July 13, 2020
Note: The Water Sustainability Act is the law governing water use in BC. Knowing what the law says is vital. However, it is as important for the public to also understand why the law says what it says. A better understanding of “why” allows: 1) better citizen appreciation of what the WSA is trying to achieve for BC, 2) misunderstanding and fears about the WSA to be reduced, and 3) options to improve the WSA to be identified and debated in future amendments – hence my posts.
I am in a unique position because I was involved in the process to develop the WSA and regulations, so I have knowledge not only of “what” the law says, but also insight as to “why” it says what it says. I try to be as objective as I can in my posts but my own views and interpretations do percolate through in places.
This post is about exempted use of deep groundwater for the oil and gas industry in Northeast (NE) BC, and my thoughts regarding the exemption and the role of the current WSA in regulating use of deep groundwater in NE BC.
In 2015/16 when the Water Sustainability Regulation (WSR) was being developed, oil and gas prices were dropping. The BC government’s hope was to develop the shale gas fields in northeast (NE) BC to increase revenue but in doing so also incentivize the oil and gas industry to use saline groundwater from at depth to relieve the demand on shallow freshwater resources. The BC government also wanted to minimize “red tape” for the oil and gas industry, given the industry’s claim that oil and gas activities were already adequately regulated under the Oil and Gas Activity Act and the Drilling and Production Regulation. The Ministry of Environment and Climate Change Strategy – ENV was directed to consider exemptions in regulation under the Water Sustainability Act to make it easy for the oil and gas industry to access the fracking water for Liquified Natural Gas (LNG) development, focused mainly in the NE region of the province.
In Alberta where many of the oil and gas companies are based, exemptions for the diversion and use of “saline” groundwater are based on water with a mineral content (total dissolved solids -TDS) of more than 4000 milligram per litre of water (mg/L), regardless of depth. This “saline water” is exempt from the licensing process under the Alberta Water Act. The TDS threshold of >4000 mg/L appears to be based historically on the feasibility of treating water with that mineral content.
A TDS threshold in BC of >4000 mg/L (or even the USEPA threshold for saline groundwater of >10,000 mg/L) is subject to spatial and temporal variability. For example, in NE BC, groundwater with TDS of several thousand mg/L do occur in shallow aquifers. Spatial variability in TDS could mean an exempted use (typically of larger quantity) can exist in proximity to domestic and licensed uses of groundwater. Also, what if the TDS level periodically fluctuates above and below the TDS threshold limit?
In considering an exemption for using deep, saline groundwater, the following considerations were objectives for the BC government to attain:
- Adequate separation between the exempted use and other uses,
- A threshold that is less subject to spatial and temporal fluctuation and allows only saline groundwater to be diverted,
- Clarity in the priority of the exempted use to other (licensed) water uses, and
- Authority in the WSA for remedy when a problem arises.
The BC government eventually established a threshold based on depth and geology, two characteristics that do not change with time (at least on a human time scale). Groundwater (of any quantity) can be diverted for oil and gas purposes without a licence in NE BC if the groundwater occurs:
● Below 600 m, or
● Below the base of fish scale but never less than 300 m depth.
The base of fish scale is a regionally recognized geological marker bed (formed about 100 million years ago) containing abundant fish scales. The base of fish scale rises from depth near the Rocky Mountains to the NE corner of BC (hence the required minimum depth limit of 300 m). The Ministry of Energy, Mines and Petroleum Resources and the Oil and Gas Commission claimed that the groundwater below these depths would be saline (>>4000 mg/L TDS). The typical water well is also not drilled to those depths.
Specifying a depth to describe the exemption provides at least some separation between the diversion of deep groundwater from the shallower water wells. By specifying an exemption based on depth and geology, the saline nature of the groundwater at those depths is simply implied and therefore the Water Sustainability Regulation uses the term “deep groundwater” (without the word “saline”). So what about the question of whether groundwater below 300-600 m depths and below the base of fish scale marker is saline or not? One way for the BC government to confirm this claim is by requiring water samples to be collected by the user (as a condition of the permit for water source wells under OGAA) and publishing maps of TDS concentrations relative to the depth and base of fish scale.
A significant concern that the oil and gas industry has in diverting exempted saline groundwater in Alberta is that the saline water has no priority under Alberta’s water rights system; use of saline groundwater can not be licensed. If there is a conflict with a licensed user, the licensed user has priority. If there is a conflict between exempted users, it is solved between the parties.
In BC, use of deep groundwater is licenseable under the same system of priority as other water rights (First-in-Time, First-in-Right) but the option exists to use (unlimited amounts of) deep groundwater in NE BC without a licence so long as the water being diverted is “not recorded”, not licensed or allocated to someone else. This means that without a licence, the water being diverted, although allowed, does not have protection under a water right.
The WSA exemption does not prevent an oil or gas company from securing their access to this deep groundwater by acquiring a water licence. However, inquiry to the Oil and Gas Commission indicates that, to-date, none of the oil and gas companies using deep groundwater in NE BC have applied for a water right. The reasons for not applying is unknown. Annual water rentals for using deep groundwater in BC, even under a licence is $0.00. Maybe oil and gas companies mistakenly believe that, as in Alberta, a licence is not obtainable for use of deep groundwater? Maybe companies are concerned about the duty to consult First Nations and rights of objection under the licensing processes?
The Water Sustainability Regulation does give the water manager authority to order diversion of deep groundwater in BC to be stopped if there is reasonable evidence that the diversion is affecting or will affect other users with water rights. While the regulation seems to restrict authority to deal only with impacts on water rights, there is authority under the WSA (section 58) to deal with impacts on water quality or the aquatic environment.
As to the effectiveness of the WSA authority, how would a water manager ever obtain evidence if the diversion is not licensed and subject to any monitoring requirements under the WSA in the first place? The water manager must rely on complaints that come forward and only act if the impact on other water rights can be readily confirmed.
Given that the diversion of deep groundwater is also permitted under the Drilling and Production Regulation under OGAA, any complaints that arise would most likely be dealt with under OGAA, not the WSA. This essentially renders the WSA irrelevant with respect to addressing any problems related to use of deep groundwater for oil and gas purpose unless:
● oil and gas companies decide to acquire a water licence for diverting and using “deep groundwater” to protect their use from competing oil and gas companies operating in the same area or
● in the future, “deep groundwater” in NE BC is also used for other water use purposes under a licence (e.g., geoexchange).
Only when there is a potential for conflicts over water rights will the Water Sustainability Regulation and the WSA play a more central role in regulating use of deep groundwater in NE BC. The BC Oil and Gas Commission who administers both the WSA and OGAA, will most likely rely on OGAA regulatory tools to address any problems related to diversion and use of deep groundwater in NE BC.
From a regulatory perspective, access to deep groundwater for the oil and gas industry became even easier when the BC government provided an additional exemption in 2019 for large diversion of deep groundwater (e.g., >75 L/s) for oil and gas purpose from the Reviewable Project Regulation under the Environmental Assessment Act.
D. Forsyth provided input to this post.