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A Closer Look at Northern BC's 'Transition' Fuel

The politics behind Fort Nelson's smash-and-grab gas industry. Last of two.

Hayley Dunning 7 Jun

Hayley Dunning just graduated from the UBC Masters of Journalism program. She specializes in science, environment and energy issues.

[Editor's note: To read the first half of this special report, published yesterday, click here.]

At Dan's Neighbourhood Pub near the outskirts of Fort Nelson, Randy Stainky takes another swig of beer and laments the straggly state of the moose he sees in the area these days.

Lana Lowe, director of the Fort Nelson First Nation Lands Department, chose the local character bar as a venue to introduce me to some of the townspeople. It happened to be Halloween, and an initial lack of costumes was soon overcome by a troop of Kiwi helicopter pilots dressed as various Sacha Baron Cohen characters (including one in Borat's "mankini").

Lowe's roots stretch much, much further back as part of the Fort Nelson First Nation, but both Stainky and Lowe's families have hunted and lived off the land for many generations. Stainky's opinion of the current state of affairs is not subtle. "The land's fucked anyway, so we might as well take what we can get."

The current state of affairs is that Fort Nelson and environs sit on top of the second-largest shale gas play in the province. Industry is moving in swiftly with a plan: extract the gas, and send it via pipelines to plants on the coast where it can be liquified for shipping to Asian markets. In a volatile market, timing is everything -- and development is happening at a breakneck speed.

As Stainky sees it, the moose are fading, animals are scarcer, and hunting is not so prosperous any more anyway; so why not at least make some fast cash from the smash-and-grab gas industry? Lowe attempts an impassioned speech declaring the land is not, in fact, fucked just yet and there's still time to do something, but Stainky throws back his beer and waves his arms to dismiss her call for action. It's done.

A fight over groundwater

There wasn't quite so much fatalism earlier the previous day on the Horn River Project Road. Some locals and I hunted for signs of a winter access road, an indication EnCana was starting to head down to the Fort Nelson River. A small pipeline is known to already legally extract water seasonally from the river, and it's around this we looked for activity, or a stockpile of supplies and equipment lying ready for construction.

We were also looking for a good spot to place a small encampment, a big tent and stove, ostensibly as a bull moose hunting camp, but with the added duty of keeping an eye on things. The land is still the Nation's territory, and they have the right, enshrined in their treaty, to hunt and trap among the pipes, wells, and rigs.

We found a good campsite by a creek, but no evidence of new activities by EnCana. I'll admit I was a little disappointed not to find a "gotcha," but when we got back to the Lands Department, Lowe was ecstatic. "That means there's still hope!" While we were away, she had been working on an ad for the local paper, proclaiming the water is sacred, and calling for action to save the Fort Nelson River, complete with an online petition.

Water is the biggest concern for Lowe, her Nation, and the townspeople. One well pad can use up to 100 million litres of water to complete its fracturing process, and although comparisons abound (for example, that's the same as it takes to produce 70 cars, or water a golf course for a week), the main concern with water used for fracking is that much of it doesn't return to the water cycle. Freshwater taken from streams and lakes is loaded with chemicals and sand and forced underground. What comes back up is often cleaned up enough to be used for multiple fracturing operations, but eventually it's too contaminated to return to the source. Treating it back to a drinkable state is not feasible in the gasfields, so it's disposed of, often in underground pockets or open surface pits.

Not only is used water sequestered underground, but while fracturing is going on, the fluid mix of sand, water and chemicals is pumped down through wells that may pass through underground aquifers. Some of this fluid, and natural gas itself, may leak into the aquifer if the wells are not sealed properly. The documentary film Gasland caused a sensation in 2010 with its shocking visuals of people in the premier American gasfields of Pennsylvania lighting their water on fire. Locals, activists and some academics argue fracking is to blame, but the jury is still out on the exact cause of the phenomenon. Some studies pin the flames on fracking-related methane migrating up through layers of rock into aquifers, whereas others point to surface sources, like rotting organic soils.

Flammable drinking water may be the result of natural seepage, but contamination issues from the extraction process have been reported, largely as a result of cracks in cement well casings. The Natural Resources Defense Council in the U.S. has a list of such incidents, in states from Arkansas to Pennsylvania. But the Canadian Association of Petroleum Producers, the advocacy group for its member oil and gas companies across the country, insists that of 175,000 wells fractured in Alberta and British Columbia, there isn't a single incident of harm to groundwater.

Piecemeal development approach

Lowe says the Nation and townspeople started raising concerns with B.C.'s permit and oversight group, the Oil and Gas Commission (OGC), back in 2009. Lowe says the OCG took all the concerns and all questions raised, and the following year held a water forum in town with the Horn River Producers Group, a collective of nine gas companies.

"They brought all their fancy slides and their graphs and their photos to pat everyone on the head and say, 'You know what, we heard your concerns, we believe we've got it covered, so don't worry your pretty little heads about it. On your way.'"

So the people had their own forum in 2012 with members of the OGC and hydrologists and an open discussion of concerns including water volume and contamination of ground and surface waters. "It was a good discussion, and a lot of people left feeling more informed and a little bit afraid of what's happening," says Lowe.

Well sites are small (a commonly-used comparison is to a two-car garage), but numerous, and by no means the only physical footprint on the land. Thousands of kilometres of lines have been cut into the forests of northeastern B.C. to allow seismic testing. Long, straight clear cuts allow equipment to probe the subsurface and look for likely gas formations several kilometres below. The lines are often wide enough for vehicles to drive down, permitting out-of-town hunters greater access to the bush. Natural hunters, predators like lynx and wolves, also get better access to prey that are forced to cross open corridors or face a few hundreds of kilometres detour.

Road dust covers berries. Fish are being pulled up with river water and left in pits on the side of the road. Beavers damn up road culverts, flood the transport network, and according to Lowe, get shot for their troubles. An investigation into "anomalous, low-level seismic events" in the Horn River Basin by the OCG concluded in Sept. 2012 that fracking was to blame, as wastewater injections pressure rock close to existing faults.

Lowe's Lands Department in the Fort Nelson First Nation is inundated with notices of applications for exploits in the territory, which are rapidly increasing in number. When she gets a minute away from responding to the patchwork of projects, she tries to convince industry and government that planning is the right thing to do. Piece-by-piece approval of individual roads, wells and water extractions completely misses the bigger picture, according to Lowe. The impacts of each project are small, but they all add together. "Negligible impact to your rights is what they say. Because it's just one well. And then we get 2,000 applications a year for wells." Between 2005 and 2011 in B.C., 8,264 new gas wells were approved by the OCG.

Natural gas, methadone of oil

And then there's greenhouse gas emissions, and the looming shadow of climate change, that somehow manage to provide a rationale for these massive extraction projects. Natural gas is touted as a "transition fuel," weaning us off carbon-intensive fossil fuels like oil and coal with cleaner-burning gas, to help us on our way to renewable energies like wind and solar.

It's like methadone helping an addict wean off of heroin. China is our shining example: a huge emerging country running on dirty coal, that releases not only greenhouses gases but acid-rain-inducing substances. Wouldn't it be wonderful if we could help them by providing them with natural gas, free of harmful side-effects, and just half of the carbon dioxide emissions?

Except the jury is still out on exactly how clean shale gas actually is. "Fugitive emissions"; seepages of methane gas from pipes and wells may add up to considerable additional greenhouse gas contributions. Methane is a far more powerful greenhouse gas than carbon dioxide (CO2). To go to market, natural gas must contain less than two per cent CO2. On average, formations have CO2 levels of two to 4.5 per cent; the Horn River Basin rocks reach 11 to 12 per cent. The excess CO2 is simply released directly into the atmosphere. While much of BC's gas is fated to be shipped to China, it will also help to power the extraction of Alberta's oil sands, an intense operation to exploit another dirty fossil fuel.

China also isn't the only potential market; Japan and South Korea are promising high prices too. But in Japan natural gas would replace the ailing nuclear industry, an already clean energy source, in terms of greenhouse gas emissions. There's no guarantee Japan won't go through a nuclear resurgence, and China may get better offers: it's closer to the relatively more developed Australian shale gas industry and likely has huge deposits of its own.

British Columbia has set itself serious greenhouse gas emissions reductions targets, which several independent reports all say it is unlikely to meet if shale gas extraction and use goes ahead as planned.

Ask B.C.'s Environment Minister Terry Lake about this, and he'll talk about electrifying the industry with hydro power and making use of carbon capture and storage. The latter is the concept of containing emissions from projects like the LNG plants, and storing them in underground formations.

This revolutionary solution, Lake assures you, will be working hard in northern B.C. within the next 10 years. But carbon capture and storage is unlikely to be the panacea it's promoted as. Test areas have shown some success, but hinging a promise of reduced greenhouse gas emissions on its large-scale implementation in the near future is pure fantasy. EnCana's Cabin Gas processing plant, currently under construction northeast of Fort Nelson is slated to be the largest of its kind in North America. The project was approved to be built "capture-ready," while carbon storage solutions were worked out, but by the time the project received environmental approval in 2010, carbon capture had silently disappeared from plans. Now, when the plant is going full tilt, it will produce 2.17 million tonnes of greenhouse gases per year.

One target natural gas development does help meet is economic, or at least it appears to. Natural gas royalties paid to B.C. totaled $367 million in the 2011/12 fiscal year, and that figure is projected to more than double by 2014/15. Jobs associated either directly or indirectly with natural gas across Canada are also predicted to double in the next 15 years, up from around 172,000 in 2010.

Risky business

When George Heyman was campaigning for nomination to be the BC NDP candidate for Vancouver-Fairview in the May elections, he was a lonely voice in his party by suggesting a temporary moratorium on shale gas development. He wanted to fundamentally change his party's position, and would rather halt further development until the environmental impacts are known, as several other jurisdictions have done, including New York and Quebec. After gaining the nomination however, he came more into line with the rest of the party. Though the New Democrats lost the election, John Horgan, the NDP's energy critic, made it clear before May 14 that the party's plan was to appoint an expert panel to assess the environmental and social impacts of fracking and LNG development.

The BC Liberals accused the NDP of opposing natural gas development, and therefore harming the province's chances of a cashing in on a fossil fuel windfall. But the numbers aren't as good as they look. Since the adoption of the latest fracking technologies that allow exploration into huge new regions, the North American market has been flooded with natural gas, causing prices to drop. In the 2011/12 provincial budget, the government expected natural gas royalty revenue to reach close to $700 million, but it only received just over half that figure. Cuts had to be made.

The Liberals are still projecting a rise in gas prices in line with an assumed global increase in demand, but gazing into crystal balls in a risky business. Although a number of LNG plants have already been approved, B.C. may still be late to the party. Prices in Asia are four to five times higher than in North America at present, but Canada isn't the only source of LNG, nor the largest, vying for those prices. The glut of gas that flooded North America will soon sweep worldwide, and it won't take much of a price drop to make exporting B.C.'s LNG uneconomical.

In the meantime, Fort Nelson will continue to hope this industry doesn't go the way of forestry, which ultimately packed up due to the housing market crash and ensuing recession in the US. And Lowe and the Fort Nelson First Nation will continue their struggle to make sure there's something left for those seven generations down the line.

'When all of the oil and gas has gone'

The day after my adventure in the gas fields, Lowe took me to lunch at her grandma's place. Adeline Dickie is 83, and is known in business as "Mukluk Mama." She hand crafts and sells moccasins and mukluks (the boot-like version of moccasins); tanning the moose hide, skinning the beaver, beading and sewing. Her wares fill a small room off the kitchen, where hot dogs and macaroni are warming on the stove, mixing with the smell of leather and fur.

582px version of Chief Sharleen Wildeman
Chief Sharleen Wildeman (centre) embraces two of the Fort Nelson First Nation's elders.

Elders like Lowe's grandma hold a special place in their community, both as holders of important cultural knowledge and as wise leaders who've seen many of the major changes that have come to their territory in the last many decades. Lowe brings a paper copy of her petition for her grandma to sign. She reads it to her and explains how the oil and gas companies take the water and don't put it back. She explains that she is sending this petition to the premier, the "big lady in Victoria," asking her for more regulation, testing and monitoring.

Kathi Dickie, Lowe's aunt and the Nation's previous chief, is also there for lunch. She spends some time reminiscing about the time before gas heating, when grandma's house was heated by a wood-burning stove. When it got to 40 below in the winter they'd all gather in one room and cover the walls with blankets, huddling around the fire. Lifting any of the blankets would reveal walls coated with frost.

Kathi says she remembers absolute poverty, and families that have been brought out of it thanks to work in the gas fields. She insists she has a more balanced view of things than her niece, and won't be talked out of it. Lowe's repeated attempts to explain that she still wants the industry to go ahead, just that she wants it be done better, fall on deaf ears.

Back in her office, Lowe leans back in her chair, pulls up the mukluks her grandma just finished making for her, looks past the ceiling, and recalls a conversation several years before. "My grandma said 'You know, when all of the oil and gas has gone, we're going to have to go back in the bush and live like Indians.'"  [Tyee]

Read more: Energy, Environment

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