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Petronas Subsidiary Built Unauthorized Dams For Fracking: Report

CCPA investigation finds fracking companies built dozens of dams, some five storeys high, without permits.

Andrew Nikiforuk 3 May

Andrew Nikiforuk is an award-winning journalist who has been writing about the energy industry for two decades and is a contributing editor to The Tyee. His award-winning book, Slick Water, documents the Jessica Ernst case and the history of fracking. Find his previous stories here.

A subsidiary of the Malaysian oil giant and LNG proponent Petronas has been building unauthorized dams to trap water for mega-fracking that has triggered unprecedented seismic activity in northeastern British Columbia.

Progress Energy has built at least 16 unauthorized dams in the Montney basin, says a report by journalist Ben Parfitt for the Canadian Centre for Policy Alternatives. The structures are among “dozens” of unauthorized dams built by industry in the region, the report found.

Two of the earth dams constructed by Progress Energy are higher than a five-storey building, the report says.

Due to their size and water-holding capacity, the report says, these dams should have triggered an automatic review by the province’s Environmental Assessment Office (EAO) prior to construction. But Parfitt found there was no review before the dams were built.

Only now is the office investigating the unauthorized dams.

Progress Energy built the dams between 2012 and 2014 on Treaty 8 land north of Fort St John in order to store surface water to supply its extensive hydraulic fracturing operations in the Montney basin gas fields.

The controversial fracking technology injects a high-pressure mix of water, chemicals, gases and sand into the ground to fracture rock so it can release methane and natural gas and associated liquids.

Fracking has triggered more than a thousand earthquakes in the region since 2008 and changed seismic patterns so dramatically that experts are increasingly concerned about the safety of dams in the region.

“Either the regulator knew these dams were being built and didn’t do anything or they didn’t know and didn’t do anything. In either case we are experiencing a meltdown in regulatory oversight,” Parfitt told The Tyee.

Progress Energy issued a statement saying the dams complied with BC Oil and Gas Commission requirements when built.

“Progress Energy had the required short-term use authorizations in place when the dams were constructed,” said David Sterna, director of extenal affairs and communications. The company is now working with regulators to ensure all its dams comply with the 2016 Water Sustainability Act, he said.

The company has indicated to the Environmental Assessment Office that it intends to apply for an exemption for the dams under Section 10 of the Environmental Assessment Act. The provision allows the EAO’s executive director to exempt projects from review.

According to the BC Oil and Gas Commission’s already dated 2016 report on water management, “Progress Energy Canada Ltd. used the most water (3.3 million cubic metres) and completed the largest number of wells for hydraulic fracturing in 2015.”

Parfitt’s investigation also discovered that the commission ordered Progress Energy to empty another unauthorized dam due to concerns about the risks it posed to a nearby gas processing facility.

A 2017 study found Progress Energy set off a 4.6 magnitude earthquake felt 180 kilometres away when it injected 160,000 cubic metres of water — 42 million US gallons — below ground at high pressure over a period of several days. The mega-frack represents almost eight times more fluid than an average fracking operation pumps into the ground in the United States.

Researchers concluded that ground motion from this event “could have exceeded the damage threshold of structures if it had happened in a populated area.”

Both the BC Oil and Gas Commission and seismic experts have raised concerns about earthquakes triggered by fracking operations because of the risks posed to groundwater, existing oil and gas infrastructure and public safety.

BC Hydro officials have also raised concerns about the impact of fracking-triggered earthquakes on the safety of its dams in the Peace River area.

According to Gail Atkinson, a professor at Western University and seismic hazard expert, earthquakes triggered by hydraulic fracturing can exceed the natural quake hazard, posing unanticipated risks to dams and other infrastructure.

“Wow,” Atkinson said when she learned about the unauthorized dams near fracking sites.

“Any unauthorized dam of significant size is a source of concern,” said Atkinson whose research has alerted regulators to the hazards posed to dams and other infrastructure by shallow industry-made earthquakes in Alberta and B.C.

“Dams are supposed to be highly regulated for a reason,” she said. “The Canadian Dam Safety Association puts out extensive guidelines on the engineering requirements for such structures — though they note that the standards do not actually have the force of law.” (Water and dams are provincially regulated.)

“I would expect the province to take a firm stand on authorized dams of significant size that could pose a safety or environmental hazard. To use an analogy, if you constructed a five-storey building without getting a building permit, how would that go over?”

At a meeting of the Seismological Society of America last month, Atkinson proposed a two-pronged strategy to deal with the risk of industry-triggered ground shaking.

She proposed creating five-kilometre exclusion zones in fracking areas “to ensure the integrity of those few facilities whose failure consequences are unacceptable.”

In addition to specific exclusion zones around critical infrastructure, Atkinson also recommended that regulators track seismic events of magnitude 2.0 or greater with real-time monitoring within 25 kilometres of fracking operations and use the information to reduce the risk of public hazard.

The full extent of the unauthorized dam building is not yet publicly known, but there may be as many as 200 dams in the region built by oil and gas companies trying to store millions of gallons of water for some of the world’s largest fracking operations, Parfitt found.

Ali Mahani, a consulting seismologist with the Induced Seismicity Monitoring Project, recently told the Tyee that “information on the volume of fracks is very hard to acquire since these are confidential data companies usually don't share because it contains information on the reservoir capacity. Right now I don't have access to such valuable data.” The monitoring project is a collaboration between Geoscience BC, the Canadian Association of Petroleum Producers and the BC Oil and Gas Commission.

The Montney basin, which covers 130,000 square kilometers, is prized by oil and gas companies suffering from low methane prices because it is rich in natural gas liquids. Canada’s bitumen’s industry buys these liquids to dilute bitumen so they can move the dense and heavy crude through pipelines.

According to the National Energy Board the tar sands now account for almost one-third of Canada’s natural gas demand. In 2005, the bitumen industry used just 12 per cent of the nation’s gas production.  [Tyee]

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