Editor’s Note: Aboriginal Affairs responded to this story and their letter to the editor is included below.
By Justin Ling
Special to APTN National News
The Harper Government’s Northern Action Plan is forging ahead, and the first thing to go is local oversight for a little-known process of dealing with toxic waste water.
Until this year, the Northwest Territories local land and water boards were responsible for licensing ‘downhole injections,’ a process through which oil and gas companies get rid of the toxic fluid byproduct of drilling. To do so, the companies drill a well and, through a process similar to fracking itself, pump the liquid at high speeds into underground rock formations.
That practice required oversight and public consultations from the land and water boards, who, if satisfied, issue a Type A license.
Then, with one fell swoop of the regulatory pen, Aboriginal Affairs and Northern Development changed the rules. With no debate, and no legislation, licensing decisions regarding downhole injections were now the sole responsibility of the Calgary based National Energy Board. A notice of the change was put out in the Government of Canada publication, the Canada Gazette in November 2012.
The reason given was to “include greater efficiency in the regulation of oil and gas activities in the Northwest Territories.”
The National Energy board looks primarily at the engineering, environmental and technical side of the projects and doesn’t pretend to evaluate their social license. That, according to one board analyst, is up to the land and water boards and the companies themselves.
The change, thanks in no small part to its technical nature, garnered little attention, partially overshadowed by devolution talks between Ottawa and the territory. The Harper Government began working to axe the boards’ regulatory power on downhole injections in 2010 when it announced a broader plan for Northern development, but failed to move forward on most of the announced changes. Now, as the devolution talks near an endpoint, the government seems ready to forge on, and this change is just the first step.
According to Aboriginal Affairs and Northern Development, the department responsible for regulating the land and water board system, the axing of the need to obtain a Type A water license from the land and water boards — was due to double-regulation. They said that the NEB already oversaw the projects; therefore there was no need for the territory to license the process at all.
Numerous requests for comment from the Department of Aboriginal Affairs and Northern Development on the story, but none were returned.
It’s good timing for industry. ConocoPhillips is looking to begin a fracking well this winter, and is in the midst of evaluation by both the land and water board and the NEB. The company refused comment on most questions, responding by email that they “respect the regulatory process,” but when asked about holding public consultations, a spokesperson did say that they offered a two-day workshop and a tour of their proposed site for those involved in the regulation process.
MGM Energy, a large oil and gas company, had previously lamented the public consultation process for downhole injection at a National Energy Board conference in 2009. MGM then took aim at the territory’s environmental assessment last year after they withdrew plans for a fracking, claiming that the environmental assessment project under the land and water boards was fraught with uncertainty, could take long and could cost too much. They, and many in the territory’s business community, have pushed for the review process’ scope to be tightened.
MGM, with other oil and gas companies, have lobbied the federal government extensively on the matter. The scope of the territory’s water and land boards has been the subject of numerous meetings between a half dozen lobbyists and a handful of government MPs since 2008, according to Canada’s lobbying registry.
And the product of that lobbying appears to be the Action Plan to Improve Northern Regulatory Regimes, the Harper Government’s game plan for making the North friendlier to development. Changes to the Northwest Territories Waters Regulations, including the local deregulation of downhole injections, were included in that plan.
This change very much appears to be step one towards turning the Sahtu into the resource capital of the North. Financial independence for the Northwest Territories, which is plagued with high unemployment in certain regions, would perfectly compliment the territory’s assumption of more powers from the Federal government. Yet Ottawa seems intent on keeping control of the territory’s development review mechanisms.
Paul Dixon, Executive Director of the Sahtu Land and Water Board, said that a substantive level of oversight already exists for any waste management system, and that while the process might not be licensed by the board, they will still have the ability to consult the public on the proposed projects.
However, when the Federal government informed the other land and water boards of the regulatory change, some feathers were ruffled.
“Parties expressed concerns that the removal of the requirement for a Type A water license, and with it the requirement for a public hearing,” reads the summary of the consultation process, published in the Canada Gazette within the notification of the change.
Industry has long been “wanting to find a way to grease the skids,” says Kevin O’Reilly, of the environmental think tank Alternatives North. He notes that vesting the power to regulate downhole injections in the NEB is problematic, as the board employs only two staff in the Northwest Territories, and isn’t very present or visible in the area.
O’Reilly says that the deregulation might not have much of an impact in the short term, but he says that as more exploration begins, it will be harder to predict the impacts — especially with the fracking process, which is a relatively new and controversial process.
Shauna Morgan says that direction is causing worry. “Downhole injection is an issue that community members regularly express concerns about. It is not well understood in communities near the operations.” Morgan, a policy analyst with the Pembina Institute, says that removing any layer of public consultation “will likely breed more distrust and suspicion.”
“Projects are losing their social licenses,” says Dennis Bevington, New Democrat MP for Western Arctic. He told this journalist in a phone conversation that axing public consultations isn’t wise when there is “clear public concern” over aspects of development.
A big factor on these plans is the disposal of wastewater. Currently, companies either dispose of the water via sump, which has fallen out of fashion after several hazardous leaks, by truck, which proves costly and inefficient, or downhole injection, which has only ever been used on one site in the territory. A 2011 study for the journal of Geothermics studied dozens of fluid injection projects and concluded that, while data is still limited, downhole injections appear to cause low-magnitude earthquakes, while the long-term impacts are still unknown.
But the ConocoPhillips plan submitted to the Sahtu Land and Water Board proposes that the company ship the toxic wastewater to Alberta. With the new regulatory changes, the company could, ostensibly, later change course and begin downhole injection and avoid assessment from the Sahtu board. Dixon says he can’t think of a situation where that would happen, saying it’s a “0.1% chance.”
As of now, the future of ConocoPhillips’ project is in flux, as the Sahtu Land and Water Board has temporarily waived an environmental assessment, requesting clarification on the company’s plan. They will take time to review the project, and could opt for an environmental review later. The board could further accept or reject the project outright when they come to a decision this summer.
But other companies have walked away from the process before, citing the onerous nature of the land and water boards’ review process. The Sahtu board has faced pressure to forgo the environmental review altogether.
With Ottawa’s Northern plan finally move forward, that review process stands to become much less onerous. The government plans on merging all the land and water boards together, while a sizeable opposition says the changes will seriously impact the territory’s ability to oversee their own development projects. That fight is just around the corner.
Aboriginal Affairs response
I wish to respond to an article which appeared in the May 29 edition of Aboriginal Peoples Television Network National News entitled Government strips local oversight of handling toxic waste water in the North.
The resource potential of the North represents a tremendous economic opportunity not just for Northerners but for all Canadians. The federal government’s goals are clear: we want the North’s regulatory regimes to be more effective and predictable, while safeguarding the environmental health and heritage of the region, and providing meaningful Aboriginal consultation. Greater predictability, timelier reviews, reduced regulatory burden and reduced duplication are improvements that will position the North for job creation and long-term economic growth.
In his article, the reporter appears to confuse the process of fracking with downhole injection. I want to be clear that these amendments do not permit hydraulic fracturing – a process that is not related to downhole injection.
The use of downhole injection wells is considered common practice in Canada for the management of drill wastes and consists of disposing drill waste in conjunction with the drilling of wells for oil and gas exploration or production.
Downhole injection is one of several options for the disposal of drill wastes, however prior to these amendments it was the only option subject to duplicate approvals. This amendment aims at streamlining the approval process.
Finally, I want to be clear that these regulations were not developed without consultation as your article would suggest. Not only were the proposed changes distributed to Aboriginal organizations, northern boards, environmental organizations and other stakeholders, two rounds of consultations were also conducted between March 2010 and March 2011.
As we indicated during those consultations, proposed oil and gas activities will continue to undergo the same rigorous environmental screening and/or assessment processes and there will be no reduction of oversight to ensure environmental risks are identified and appropriate mitigating measures taken.
Natural Resources and Environment Branch
Aboriginal Affairs and Northern Development Canada