Aug 17, 2016

Fracking, earthquakes and hydro dams? Don’t worry. We have an understanding.

Photo by Garth Lenz
By

This is the second of two posts. Read the first here.

Efforts by BC Hydro to ban potentially destructive natural gas company fracking operations in the vicinity of its biggest dams fall well short of what an Alberta hydro provider has achieved, raising questions about why British Columbia isn’t doing more to protect public safety.

Documents obtained through a Freedom of Information (FOI) request by the Canadian Centre for Policy Alternatives show that BC Hydro officials have feared for years that fracking-induced earthquakes could damage its dams and reservoirs.

Senior dam safety officials with the public hydro utility even worried for a time that natural gas companies could drill and frack for gas directly below their Peace River dams, which would kill hundreds if not thousands of people should they fail.

Senior dam safety officials with the public hydro utility even worried for a time that natural gas companies could drill and frack for gas directly below their Peace River dams, which would kill hundreds if not thousands of people should they fail.

“The Montney gas field has vertical stratification of subsurface [natural gas] rights, so there may actually be a number of different owners laying claim under our damsites,” BC Hydro’s director of dam safety, Stephen Rigbey said in an April 2012 email released in response to the FOI.

Yet, after years of discussions with B.C.’s Oil and Gas Commission (OGC), which regulates oil and gas industry activities in the province, BC Hydro has obtained only modest commitments to prevent fracking near its two Peace River dams – the massive WAC Bennett dam, which impounds the world’s seventh-largest reservoir, and the smaller Peace Canyon dam downstream.

The restrictions, which BC Hydro’s director of dam safety Stephen Rigbey describes as “an understanding”, also apply to a third dam on the river, the controversial $9-billion Site C project, currently in pre-construction.

Both BC Hydro and the OGC say that the understanding is that “there will be no new tenures” issued to companies wishing to drill and frack for natural gas within five kilometres of BC Hydro’s dams. However, companies holding existing rights would not be prevented from doing so.

“If future activity related to the existing tenures is planned, we will work closely with the Oil and Gas Commission to put restrictions in place to effectively manage any risk,” Rigbey said in an email response to questions.

What those measures would be remains the subject of ongoing discussions. No restrictions are presently in place around any of the massive reservoirs impounded by BC Hydro’s Peace River dams or the lands that could one day surround the Site C reservoir.

In an email response to questions, the OGC said that at this point in time, the Ministry of Natural Gas Development “is not accepting any new requests for subsurface [natural gas] rights within 5 kilometres of the Site C construction area.”

The Commission went on to say that “there are no active hydraulic fracturing operations” within the five kilometres of BC Hydro’s Peace River dams but that there are “a small amount of existing subsurface rights issued within the 5 km buffer zone around Site C.”

“These were issued prior to the creation of the buffer. Any applications in that area, or elsewhere, go through a strict review process before permits are issued. The Commission is also talking with BC Hydro about any additional permit conditions that would be required to protect public safety and the environment in the area specifically, before construction occurs on Site C.”

The measures to date in B.C., fall well short of what Alberta hydro provider, TransAlta, has achieved. In interviews and correspondence with the company, TransAlta revealed that it has effectively shut down all fracking within five kilometres of one of its dams and also around the entire dam’s reservoir as well. And it has succeeded in imposing restrictions on potentially destructive fracking operations in a zone up to ten kilometres away from its damsite.

The understanding is that “there will be no new tenures” issued to companies wishing to drill and frack for natural gas within five kilometres of BC Hydro’s dams. However, companies holding existing rights would not be prevented from doing so.

But, as is the case in B.C., there is nothing in writing to reassure members of the public – no regulation or government statement – banning natural gas companies from fracking near sensitive infrastructure such as hydro dams and reservoirs. Both provinces appear reluctant even to suggest that fracking is inappropriate in certain cases where public safety is concerned, perhaps fearing the precedent such an admission would represent.

“At this time there is no regulated/government mandated exclusion areas near critical infrastructure in Alberta,” says TransAlta’s chief media spokesperson, Stacey Hatcher. Rather, Hatcher says, an “agreement” has been reached to exclude some hydro dams and reservoirs from fracking zones.

BC Hydro’s modest achievements to date come as the Christy Clark government pursues two at times conflicting agendas. On the one hand, the government vows to push its Site C hydro dam, the most expensive infrastructure project in B.C.’s history, “past the point of no return.” On the other, it continues to aggressively push for Malaysian state-owned Petronas to invest billions of dollars to build a Liquefied Natural Gas (LNG) processing plant near Prince Rupert and to tarnish all those who oppose the project. Should such a plant be built, natural gas drilling and fracking near the Peace River and its hydro facilities would significantly ramp up.

In an April 2012 email, Rigbey likened potential fracking in the Peace to “carpet bombing”, and added that much of the anticipated fracking in future years would occur across the “well-established” regional stress regime.

Even if no such plant materializes in B.C. – an increasing likelihood given the recent announcement that another LNG proponent, Shell, appears ready to scrap its bid to build one – an upswing in natural gas prices would almost certainly result in increased gas drilling and fracking operations, including on lands alongside the reservoir that would be created by the Site C dam, which would flood more than 100 kilometres of the Peace River and its tributaries.

Documents filed by BC Hydro with a panel that reviewed the project for the provincial and federal governments noted that, even in the absence of fracking, nearly 4,000 landslides are expected to dump debris into the reservoir as a result of the Site C dam being built. The 676-page report that discusses those landslide risks makes no mention of additional risks to the reservoir should earthquakes be triggered nearby.

Martyn Brown, a former chief of staff to Premier Clark’s predecessor, Gordon Campbell, says the province’s conflicting agendas underscore a troubling aspect of the government’s regulation of oil and gas industry operations near critical infrastructure. From the outset, Brown says, the OGC has both promoted and regulated oil and gas industry activities. Limiting where companies drill and frack is simply not part of the OGC’s mandate or culture.

Limiting where companies drill and frack is simply not part of the B.C. Oil and Gas Commission’s mandate or culture.

Brown likens the OGC to the National Energy Board. “It has a dual role as a proponent of oil and gas development, but also its regulator. And I think there is a fundamental conflict with that,” Brown says. He adds that “political oversight” of the OGC is also problematic because two Cabinet ministers – Energy and Mines Minister, Bill Bennett, and Minister of Natural Gas Development, Rich Coleman – are effectively there to “promote oil and gas activity”.

Concerns for public health and safety should mean that when tensions between the province’s publicly owned hydro utility and the natural gas industry arise it falls to a neutral ministry to determine what activities will be allowed or disallowed near critically important public infrastructure like dams and reservoirs, Brown said.

“Clearly what you need now is an independent voice in cabinet, the Environment Minister, to make broad determinations in an independent way,” Brown said. “The promoter should not be the regulator of oil and gas activities.”

Documents released in response to the FOI request show that in both Alberta and British Columbia hydro providers have become increasingly alarmed at natural gas company incursions onto lands near their dams. The concerns have escalated as distinct clusters of earthquakes in confined areas over short periods of time have occurred in lockstep with fracking operations.

In one email, Rigbey notes that there are “no regulations to stop” oil and gas companies “from injecting into a pre-existing fault” in the rock. In other words, there is a risk that induced fractures could be forced into geologically unstable areas triggering or setting the stage for earthquakes. While gas companies might not want to tap into such faults, Rigbey noted, “accidents can happen.”

In its public pronouncements, however, BC Hydro has been more muted in its concerns. In a 551-page report filed with the joint federal-provincial panel that reviewed the Site C project for example, BC Hydro devoted less than two pages to discussing “petroleum industry-related” earthquakes and it downplayed their threats.

“The Oil and Gas Commission is now establishing procedures and requirements for monitoring and reporting of induced seismicity,” BC Hydro reported to the panel in January 2013. “Each case of induced seismicity will be evaluated on the basis of its unique site-specific characteristics, but it is proposed that hydraulic fracturing would be suspended upon detection of an earthquake of magnitude M4 or larger. It should be noted that earthquakes less than about magnitude M5 do not release enough energy to cause damage to engineered structures.”

In response to written questions, the Oil and Gas Commission said that as a result of discussions with BC Hydro the province “has established a five kilometre buffer area around the WAC Bennett, Peace Canyon and Site C dams.”

Graham Currie, the OGC’s executive director of corporate affairs, added that the Site C dam location is squarely within the Montney Basin, which contains large quantities of shale gas. Gas from dense shale rock formations can only be coaxed from the earth by extensive use of fracking.

Distinct clusters of earthquakes in confined areas over short periods of time have occurred in lockstep with fracking operations.

Gail Atkinson, an expert on induced earthquakes and a professor in earth sciences at the University of Western Ontario (UWO), says induced earthquakes can be hazardous because they occur much closer to the earth’s surface than do natural earthquakes. If such events happen near dams or other surface structures, the ensuing shaking can be much worse than would be the case with a naturally occurring earthquake of the same magnitude.

The higher the number of fracking-induced earthquakes near dams, the greater the risk that one of them might be sufficiently strong enough to exceed what the dams are engineered to withstand.

“If the frequency of experiencing earthquakes near a dam increases, then the level of expected ground motions at the 1% in 100 year likelihood level will increase,” Atkinson said. She warns that the risk will be greatest “in areas where the hazard was initially low because there is little natural seismicity.”

Atkinson added that even earthquakes of a “moderate” strength could damage dams or other structures if they are induced “at close distances” to such structures.

Such risks are not something that BC Hydro talks about publicly, however. In an on-line video on dam safety, for example, Rigbey talks about the threats to dams from naturally occurring earthquakes but never once even mentions fracking or the increasing number of tremors associated with it.

Atkinson’s work has clearly influenced TransAlta’s thinking. The company is one of three organizations that funds Atkinson’s fully endowed research chair on hazards associated with induced earthquakes at UWO. The other two are the National Sciences and Engineering Research Council and Nanometrics, a maker of seismic monitoring equipment. TransAlta also pays for some of its engineers and dam safety officials to be part of an ongoing multi-disciplinary research effort known as the Canadian Induced Seismicity Collaboration or CISC.

The CISC’s website notes that fracking-induced earthquakes are a “pressing problem” in Western Canada and in British Columbia and Alberta particularly. “There is a significant (though very small) possibility that triggered events could be large enough to cause significant damage,” the CISC’s scientists say.

According to Hatcher, TransAlta has secured agreement from natural gas companies operating in Alberta that they will adhere to a special “traffic light” system in a zone between five kilometres and 10 kilometres from its Brazeau dam and the shorelines of the dam’s 13-kilometre-long reservoir. “The traffic light system works in a similar manner to other traffic light systems for hydraulic fracturing, with a Green (proceed)/Yellow (pause and monitor) and Red (stop) protocol,” Hatcher said in written response to questions.

Photo by Garth Lenz

Photo by Garth Lenz

“TransAlta is concerned about the potential impact of fracking induced earthquakes and continues to work with the Alberta Energy Regulator (AER), Alberta Environment and the oil and gas operators to ensure that hydrocarbon development occurs in a safe manner that doesn’t create unnecessary risk to existing infrastructure,” Hatcher added.

In the much more sensitive zone immediately beside the dam and reservoir and extending out five kilometres, TransAlta has effectively shut down all fracking operators after filing a number of “statements of concern” with the AER, Alberta’s equivalent of the OGC.

Hatcher said that TransAlta could not release the documents and referred questions to the AER. The Canadian Centre for Policy Alternatives has filed a second Freedom of Information request to obtain copies.

Documents released by BC Hydro in response to the first FOI show that BC Hydro was prompted to call for frack-free buffer zones around its dams after learning what TransAlta had achieved in Alberta. BC Hydro’s Peace River dams are not only the biggest power sources in the province’s hydroelectric network (the Bennett dam furnishes one-quarter of the province’s hydroelectric power), but also in the region of the province with the richest natural gas reserves.

Only one other highly sensitive, yet little known, infrastructure project in B.C. is currently the subject of special operating guidelines as far as fracking is concerned.

BC Hydro learned of those guidelines in email correspondence with the OGC.

The infrastructure in question is a massive underground storage reservoir capable of holding 77 billion cubic feet of natural gas. It is near an area called Pink Mountain, where Progress Energy, a subsidiary of Petronas, is actively engaged in building roads, well pads, freshwater and wastewater holdings ponds, compressor stations, pipeline corridors and other infrastructure integral to the gas-drilling and fracking process.

The company also has plans on the books, which the provincial government has exempted from BC Utilities Commission review, to have a privately owned and operated hydro transmission built to the Pink Mountain area from the Peace River’s hydroelectric facilities. The new line would allow Progress to burn less natural gas in compressors by switching to hydroelectricity, thus increasing the profitability of its fracked gas.

Any company holding a permit to drill and frack for gas near the reservoirs “must not conduct any drilling completions or well operations” that have “a material adverse impact on the integrity or safe operation” of the facilities.

 

How this is monitored and enforced is not clear.

The underground gas storage facility consists of two underground storage reservoirs and is about 1,400 metres below the ground. Since the late 1980s, natural gas has typically been pumped into the reservoirs in the summer months when gas demand is low and then pumped out as needed in the fall and winter months.

Fortis Inc. announced that it was purchasing the facility from Chevron in 2015 at a cost of approximately US$266 million.

At the time of its purchase, Fortis noted that the facility could become critical in the event LNG went ahead in the province. “The facility – which is the only underground gas storage facility in BC offering storage to third parties – is also uniquely positioned to benefit from the completion of proposed LNG export projects, where it could provide balancing services to suppliers and LNG exporters.”

In an email response to questions, David Bennett, Fortis BC’s director of communications and external relations, said that “successful meetings” were held between the company, the OGC and the provincial Ministry of Natural Gas Development. Those talks resulted in new rules that “ensure current and future drillers and well operators are aware of the facility and operate in such a manner to maintain the integrity of the underground storage reservoirs and ensure that new well production is not taken from the ACGS [Aitken Creek Gas Storage] reservoirs.”

The government seems to be of the view that the less said, the better.

In a follow-up phone conversation, Bennett said that Fortis had no fears that fracking into the reservoir could result in a cataclysmic event such as an explosion. The main concern, he said, is to avoid someone taking gas out of the reservoirs by fracking into them. “We don’t want anyone interfering with the reservoir,” he said, adding Fortis wants Progress Energy and any other companies engaged in fracking “to stay away from the reservoir.”

Documents released through the FOI show that the OGC has “conditions for permits” in place in proximity to the gas reservoirs. The conditions do not include an outright ban on fracking or gas drilling in a buffer area around the reservoirs. On maps supplied by the OGC, the buffer area is irregularly shaped but in most cases extends less than five kilometres out from the reservoirs.

In email correspondence, the OGC said that any company holding a permit to drill and frack for gas near the reservoirs “must not conduct any drilling completions or well operations” that have “a material adverse impact on the integrity or safe operation” of the facilities.

How this is monitored and enforced is not clear.

Natural gas companies operating in the zone are also required to notify Fortis when a well is about to be drilled and fracked. They must also notify the company when they resume drilling following “a temporary suspension” of such operations.

The special permit conditions, which BC Hydro has a copy of, do not specify what would lead to a “temporary suspension”. But earthquakes induced by fracking are among those events that have triggered stoppages in previous fracking operations.

Like the arrangements that have been worked out with BC Hydro, the special operating conditions at Aitken Creek are not common knowledge. Neither the OGC, nor the Ministry of Energy and Mines, nor the Ministry of Natural Gas Development has issued a press release stating that the special permit conditions, such as they are, are in place in the Aitken Creek area.

Much like the silence surrounding buffer zones around B.C.’s biggest hydroelectric dams, the government seems to be of the view that the less said, the better.


Read Part 1: Big dams and a big fracking problem in BC’s energy-rich Peace River Region

This post is also available via DeSmog Canada and The Tyee.

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