will be built and operated by a private company. ATCO Power will build the transmission infrastructure to deliver electricity to the remote Pink Mountain area well to the north of Fort St. John. The area is the site of major gas-drilling and fracking operations by Progress Energy, owned by the Malaysian state-owned corporation, Petronas.

‘Ministerial Exemption’ Sought to Speed Transmission Line

In a letter last March to Les MacLaren, an assistant deputy minister in Bennett’s ministry, ATCO vice-president Dale Friesen explained why neither ATCO nor Petronas want the project subject to BCUC review.

Friesen said a “ministerial exemption” exempting the project from BCUC review was being sought because of the “aggressive schedule” required to build the project.

“Progress Energy is developing gas production capacity in the North Montney Basin in support of the Pacific Northwest LNG project proposed by Petronas, Progress’ parent company.”

“ . . . By utilizing BC Hydro supplied power instead of burning natural gas, Progress expects to decrease emissions in the region by approximately a third. Progress further expects to realize improved equipment performance, decreasing the risk associated with gas delivery to LNG facilities.”

“The project is being developed on an aggressive schedule to meet with Progress timelines. Failure to meet these timelines reduces the feasibility of electrification and poses a substantial threat to the project proceeding.”

Nothing in the information obtained by the Regional District indicates what the projected costs to build the line and related infrastructure are. But given that the line is twice the length of the DCAT line and goes through rugged and remote terrain, it seems reasonable to conclude that it will be a vastly more ambitious and expensive project.

And somehow, despite all of the costs associated with building the line and all of the ongoing costs of purchasing electricity carried by the line, Goodings believes that Petronas will be financially ahead of where it would be if it produced its own power with natural gas.

“They are extremely aware that they can produce their own power. There has to be a benefit there,” Goodings says. “If they can produce their own power cheaper than hydro, they will do it.”

Unfortunately, nothing by way of information supplied to the Peace River Regional District by ATCO sheds light on relative energy costs or on what, if any subsidies, ATCO and Petronas may benefit from in the event the line is built.

Given that three separate transmission lines are either built or about to be built to supply electricity to an industry that has for decades produced its own power from the gas it draws from the ground, Goodings thinks the need for an independent review of all new transmission line projects in the Peace region and the Site C dam is obvious. Especially when the government’s long-touted promise of an LNG industry appears more remote with each passing day.

“Are these transmission lines the reason for Site C? If that’s the reason we’re spending $9 billion then yes, there’s an impact on the taxpayer, and they should not be exempt from review,” Goodings says.

No amount of boasting about all the clean energy supplied by Site C and an emerging network of new transmission lines gets around the fact that an awful lot of public money is about to be dropped in the Peace Region.

Goodings, like others who have called on the government to subject the Site C project to B.C. Utilities Commission review, believes it’s in our collective interest to know if we are about to spend billions of dollars on a new dam and hydro lines that, at the end of the day, may benefit the public very little while benefitting one industry very much.

Ben Parfitt is a resource policy analyst with the Canadian Centre for Policy Alternatives.

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.