Environmental Opportunities in HydroFracking

In November of 2014, President Obama stated in the press conference that he was skeptical of the claims by proponents that the proposed Keystone XL pipeline would create jobs. In its review of the project, the U.S. State Department estimated that the project would create 3,900 jobs during the two years of construction and 50 permanent jobs during operation.

With the recent Presidential election results in the United States, there are many who think that the Keystone XL pipeline project may well be approved and other controversial activities, such has hydrofracking, will also get the go-ahead by a “jobs-first” administration.

Opponents of the hydrofracking claim the environmental harm from accessing oil and natural gas from shale is not worth the jobs and cheap energy.

In Canada, fervent environmental activists have made up their minds that hydrofracking anywhere in the country is too dangerous and should not be pursued (there is natural gas trapped in shale rock deposits in various provinces including the Maritimes, Upper Canada, and Western Canada).

Opposition to hydrofracking has been so ardent that there are moratoriums on fracking in Nova Scoatia, New Brunswick and Quebec. A poll conducted by EKOS Research and released by the the Council of Canadians (a not-for-profit lobby group that is anti-fracking) claims 70% of Canadians support a national moratorium on fracking until is scientifically proven to be safe (the question asked during polling was prefaced with anti-fracking statements).

The Council of Canadians (CofC) wants no fracking in Canada because of, amongst other things, its high water use and the danger it poses to groundwater and local drinking water. It seems the CofC is of the opinion that no technology exists today that can treat the water used in fracking to acceptable levels despite the fact the wastewater generated from fracking is no more difficult to treat than industrial or municipal sewage.

Since fracking first began in 1950’s, there continues to be much research, development, and implementation of new technologies and methods for the safe extraction of oil and natural gas along with the proper treatment and reuse of water.

What is Fracking?

Hydraulic fracturing, also known as “hydrofracking or “fracking”, is a method of recovering natural gas and involves the injection of large quantities of water, sand, along with chemical additives (i.e., surfactants and gelling agents) at high pressure down a well into a rock formation. The pressurized mixture causes fractures in the rock which results in the release of natural gas or oil.

Fracking releases the petroleum products that had been embedded in the rock where they are captured at the surface along with a portion of the original fracking fluid (flowback water). The controversy around fracking is the concern of the contamination of local water supplies.

Fracking has been taking place in Canada for over 50 years. During that time, there have been over 175,000 wells drilled and not a single case of drinking water contamination has been recorded.

Environmental Issues

One of the major environmental concerns related to fracking of the water used in hydrofracking that flows back up the well (referred to as “flowback”). There are a number of options for treating the flowback including deep well injection (relatively inexpensive) to treatment prior to discharge to receiving waters (relatively expensive).

With available water be a limiting factor in the development of some natural gas resources, much focus has been placed on recycling the flowback so it can be reused in other fracture wells. Recycling flowback can offset water source requirements while avoiding the relatively high cost associated with flowback water disposal.

There is nothing special about fracking water that cannot be treated using today’s wastewater treatment technologies. According to Statistics Canada, there were 61, 572 jobs in the oil and gas industry in 2013. There were 99, 435 jobs in “Support activities for mining and oil and gas extraction” in 2013. Included in these figures are environmental jobs.

Moving Forward

The incredible natural resources in Canada have been a key to our prosperity. Tapping these resources does impact the environment. Managing and mitigating the environment impacts is important to our continued prosperity. Shutting down any development of oil and natural gas supplies is short sighted and ignores the continued advances in innovation water recycling and wastewater treatment technologies. It also destroys jobs in the oil and gas industry as well as the environment industry.

New Contaminated Sites Regulations in British Columbia

On September 21, 2016, the Minister of Environment Mary Polak amended the Contaminated Sites Regulation, B.C. Reg. 375/96 (the “Regulations”). The amendments took effect November 1st, 2017, following a 12-month transition period, and have been a long time coming, as the Regulations have been sparingly updated since its implementation in 1997.

The amendments will incorporate new soil, water, and vapour standards that were developed while taking into account a number of considerations. These include up-to-date toxicology data, the new B.C. environment groundwater model, and new deviation protocols for environmental quality standards from environmental agencies around the world. Because existing sediment quality criteria already reflect standards used throughout North America, sediment standards remain substantially unchanged.

To improve ease-of-use, the Regulations have been reorganized and consolidated into four schedules, each representing standards for an environmental medium — soil, water, sediment, and vapour. A number of Contaminants of Emerging Concern have been added, and the Regulations will now address several specific exposure/land use scenarios, setting particular soil standards for High and Low Density Residential land use, ecological impact standards for Natural and Reverted Wildlands, and vapour standards for at-surface and below-surface parkade facilities.

To streamline the soil relocation process, the new soil and vapour standards will also be used to determine when a soil relocation agreement is required to relocate soil, and leachate tests may now be used (with authorization) to demonstrate that water quality will not be impacted at a soil receiving site.

The Regulations will trigger the need for consequential amendments to the Hazardous Waste Regulation, B.C. Reg. 63/88 and Organic Matter Recycling Regulation, B.C. Reg. 18/2002, which haven’t been amended since the 1980s, to bring their standards in line with the Regulations.

Finally, to ensure standards remain scientifically and economically defensible, the Regulations will include provisions requiring the director to review the standards every five years and bring any recommended changes to the attention of the Minister.

The new Regulations will have wide reaching implications on the identification and remediation of contaminated sites, and will likely have implications for property owners across the Province. Owners and potential purchasers of potentially contaminated property should be aware of the consequences of the new Regulations.

About the Author

Luke Dineley is a partner in both BLG’s Insurance and Tort Liability Group and Environmental Law Group in our Vancouver office. Luke focuses his practice on civil litigation, with an emphasis on insurance and tort law, and environmental law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. This article published by Borden Ladner Gervais.

Court Denies Municipality Access to Industry’s Hazard Assessment Report

Decision and Implications

On October 13, 2016 the Saskatchewan Queen’s Bench in Consumers’ Co-operative Refineries Ltd. (CCRL) v. the City of Regina 2016 SKQB 335 held that information in a major instance hazard assessment report, prepared by Marsh Risk Consulting so that CCRL could obtain approvals from the City and the Ministry of the Environment (MOE) to expand its refinery, should not be publicly disclosed. CCRL had appealed decisions by both the City and the MOE to release redacted versions of the hazard assessment report to a journalist under both the Local Authority Freedom of Information and Protection of Privacy Act SS 1990-91,c L-27.1 and the Freedom of Information and Protection of Privacy Act SS1990-91 c F-22. These statutes, dealing with the rights and obligations of the City and MOE respectively, mirror access legislation both federally and in other provinces around the country.

The ruling has important implications for industries which supply technical information to regulators, particularly nuclear and chemical industries for whom security concerns must always be in the forefront.

The Accepted Facts

Crucially, affidavit evidence was introduced on appeal. The hazard assessment report was described as including typical inventory supplies, details of the design and configuration of process equipment and processing methods, operating data associated with the selected process equipment and location details of process equipment. The affidavit stated that knowledge of the inventory, in conjunction with the type of configuration and details of equipment, revealed commercially sensitive information. The CCRL employed a unique configuration of process equipment and processing methods to produce high quality petroleum products. Detailed descriptions of such process equipment and processing methods were of immense economic value to CCRL and their competitors. Six of these competitors operated refineries in Western Canada.

Arguments: Public Interest Override

The City argued that despite the mandatory prohibition against disclosure of technical, financial and commercial information supplied in confidence, the statutes gave a discretion to the City and the MOE to provide access to information in a record if disclosure of the information could reasonably be expected to be in the public interest as it relates to public health, public safety or protection of the environment and disclosure on such grounds could reasonably be expected to outweigh the importance of financial loss or gain, prejudice to the competitive position, or interference with contractual or other negotiations. The Court found that the balancing of the continuing need for confidentiality and the public interest in disclosure could best be accomplished through the severance and redaction provision in the statutes. The Court further found that the un-contradicted affidavit established a reasonable expectation of harm, damage or detriment to the CCRL and not mere inconvenience and a causal connection between the disclosure and the anticipated harm.

Security Concerns

Finally, the CCRL introduced on appeal an affidavit which stated that the hazard report provided a detailed guide to the most vulnerable parts of the refinery where accidents of the severest magnitude could occur. The consultant’s affidavit conceded that the modelling and probabilistic analysis was difficult to understand, but had been drafted to include various descriptions and graphics to help explain and reveal the specific parts of the refinery where the worst possible accidents could occur – “by distilling this information into a more digestible form, it is more accessible and may be used as a potential ‘playbook’ or instructions for any person or group interested in causing the maximum amount of damage to the Regina Refinery (and to adjacent property and persons) in the most efficient manner possible.”

The affidavit took issue with the City’s argument that the information sought to be withheld was available on public internet sites like Google Earth®. While Google Earth images were utilized as a graphic aid, they were insufficient to complete the assessment report. “…we required inventory details, details of the specific locations of numerous equipment at the Refinery, the circuitry of the Refinery, the composition of the contents of each vessel among other details that are strictly within the private knowledge of CCRL.” The consultant had to apply this proprietary information with its expertise in the use of software and the interpretation of the software results to complete the report.

The Court accepted these statements in ruling that the discretionary power to deny access to a record applied when the disclosure could threaten safety or the physical and mental health of an individual. A similar result was obtained in Ontario on December 7, 2011. John Higgins, a senior adjudicator for the Ontario Information and Privacy Commission, upheld a decision by Ontario Power Generation Inc. (OPG) to withhold ‘source terms’ – estimates of the release of radio-nuclide species from containment into the environment at OPG’s nuclear reactor sites due to postulated event sequences ranked according to the probability of occurrence (see Final Order PO-3019-F, Appeal PA08-96).

This article has been reprinted from an e-newsletter with permission from Fogler Rubinoff. It is intended for general information purposes only and should not be relied upon as legal advice.

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About the Author

Stanley Berger is certified by the Law Society of Upper Canada as a specialist in environmental law. He was called to the Ontario Bar in 1981. He joined the law firm of Fogler Rubinoff on July 4, 2013. Stanley was the founder of the Canadian Nuclear Law Organization and served as its President between 2008-2015, and remains a board member. He is also is a former President of the International Nuclear Law Association. He has taught nuclear law for the Nuclear Energy Agency in France and is an adjunct professor for York University’s Professional Master’s Degree in Energy. Stanley is the author of a quarterly publication entitled “The Prosecution and Defence of Environmental Offences” and edits an annual review of environmental law.

Stanley represents suppliers and operators in the nuclear industry on nuclear liability and regulatory issues. He provides legal advice to the Nuclear Waste Management Organization. Other clients include the CANDU Owners Group and a large Ontario municipality. His environmental practice includes litigation before courts, boards and tribunals, as well as solicitor’s work on behalf of renewable energy companies, landowners and waste management entities. He represented a First Nation on regulatory matters relating to a renewable energy project. His practice also includes the protection of proprietary information on applications before Ontario’s Freedom of Information and Privacy Commission.

Before joining Foglers Stanley served for 14 years as Assistant General Counsel to Ontario Power Generation Inc (OPG). In that capacity he provided legal services on licensing, environmental assessment, regulatory compliance, liability, security, decommissioning and waste management to the Nuclear Division of OPG. He also defended the Company on environmental matters relating to the hydro-electric and fossil divisions. Stanley provided strategic legal advice and representation on aboriginal litigation and participated in First Nation settlement negotiations.

Prior to joining OPG, Stanley served as Deputy Director of the Law Division for Prosecutions for the Ontario Ministry of Environment. In that capacity he managed the prosecution staff and helped shape prosecution policy. He appeared before appellate and trial courts and tribunals in Ontario and chaired a multi-stakeholder committee which reported to the Minister on the use by Ministry enforcement officials of environmental audits.

Stanley started his legal career as a prosecutor in Toronto’s criminal courts and in that capacity had carriage of over 20 jury trials as well as a number of coroner’s inquests.