British Columbia

Energy analyst calls on province to create new agency to monitor oil and gas industry ahead of LNG boom

A new report says B.C.'s Oil and Gas Commission has failed to adequately monitor industry activity in northeastern B.C., and is calling on the NDP government to create a new agency to regulate natural resource companies before an expected LNG boom takes off. 

'This is a captured regulator in need of reform,' says report's author, Ben Parfitt

Oil and gas activity concentrated in northeastern B.C. is not being properly monitored by the province, a new report from the Canadian Centre for Policy Alternative argues. (Andrew Kurjata/CBC)

A new report from a B.C. think tank says B.C.'s Oil and Gas Commission has failed to adequately monitor industry activity in northeastern B.C., and calls on the NDP government to create a new agency to regulate natural resource companies before an expected LNG boom takes off. 

The author of the report, Ben Parfitt, accused the Crown corporation of serving the interests of the industry and a provincial government that promotes fossil fuel development ahead of the public interest.

The report, released Wednesday by the Canadian Centre for Policy Alternatives. says that before the commission's genesis, companies had to apply to numerous provincial ministries and branches to obtain authorizations before drilling for natural gas could begin.

These included the Forests Ministry, which issued permits to log forests for roads, pipeline corridors, well pads and more; the Ministry of Lands, which approved the occupation of Crown or public lands; the Heritage Conservation Branch, which issued archaeological permits; and the Environment Ministry, which handed out water permits and approvals governing industrial activities in sensitive fish and wildlife habitats, it says.

Parfitt said after the commission was established in 1998, the review and approval of industry development applications accelerated.

As well, fines handed out by the commission were often "dramatically" below the maximum penalties allowed, the report said.

Calls for reform

The report cited 12 cases in which companies "forged archeological records, allowed contaminants to spill onto adjacent properties and into fish-bearing streams, failed to remove toxic chemicals from fracking sites, unnecessarily flared gas and improperly disposed of toxic wastewater" resulting in a combined penalty of $92,750 — well below the maximum of $5 million.

"The fact that companies have really have not faced any significant sanctions for violating the rules, I think it adds to the impression that this is a captured regulator in need of reform," he told CBC Daybreak North guest host Wil Fundal.

In a response to a query from CBC about the report, commission spokesperson Lannea Parfitt (no relation to Ben Parfitt) said the organization would not respond until after reading and assessing the findings.

But Lannea Parfitt said in an email the commission enforces "strict laws and regulations, ensuring infrastructure is built safely" and "highly skilled professionals work to protect public and environmental safety, while balancing a range of environmental, economic and social considerations."

Parfitt said the examples cited show there is an extreme reluctance on the part of the industry regulator to hold the companies it regulates to account.

There will be a significant increase in oil and gas industry activities once liquefied natural gas plants are built on the B.C. coast, which will lead to an increase in drilling and fracking, Parfitt said.

He said there's been a reluctance on the part of one provincial government after another to deal with the Oil and Gas Commission.

To ensure compliance, the report recommends the creation of an arm's length agency to oversee regulatory compliance and enforcement and that a single water authority be reinstated to regulate all water users in the province.

The Centre for Policy Alternatives describes itself as a source of progressive policy ideas and says its values are rooted in social justice and environmental sustainability.

Written by Andrew Kurjata. Interview with Ben Parfitt produced by Betsy Trumpener for CBC Daybreak North.

With files from The Canadian Press

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