The 20-million-gallon Lily Dam, one of the two unlicensed dams for which Progress Energy received retroactive exemption from environmental review. Photo by Ben Parfitt.
In an earlier post I had noted that Progress Energy, now known as PETRONAS Canada had been accused of building two massive unlicensed dams in violation of provincial environmental regulations. It has since been reported that that British Columbia’s Environmental Assessment Office (EAO) allowed these massive unauthorized dams to be exempt from environmental assessments. According to Ben Parfaitt in Policy Note these dams had previously been described in internal documents of the very same EAO as being ‘illegal works’. This is a disturbing precedent because there are other unlicensed dams in the gas fields of Northern BC that stand to be given the same kind of retrospective exemption. This move by the EAO is indicative of the dominance of corporate interests generally, and PETRONAS’ imperatives in particular, within the provincial administrative process.
According to the Globe and Mail, the B.C. Sierra Club, which is a conservation group, is suing the British Columbia government to get these retrospective exemptions revoked. Olivia French, the lawyer representing the B.C. Sierra Club has stated that “Progress Energy acted with a bit of disregard for B.C.’s laws — one of those typical, ‘Ask for forgiveness, not for permission’ sort of positions.” As Green Party MLA Sonia Furstenau has said that the EAO’s decision to grant Progress’s extraordinary request for retrospective exemption fuels public distrust of the relationship between government and the powerful industries it regulates.
In an earlier post I had noted how on July 13 2018, LNG Canada formally welcomed PETRONAS as their fifth Joint Venture participant and how this investment was connected with TransCanada’s Coastal GasLink pipeline that is building to transport the natural gas from Dawson Creek to the LNG Canada terminal in Kitimat. Much of the gas to be transported to market via the pipeline and terminal will , of course, come from PETRONAS owned Progress Energy’s own gas fields in the North Montney area. On November 22, 2018 Progress Energy Canada Ltd. changed its name to PETRONAS Energy Canada Ltd. (PETRONAS Canada). Mark Fitzgerald, President & CEO of PETRONAS Canada said, “The name change is a reflection of our parent company’s commitment to Canada and the strength of our business in the company’s overall portfolio.” Malaysian Crown corporation PETRONAS now not only owns one of the largest natural gas resources in the Montney basin, but is also a key player in getting Canadian LNG to market across the Pacific ocean.
On July 13 2018, LNG Canada formally welcomed PETRONAS as their fifth Joint Venture participant. According to Energycity.ca “Petronas is now an official partner in the consortium that is proposing to build a $40 billion liquified natural gas export terminal in Kitimat”. Petronas subsidiary Progress Energy will take a 25 percent stake in the LNG Canada development, which is still subject to regulatory approvals. Shell will lead the consortium with a 40% stake. The other partners are PetroChina, Mitsubishi Corp. and Kogas Canada. As I noted in a previous post there are implications for national, trans-national relationships and intra-national relations. This investment will be closely aligned with the Coastal GasLink pipeline that TransCanada is building to transport the natural gas from Dawson Creek to Kitimat. Some members of the Wet’suwet’en nation of Canada have built a healing camp in the path of the pipeline. To acknowledge the changing scenarios in Malaysia and in BC I have changed the colours that brand this blog.
Having given up its bid to lead BC LNG Terminal investments with a mega plant on Lelu island, PETRONAS seems unwilling to be left out. On the 31st of May 2018 PETRONAS owned Progress Energy announced that another PETRONAS wholly-owned entity, the North Montney LNG Limited Partnership (“NMLLP”), “has entered into a Purchase and Sales Agreement for an equity position in the LNG Canada project in Kitimat, British Columbia, Canada”. Pending regulatory approvals and associated agreements, the composition of ownership in this ‘LNG Canada’ project will be PETRONAS (through NMLLP), (25%); Shell Canada Energy, a subsidiary of Royal Dutch Shell plc (“Shell”), (40%); PetroChina Canada Ltd. (15%); Diamond LNG Canada Ltd., a subsidiary of Mitsubishi Corporation, (15%); and Kogas Canada LNG Ltd. (5%).
Before PETRONAS joined this consortium, Chris Newman of Energeticcity.ca, had reported that industry analysts consider the project to be a long shot. Yet in an even earlier article in Energeticcity.ca (also by Newman), B.C.’s Premier John Horgan, is reported to have said that the project will proceed “It has all of its permits in place, has social license from First Nations in the region, has the support of the community, and is waiting for economic conditions to turn around”.
According to the The Financial Post, B.C. Hydro, the Crown agency responsible for electricity in the province has been privately expressing concerns that earthquakes triggered by fracking are a potential risk to its dams.
Fracking brings dams
Fracking brings earthquakes
Earthquakes break dams
Fracking breaks dams
Apparently, concerns about this possibility were first expressed in internal documents in 2009 and it is suggested that as early as 2014, B.C. Hydro drew up an agreement with the B.C. Oil and Gas Commission (BCOGC), to create five-kilometer buffer zones around dams within which new fracking and drilling rights would not be issued.
While this alleged agreement indicates the serious concerns within BC Hydro, their public position seems a little more cavalier. In a response to Financial Times queries on this matter, BC Hydro seems to have responded with the following – “… our dams can withstand events many times larger than those associated with fracking.” The crown corporation holds that while, ” fracking does have the potential to increase natural seepage … ( this) … is an issue of increased cost, not dam safety … ”
As reported in an article arising from research undertaken as part of the Corporate Mapping Project (CMP), and in the context of what has been called a free-for-all in the energy industry, 17 organizations including the Canadian Centre for Policy Alternatives (CCPA) have called for a full public inquiry into natural gas industry fracking operations in BC. At the centre of this controversy is PETRONAS subsidiary, Progress Energy which built two massive unlicensed dams in violation of provincial environmental regulations.
These 2 dams are the largest amongst about 50 unlicensed dams that the CCPA brought to the British Colombian Government’s attention in May this year. In fact, the largest of these, the Lily Dam, is described as being 23 meters tall, the height of a 7 story building, while the threshold for the licensing requirement is 15 meters. Following on from the CCPA exposure of the situation in May, investigative journalist Andrew Nikiforuk has reported that BC’s Oil and Gas Commission (OGC) inspections revealed serious problems with 7 dams of which Progress Energy is responsible for 5. As a an initial consequence, the provincial government ordered Progress Energy to drain its two largest dams and has since government has since denied the company’s application for retrospective licensing.
Complicating the politics and the ethics of this corporate/ governmental relationship is the fact that the 2 massive Progress Energy dams, along with the 50 or so other such structures have built by energy companies on lands that are subject to the 1899 Treaty 8 made with the region’s First Nations. The Blueberry River First Nation (BRFN) lands manager Norma Pyle, affirms that the Nation has alerted the Crown about diminished water quantity, “We have been watching lake levels drop, muskeg disappear, mineral licks dry up and streams reduce to small versions of their former selves’. Further, BRFN’s legal counsel Maegan blames regulatory oversight as “hundreds of thousands of cubic meters of freshwater in their territory is being illegally impounded for oil and gas operations. ”
It is claimed that in the CMP article that documents obtained by the CCPA indicate that all of the unauthorized dams were built to trap freshwater used in the fracking process operation 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. And it is further asserted that one such Progress Energy fracking operation. using 160,000 cubic metres of water, triggered a 4.6 magnitude earthquake near Fort St. John in 2015.
There are reported to be at least 51 unregulated and unapproved dams in Northern BC built by oil and gas companies for their fracking operations. The two largest facilities, Lily Dam and the Energy Town Dam, both over 15 meters tall, are operated by PETRONAS subsidiary, Progress Energy Canada Ltd. The scale of these dams means that they should be classified as ‘major projects‘ under BC’s Environmental Assessment Act. requiring that they be assessed by the Assessment Office (EAO) prior to construction. On Oct. 31 2017 the provincial Environmental EAO rejected an application by the company seeking to exemption for these structures from an environmental assessment.The dams have reportedly been operational for many years under the watch of the previous Liberal government and the new NDP Energy, Mines and Petroleum Resources Minister Michelle Mungall is reported to have stated that their government is “reviewing the details in order to strengthen oversight going forward,”
On Oct 10th this year, while the Progress Energy application for exemption was still in progress, Okanagan Indigenous leader, Grand Chief Stewart Phillip and Ben Parfitt of the Canadian Centre for Policy Alternatives wrote that “If the EAO grants Progress’s request, it sends a terrible signal that BC really is the Wild West. Rules and regulations are simply there to be ignored.” While the EAO has finally applied its own rules, saving us from the Wild West designation, this decision leaves us wondering, how well the authors’ terms, applied to our province in the preceding years of Liberal rule. More pertinently, it leaves us wondering if, under the new NDP/Green regime, we will finally get the proper oversight of such dams and if in future there will be prior consultation with the First Nations on whose traditional lands they are being built.