New British Columbia Oil and Gas Law Overlooks Coalbed Methane Concerns

New British Columbia Oil and Gas Law Overlooks Coalbed Methane Concerns

Vancouver, April 25, 2008 —The British Columbia government missed an opportunity to address province-wide concerns about coalbed methane (CBM) in the recently announced Oil and Gas Activities Act. The Act does little to fix weak points in the province’s approach to coalbed methane development, according to preliminary analysis by the Pembina Institute. The Act received first reading on April 8, 2008.

“British Columbia has a poor track record on managing environmental impacts from oil and gas development in the province’s Northeast,” says Jaisel Vadgama, Senior Policy Analyst at the Pembina Institute. “When it released a new Energy Plan last year, the government said it was committed to ensuring best practices for coalbed methane. But the Oil and Gas Activities Act doesn’t take clear steps in that direction.”

CBM typically has a larger environmental footprint than conventional gas. In order to be viable, there must be more wells, spaced closer together, than in conventional production. This increases the amount of environmental impact per cubic foot of gas produced. In addition, many coalbed methane wells in British Columbia initially extract water, which sometimes needs special disposal. Groundwater extraction can also lead to changes in the water table and in stream flows.

“In certain places, the total impacts of coalbed methane development would simply exceed the limits of what is ecologically or socially acceptable,” says Greg Brown, Policy Analyst at the Pembina Institute. “Projects rarely go ahead unless an entire field is developed. Yet approvals continue to be granted on a well by well basis, without taking full-project impacts into account.”

Currently, most decisions about coalbed methane development — including road construction, well permitting, produced water handling and decommissioning — are made by the Oil and Gas Commission (OGC). The OGC does not have an automatic mandate to assess when impacts from coalbed methane projects will exceed social or environmental thresholds.

“In virtually every part of the province where coalbed methane projects have been proposed — from Elk Valley to Princeton to Hudson’s Hope to Comox to the Skeena — they are facing community concern and opposition,” adds Vadgama. “This shouldn’t come as a surprise to anyone. Until there’s a public discussion to determine whether, and under what conditions, coalbed methane development is acceptable in this province, we’re still going to be missing the most basic element of best practice on CBM: social licence to operate.”

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For more information, contact:
Jaisel Vadgama, Senior Policy Analyst
Cell: 604-992-0686

The backgrounder, Concerns about British Columbia’s Approach to Coalbed Methane Development, can be downloaded from http://www.pembina.org and http://www.afterthegoldrush.ca in PDF form. A text version is appended below.

BACKGROUNDER

When it released the British Columbia Energy Plan in February 2007, the British Columbia government made a commitment to ensuring that coalbed methane developments in the province conform to best practices.

As outlined in the Energy Plan, these practices would include

the use of the most advanced commercially viable technologies to reduce impacts
no surface discharge of produced water
and on-going, full engagement with local communities and First Nations.

To date, few legislative or policy steps have been taken to codify these best practices in regulation, although the government has clearly stated its intention to disallow surface water disposal for new projects.

More importantly, a systematic framework for assessing whether, and under what conditions, coalbed methane projects are acceptable remains absent, having neither been included in Energy Plan commitments, nor prescribed by existing legislation. Such a framework is urgently needed in British Columbia for three key reasons:

1. Impacts from coalbed methane development are typically greater than impacts from conventional gas extraction. As a result, the risk of exceeding social and ecological impact thresholds is higher.

Although coalbed methane and conventional gas drilling produce a similar end product, coalbed methane extraction has unique features because the methane is contained within coal seams. Differences include:

Coalbed methane typically requires a higher density of wells than conventional gas in order to be economically viable. Coalbed methane well densities can be one well per 320, 160 or 80 acres, while natural gas wells are typically spaced at one well per 640 acres.

Some coal seams contain water, which needs to be removed before gas can flow through the well. This “produced water” is a unique feature of coalbed methane wells that creates additional challenges. It may be lightly or highly saline, requiring careful disposal or treatment. Under certain hydrogeological conditions, removing groundwater can affect the flow and temperature of surface water in streams which in turn can have impacts on fish, including salmon.

For more information about the environmental impacts of coalbed methane, see Coalbed Methane: A Citizen’s Guide at http://www.wcel.org/wcelpub/2003/14027.pdf

2. Coalbed methane projects are not built well by well. Fields are typically developed in their entirety with hundreds of wells — or not at all. Therefore it is appropriate — and important — to consider impacts and risks associated with an entire project’s build-out scenario before granting approvals.

Current regulations in British Columbia treat coalbed methane wells like conventional gas wells, with approvals granted on a well by well basis under most circumstances. Because single well applications do not automatically trigger environmental assessments, there are few opportunities to consider cumulative impacts. This regulatory blind spot is especially problematic when it comes to coalbed methane projects since coalbed methane proponents rarely proceed without the intention of fully developing a particular reserve.

Communities should have an opportunity to assess whether the total footprint of an entire project is acceptable before approvals are granted. As part of this process, proponents should be required to fully disclose land holdings and build-out scenarios; describe plans for reducing and mitigating impacts; and compare the magnitude of likely impacts to baseline ecological information and thresholds. At every stage, adequate resources should be made available for effective community engagement.

3. Some locations where coalbed methane development is being proposed in British Columbia have little or no history of industrial development. In these relatively pristine and remote areas, the question of whether coalbed methane is appropriate at all needs to be considered explicitly — and publicly.

Coalbed methane developments are currently under consideration at coalfields in at least five different parts of the province: the Klappan region near Dease Lake; the Elk Valley area near Fernie; Princeton, in the South Central region; Hudson’s Hope in the Peace River region; and Courtenay/Comox on Vancouver Island.

The ecology and geology of some of these sites make them unlike any area where coalbed methane has been developed in the past. For example, coalbed methane has never been commercially extracted from sub-alpine and alpine regions, or from areas near salmon spawning grounds — both conditions found in the Klappan at the headwaters of the Skeena River. In this case, environmental impacts not historically associated with coalbed methane, such as effects on salmon spawning or loss of key wildlife habitat, may prove to be significant.

Moreover, while exploration wells may only cause incremental impacts in some regions, in relatively undeveloped areas like the Klappan and the Kootenays, they can lead to substantial changes in environmental quality. When coalbed methane is being considered in sensitive environments, communities must be in a position to understand and assess potential impacts early — based on realistic build-out scenarios — and be empowered to allow or fully disallow development.

Greg Brown
Policy Analyst
The Pembina Institute
http://www.pembina.org
gregb@pembina.org
250-847-3143
Box 3195, Smithers BC, V0J 2N0