https://thetyee.ca/Analysis/2019/03/27/BC-Fracking-Report-Apprehension-Insufficient-Unknown-Concerns/
[links and images in online article]
‘Insufficient,’ ‘Unknown,’ ‘Concerns’: BC’s Fracking Report Full of
Apprehension
Scientific panel ran into ‘lack of info’ many, many times.
By Andrew Nikiforuk 27 Mar 2019 | TheTyee.ca
Andrew Nikiforuk is an award-winning journalist who has been writing
about the energy industry for two decades and is a contributing editor
to The Tyee.
Although a government-commissioned scientific review of fracking in
British Columbia released earlier this month occupies some 232 pages,
the word “concerns,” as in “concerns regarding environmental impact,”
pops up more than 130 times.
That’s a lot of scientific apprehension about a technology that serves
as the foundation for the province’s growing liquefied natural gas industry.
More than 90 per cent of all oil and gas wells in B.C. require extensive
fracking, which pulverizes hydrocarbon-bearing rock with highly
pressurized streams of water, sand and chemicals.
In its final report, the three-member scientific panel tasked with the
review expressed “concerns” about every part of its limited
investigation, particularly around water, seismic hazards and gas migration.
(It’s worth noting the review did not look at public health issues,
cumulative land impacts, social costs, or the industry’s poor economic
health or worker safety.)
The paucity of the data the researchers drew upon, perhaps, explains the
proliferation of so many “concerns” in the review.
The word insufficient, as in “insufficient information,” peppers the
report 27 times, while “unknown” appears 17 times.
Uncertain or uncertainty, as in “uncertain water quality,” appears
nearly 50 times, while gaps, as in “important knowledge gaps,” litters
the document 27 times.
Here’s a brief snapshot of eight “insufficient” and “unknown” data gaps
the government of B.C., a proponent of LNG terminals, still faces
regarding the impacts of the fracking industry on water, earthquakes and
gas migration.
1. The government knows little about the state of groundwater in the
northeastern B.C., or how fracked wells or wastewater disposal wells may
impact that critical resource over time. The province operates just
seven groundwater observation wells for a vast area.
The review noted, “In [northeastern B.C.], there is a general lack of
information on groundwater, particularly the extent and thickness of
aquifers, because there are very few groundwater well records that can
be used to map aquifers with any degree of confidence.”
2. The report couldn’t draw conclusions about risks the industry poses
to water, land and health because of insufficient data. “The very rapid
development of shale gas in [northeastern B.C.] has made it difficult to
assure that risks are being adequately managed at every step.
Furthermore, the panel could not quantify risk because there are too few
data to assess risk.”
3. The report couldn’t tell if the industry-funded B.C. Oil and Gas
Commission was a competent regulator because, after a decade of
overseeing a fracking boom in northeastern B.C., “insufficient evidence
was provided to the panel to assess the degree of compliance and
enforcement of regulations.”
4. The government knows little about radioactive hazards associated with
fracking. Shale deposits containing oil or gas are deep and often
contain salty waters contaminated with uranium, thorium and radium. The
industry calls these radioactive elements “Normally Occurring
Radioactive Material (NORM).” Fracking has changed the concentration and
volume of NORM being produced at wellsites across North America.
“The issue of NORM throughout wastewater cycle (storage facilities,
pipes, solid waste) needs careful examination by government to determine
if current practices are sufficient for protecting human health and the
environment,” reads the report.
5. The fracking industry consumes rivers and lakes of water, yet data on
water quantity is insufficient or unknown. Even the panel noted that the
data it cited in the report on water consumption by the industry was
“outdated.”
“Considering the vastness of the region, alongside the increased level
of industrial development, the panel considers the baseline data and the
ongoing monitoring of surface water and groundwater quantity to be
insufficient.
“Baseline data and information on streamflow, lake levels, and wetlands
are sorely lacking, particularly given the high demand for surface water
for industrial use.”
A B.C. Oil and Gas Commission technical expert told the panel, “There
are a lot of data shortages, especially in smaller basins, and industry
is interested in these smaller basins.”
6. There are serious questions about the region’s geological capacity to
accommodate more disposal wells should LNG ramp up. Every year the
fracking industry generates millions of barrels of toxic salty
wastewater from shale formations. The law requires that industry
re-inject these so-called “produced waters” back into the ground into
designated disposal wells.
Pumping waste into 100 designated disposal wells over time has caused
earthquakes and forced the closure of seven disposal wells. Disposal
wells remain a constant threat to groundwater too.
The scientific panel learned that “if LNG ramps up again, [there would
be] more pressure on these disposal wells. From a technical perspective,
there are limits on pressure and flow due to potential seismic
influences, and there are also potential impacts to neighbouring oil and
gas wells and other disposal wells.”
The report added that “significant concern was expressed by government
staff, the regulator and industry about insufficient capacity for
wastewater disposal in [northeastern B.C.], because “there is no solid
understanding of the volume needed and disposal requirements in the
Montney for growth scenarios.”
7. The report raised multiple concerns about the thousands of
earthquakes caused by hydraulic fracturing and wastewater disposal wells
in northeastern B.C. It noted that cumulative injection volumes had
played a role in generating earthquakes in areas with “dense hydraulic
fracturing operations.”
The panel found that “the maximum magnitude of an event that could be
induced in [northeastern B.C.] is unknown” and that “evaluating the
success of a mitigation technique is difficult, given the industry’s
current inability to forecast what would have happened without
mitigation.” Given all the unknowns, the panel recommended more and
better seismic monitoring in the region.
8. The B.C. government doesn’t have good data on the number of methane
leaks from oil and gas wells, or the volume of fugitive methane being
released by the industry. Methane, a greenhouse gas, is a much more
potent destabilizer of the climate than carbon dioxide.
The panel recommended that industry data on surface casing leaks within
the wellbore “be made publicly available, including both
detected/measured leaks and monitoring and mitigation measures taken. In
several cases, it was communicated to the panel that known leaks were
being allowed to persist and that they would be dealt with at the time
of well abandonment.”
On leaks outside the wellbore, known as “gas migration,” the panel
reported that it “was acknowledged by both industry and non-industry
presenters that there is a need for a better sense of occurrences and
incident rates.”
In conclusion, the panel noted “an overall lack of transparency of
data and information.”
As cement in wellbores ages, it cracks creating pathways for methane and
other gases such as radium to find a way to the surface. The report
noted, “experiences with the long-term integrity of wellbores is limited
and represents a major knowledge gap.”
The report, which has stated nothing new about the industry and offers
no concrete data on water consumption or waste water volume, failed to
address a number of other critical issues, such as diminishing returns.
Fracking deep shale rock requires more capital, water and energy to
retrieve fewer hydrocarbons than conventional drilling.
In most shale basins, companies only recover 12 to 18 per cent of the
resource, even though they are using massive volumes of sand and water
to attack the rock.
In contrast, the drilling of conventional resources often recover as
much as 30 to 40 per cent of the resource. [Tyee]
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https://thetyee.ca/Analysis/2019/03/14/Fracking-Disaster-Polluters-Not-Paying/
[links and images in online article]
A Fracking Disaster: BC Failing to Make Polluters Pay
Auditor general says oil and gas commission hasn’t ensured companies
will pay cleanup costs.
By Andrew Nikiforuk 14 Mar 2019 | TheTyee.ca
The polluter-pay approach isn’t working in British Columbia’s oil and
gas patch.
The province’s energy regulator hasn’t secured enough money from
companies to cover the estimated $3-billion cleanup costs for 10,672
inactive oil and gas sites, says a new report by B.C. auditor’s general.
But that’s only the beginning of a long list of deficiencies in the B.C.
Oil and Gas Commission’s approach to managing the rising environmental
and financial risks posed by inactive wells, pipelines and other
industry infrastructure, according to the report by Auditor General
Carol Bellringer.
In addition to not collecting enough security deposits, the regulator
has failed to demand that operators decommission inactive wells in a
timely fashion due to “gaps” in legislation.
With no legal requirement to clean up old wells, the industry has
predictably let the number of inactive wells grow from 3,800 to 7,474
between 2007 and 2018.
“The increase in the numbers is significant,” Bellringer said during a
Vancouver news conference.
Unlike North Dakota where industry has two years to clean up a well once
it stops producing, B.C. has no defined time limits.
The government has promised to introduce changes shortly.
The report noted that the province’s Orphan Site Reclamation Fund is
effectively bankrupt.
The number of orphaned sites abandoned by insolvent operators has grown
from 45 wells in 2015 to 326 wells today.
According to the regulator estimates, it costs an average $370,000 to
cement and reclaim a well.
As a result the agency could face more than $120 million in cleanup
costs for the 326 orphaned wells. The fund’s operating budget for
2017/18 was $5.3 million.
The Narwhal recently reported that the bankruptcy of Ranch Energy could
result in another 300 to 500 orphaned wells.
The province’s overall program for managing industry liabilities, which
supposedly follows the polluter-pay approach, has also failed to perform
as advertised, says the auditor general’s report.
Under the Liability Management Rating (LMR) system, companies aren’t
required to set aside money for cleanup costs until their liabilities
exceed the value of their assets. But companies’ financial positions can
change rapidly in the volatile oil and gas industry.
A similar system in Alberta has failed to secure adequate cleanup funds
for $30-billion worth of oil and gas liabilities because, as one senior
Alberta regulator said last year, the program doesn’t try to collect
money for well decommissioning until the companies are “already showing
declining financial capacity.”
Although the auditor general documented how badly the program is failing
in B.C., she only asked the Oil and Gas Commission to “review” it.
The report cited the example of five fracking companies that recently
went bankrupt, leaving about $86 million in cleanup and remediation
costs. The OGC had collected just $3.2 million in security deposits from
the companies under the Liability Management Rating system, leaving an
$82-million shortfall.
“The OGC’s calculation of assets did not keep pace with operators that
were experiencing rapidly declining financial health,” the report found.
“By the time their LMR rating triggered action from the OGC, some
operators could not pay the required security because of their poor
financial status, and became non-compliant.”
“The OGC has not effectively managed the environmental and financial
risks of non-operating oil and gas sites,” the report concluded, because
operators were not required to decommission inactive wells and because
the OGC has collected inadequate funds for the required cleanup efforts.
In addition the OGC has failed to identify “significant environment
risks” posed by 3,721 “legacy sites” restored prior to 2004 that could
be leaking methane or hydrocarbons into groundwater and the atmosphere,
the report found.
More than 27,526 oil and gas wells now dot northeastern B.C. and many
are on First Nations land.
Approximately 7,474 inactive wells have not been properly plugged and
sealed while another 3,198 decommissioned wells have not been properly
reclaimed and restored.
“This means that 10,672 non-operating well sites in B.C. had not been
restored to mitigate environmental risks,” says the report.
“I think the report pretty much speaks to a massive problem,” said David
Suzuki Foundation researcher John Werring, who has monitored oil and gas
well sites. “The OGC has known about this problem for years but instead
of taking steps to protect the public interest, they have been bending
to the will of industry.”
Regan Boychuk, an Alberta industry critic and advocate for accountable
cleanup programs, says the auditor general’s report identified many
flaws in the system but “did not get at the root of the problem.”
That root is a liability management system which overvalues assets so
companies never have to set aside adequate amounts for eventual
decommissioning, he said.
Boychuk said that B.C.’s program assumes every barrel of oil or
equivalent quantity of gas produced resulted in $48 in profit to the
operator.
“That’s just a fraudulent number. Industry designed the program so the
polluter doesn’t pay,” he said. “And that is why the OGC has failed to
collect tens of millions of dollars to ensure taxpayers don’t have to
pay the cost of clean-ups. Why didn’t the auditor general identify that
flaw?”
The report also didn’t address the elephant in the room — the fiscal
health of the continent’s fracking industry and its future ability to
fund cleanup liabilities given volatile oil and gas prices.
Bellringer did acknowledge that the issue was a concern during her press
conference.
According to the Wall Street Journal, the shale gas industry has
consistently spent more than it has earned in the last decade due to the
high cost of hydraulic fracturing, a technology with much greater
environmental liabilities than conventional drilling.
During that period, the 29 biggest shale producers in North America
spent $112 billion more than they generated from fracking operations,
according to data from FactSet, a financial-information firm, the paper
used in its analysis. [Tyee]
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