Canada: B.C. Court: No Abuse Of Water Approvals For Fracking

Last Updated: December 5 2014
Article by Jennifer Kalnins Temple

Because fracking consumes a huge amount of water, Western Canada Wilderness Committee (WCWC) and the Sierra Club of B.C. recently challenged how the B.C. government grants water use approvals to oil and gas companies. The government gives a series of short term approvals for fracking, frequently renewed, without regulating the cumulative water taking of an entire project.

Does this violate B.C.'s Water Act. WCWC et al. v. B.C. (Oil and Gas Commission) et al., 2014 BCSC 1919?

At issue was the interpretation of s. 8 of the Act and, specifically, whether the provincial oil and gas commission (OGC) was abusing the power to grant consecutive short-term approvals in lieu of longer licenses which theoretically require greater environmental review.

Section 8(1) states:

If a diversion or use of water is required for a term not exceeding 24 months, the comptroller or a regional water manager may, on application, without issuing a licence, grant an approval in writing, approving the diversion or use, or both, of the water on the conditions the comptroller or regional water manager considers advisable.

The Court pointed out that oil and gas companies "use" less than 1% of all surface water allocated for use in B.C. and that hydro power is allocated greater than 90% of all such approvals. WCWC, supra at para. 16. Oil and gas operators typically require water use for geophysical exploration, drilling, winter road construction, well drilling and the testing of pipelines, for example. The Court also cited statistics from 2012 that show approvals for fracking were actually on a downward trend compared to 2009. Moreover, the OGC has developed policies regarding short-term approvals for fracking; such approvals are generally not permitted beyond 12 months even though the maximum length possible under the statute was recently amended from 12 to 24 months.

Policy and practice aside, in answer to the legislative interpretation question, the Court held that:

[115] On a plain reading of ...[the] Act, in context with the scheme of the Act, the object of the Act, and the intention of the legislature, there is simply no prohibition relating to consecutive short-term water use approvals or even recurrent approvals lasting in total in excess of 24 months....

[116] While s. 8 of the Water Act refers specifically to a "term not exceeding 24 months", there is no basis upon which to infer an intention to prevent someone who had received the same type of approval from re-applying for the same or similar permission. From a public policy perspective, it is difficult to discern any difference between this situation and that where a completely different party may come along and apply for the same or a similar approval. In either case, ... the Commission ha[s] the statutory authority to consider the application and make a decision based on the present information before them.

[117] If the intention of the legislature was as is contended by the Petitioners, then it could have easily specified "one term" or even "multiple terms not exceeding 24 months".

[118] Where the language of the legislation is clear and unequivocal, the court should not read-in a prohibition against recurrent approvals [other citations omitted].

The Court also referred to the legislative history, for the amendments which came into effect in 2013 lengthening the period of short-term allowances from 12 to 24 months, and cited then Minister of Environment, Barry Penner, as stating the purpose of the amendments was to "reduce the 'administrative burden' being placed on the ministry, not to prohibit the existing practice of 'rolling over' the approvals." Id. at 131.

Ultimately, the Court suggested that the concerns of the petitioners were overblown:

[141] .... While I agree that short-term approvals were not intended to provide long term water rights, that does not foreclose the ability of a person to apply for and obtain a series of short term approvals, which, again, are all granted pursuant to fresh or new applications that are reviewed and assessed ... on a de novo basis each time. In that way, while perhaps not as extensive as those in relation to a licence, it is the case that there are also "checks and balances" in the s. 8 approval process....

[144]...There is nothing to indicate that previous holders of s. 8 approvals are somehow "grandfathered" or favoured in respect of any application for a new s. 8 approval.

WCWC and the Sierra Club were represented by Ecojustice. Just days before the case was heard in court, the B.C. government introduced its new Water Sustainability Act, which Ecojustice says is targeted precisely to address the point of the lawsuit, i.e., to expressly legitimize consecutive short-term approvals.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Jennifer Kalnins Temple
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