Moving toward a new transparency, BC’s Oil and Gas Commission is ramping up their interaction with industry, government and the land.

After criticisms levied in February by the auditor general, BC’s Oil and Gas Commission (OGC) has come under scrutiny from more than government and landowners. The audit was an opportunity to turn eyes inward and do their own assessment of their role and how they are carrying that out.

“Audits are great pressure points,” said Ferguson. “One of the things that the auditor commented on, that was very appropriate from my point of view, was that improvement is needed in the transparency of what we’re doing.”

An estimated 20,400 oil and gas well sites exist in British Columbia – most in the Northeast. Predictably, issues of safety and quality of life can ignite strong passions for those potentially impacted by oil and gas activity.

Sites like these are required to be returned to pre-construction condition upon abandonment. Operators must apply to the commission for a Certificate of Restoration.

At the hub of tensions between industry, government and the public, the OGC is sometimes in the unenviable position of being accountable for decisions and policies determined by government as much as for how they interpret and implement those policies.

It’s an evolving process supported by the March 29 introduction of amendments to the Oil and Gas Activities Act (OGAA).

The policies and procedures being implemented by the OGC can, ultimately, only be as effective as the legislative framework they derive from.

And if the devil is in the details, thenit’s only because the solutions to the auditor general’s list of disappointments is found as much in new legislation as in changes to OGC practices.

“Once we get the tools better defined with the act implemented, I think that’s the time to start judging us. I’m welcoming the right kind of challenge and questioning of what we’re doing,” said Ferguson.

“What we need to do is get that criticism in ways that are defined enough that we can actually do something about it.”

From reclamation…

At the heart of the auditor general’s report is the issue of contaminated site reclamation.

The report found that there is “an incomplete inventory of contaminated sites and their status; the inability to provide information about the risk borne by the province for contaminated sites; and the need to assess provincial performance security provisions to ensure operators fulfill their site restoration responsibilities”.

Ferguson said he believes they have now identified most if not all contaminated sites and that under the province’s direction, have prioritize those on private land.

“We’re dealing with the things we know about – getting them reclaimed to environment standards and working with the landowners. I think they’ll be done over the next year or two,” said Ferguson.

“We don’t just go clean them up and walk away as soon as they’re done. There’s a couple of years we want to see soil productivity – evidence those sites are now returned to some reasonably productive state, if they’re on agricultural land for example.”

The amendments to the OGAA have provided the OGC with greater power to deal with orphan sites.

“In my view, giving the commission more flexibility in the application of the Orphan Fund is a good thing,” said Ferguson. Case-in-point: a dump site was discovered where no owner could be found. The site fell into a legislative grey area because it wasn’t an actual well. When Ferguson declared it an orphan site and used money from the Orphan Site Reclamation Fund, Ferguson said he drew criticism from the auditor general over the spending.

The amendment takes care of those kinds of situations by giving the Oil and Gas Commissioner greater authority to make determinations about sites and how they are dealt with.

They also provide greater latitude in assessing penalties on sites where the owner is known. Historically, the commission’s only choice was to shut down a site in violation of regulations.

To protect the province from having to take on thefinancial burden for cleaning up contaminated sites, one very effective safety net was in place. All operators had their producing and non-producing assets within BC assessed before being permitted to operate.

Flow Line

“I want to make sure that there’s enough producing assets for that operator that are making money over a threshold we use as a test so that, if I start getting uncomfortable, I’ll go in before it’s too late, take over the assets that are producing and use the revenue from that to reclaim and address any liability that’s out there,” explained Ferguson.

That type of action is rare and necessitates the OGC going into the business of production – not the business they want to be in.

“In the new act (Energy, Mines and Petroleum Resources Statutes Amendment Act), we’ll have the ability to have administrative penalties against a company rather than just (the choice to) shut them down or not. We want to be able to have incremental enforcement abilities and have fines and those kinds of things as you go through,” said Ferguson.

The ability to act sooner, and with an escalating series of remedies provides additional safeguards to both the public and government.

…to stewardship

“One thing…I’m particularly interested in, is finding a way to get this industry, which is very much well by well, road by road, to contribute to government’s stewardship objectives of the land at a scale that’s more relevant to some of those objectives,” said Ferguson.

“There’s nothing there yet that really drives, forces industry, to work at the scale that’s more conducive to dealing with some of those larger stewardship objectives.”

Noting that the unconventional gas plays now being developed are perhaps more conducive to that kind of work, Ferguson used the Horn River Producers Group as a prime example of what can happen.
“The producers come together and form kind of a collective group to manage that whole play area in a coordinated fashion…I think that creates a better environmental footprint. I think one of the things we’re going to try to do is accelerate that kind of thinking.”

There are other industries on the ground in BC, and Ferguson knows that he can help provide only some of the pieces to the solution. But, he adds, if he can spur the petroleum industry to interact with the forestry sector, for example, he will at least know he isn’t “an impediment to getting to a solution for cumulative effects”.

“If we can do that, wow, that’s pretty amazing stuff,” he said. “The new act is going to help us in a number of ways to get there but we’re taking some of that now without the new act so that tells you there’s a little bit of thinking going on at the old Oil and Gas Commission.”

The auditor’s report acknowledged “the OGC has supported the development of some tools and methodologies to assess cumulative effects”, they also pointed out that “no formal provincial program is yet in place to help manage the environmental effects of developments on the land base.”

Their recommendation was to have the OGC work in conjunction with key government ministries and other stakeholders to assist in developing a formal program for conducting cumulative effects assessments.
For that to happen, relationships must be strengthened with a view to collaborative action and that is happening already, said Ferguson.

“I met with the Agricultural Land Commission CEO Erik Karlsen and we started to map out a new approach, a partnership between us, on how we are going to collectively do a better job of managing the oil and gas and agricultural interface in the Peace,” said Ferguson.

Recognizing the relative importance of the oil and gas industry as a non-renewable resource and agricultural land as a renewable one was a first step in protecting the province’s agricultural resources from industrial activity.

Ferguson plans to continue discussions until a defined plan takes place, which can then be brought forward to the public for consultation and feedback. If things go the way Ferguson plans, there will be something concrete in place this year.

“I think we’re going to start a process here in consultation with the public and the stakeholders out there to really raise the bar in terms of how we are working together to better manage that agriculture resource,” he said.

“The big key here is around the reclamation. OGAA is going to help us because it gives us more tools and…I think putting those pieces together, there’s a window of great opportunity here.”

Reclamation goals were the focus of the auditor general however, the OGC is taking those values and ideals and asking how they can implement them on a larger scale than has been done in the past.

Going Forward

“As we go forward, my objective would be to have a culture here, and a way of working, that we tell people what we’re doing before we’re asked,” said Ferguson. “If we can get to that kind of thinking then people should have more confidence in what we’re trying to do out there.”

For the next few years, ‘there’ to a large extent is going to be the South Peace and addressing the concerns of those communities.

The shift of activity from the North to the South Peace was identified a few years ago. In response, the OGC opened a new office in Dawson Creek so they could be where the activity is heating up and were they could be on the ground to ease the transition for the people of the area, many who were not accustomed to the level of activity that they are now immersed in.

For the last 18 months, detailed data has been collected on the kinds of concerns residents are coming forward with so that over time, the trends can be identified and efforts to provide information and solutions can be targeted appropriately.

Issues of safety and quality of life are both being given greater attention and some important changes have already been implemented within the last several weeks.

“We’re pretty comfortable with all the tools that we have in terms of separating safety issues from quality of life issues,” said Ferguson. It is perhaps the quality of life issues that provide the greater challenge because unlike safety – where one size fits all – quality of life is subjective and changes from person to person.

As the amount of interface between staff and landowners increases, staff spends more time trying to identify what those quality of life issues are and how to provide relief for people, said Ferguson.

Just as legislation has had to adjust to provide clarity, policies will have to adjust to address the needs of those most affected.

Whether the concern is about air quality, setbacks, or dust and traffic, the key will be to keep the flow of information open between the public, industry and government.

“We have an obligation to make sure we’re out there more and it’s arguable whether we’re doing enough. I would argue we’re probably not doing enough – yet – and I don’t know when enough is enough but I’m sure we’ll work our way toward that end at some point.”

“We started talking to those people that we don’t hear from. I get 100 per cent sample from the people that are having trouble…we hear about it, we hear about the issues. I get a zero percent sample of the people that aren’t having trouble. So if we’re designing some policy, or change in our process or want to advise government…we probably have an obligation to sample at least some of those people as well,” said Ferguson.