Simpson was critical of the fact that so much water is used for hydraulic fracking.
In a statement provided by the Ministry, it says it approved a licence for Talisman Energy that allows the company to remove up to 10,000 cubic metres of water per day from the Williston Reservoir to a maximum of 3.65 million cubic metres a year. It says an environmental assessment is only done if a company asks to extract more than 10 million cubic metres a year.
The Ministry says it consulted with First Nations in March and April, as well as stakeholders and local and federal governments and determined the reservoir could handle the requested amount of water.
The company must also install an approved flow monitoring device and keep records of how much water it has extracted.
Simpson has been critical of fracking and is calling on the Province to specify a price for water used by the natural gas industry, to encourage a reduction in demand on freshwater resources.
He also says a second water licence for Cambrian Energy is expected to be approved by the end of the week.