Canada Energy Partners appealing OGC Suspension Order of disposal well near Peace Canyon Dam

The Peace Canyon Dam. Photo by BC Hydro.

FORT ST. JOHN, B.C. — Canada Energy Partners is appealing a decision by the B.C. Oil & Gas Commission to suspend the company’s permit to operate a water disposal well that is located in close proximity to the Peace Canyon Dam, less than a year after a report was released saying that BC Hydro was concerned about fracking operations near their dams.

The location of Canada Energy Partners’ disposal well that was issued a Suspension Order by the BC OGC. Photo by Canada Energy Partners.

The OGC issued Canada Energy Partners with the suspension order on March 16th, one day after after BC Hydro informed the OGC about their concerns with the disposal well, which is located approximately 3.3 kilometres north of the Peace Canyon Dam. Canada Energy Partners was originally issued a special project order to operate the disposal well in 2008.

The company says that from December 2008 to April 2010, 102,000 cubic metres of produced water was disposed of in the well before suspending operations in August 2011. In their suspension order, the OGC states that after the project order was amended in March of 2014, CEP was able to meet those criteria and had recently resumed disposal operations at the well. CEP stated that between January 4th and March 16th of this year, a further 16,056 cubic metres of produced water was disposed of at the site, roughly 15 percent of the previous amount.

On March 30th, Canada Energy Partners filed an appeal of the suspension order at the Oil & Gas Appeal Tribunal. CEP’s President and CEO Ben Jones said that the company filed to appeal the suspension because they were not afforded due process, prior notice, or the opportunity for any input. “The only notice we got was: shut it in,” said Jones.

“According to the OGC rules, we should have an opportunity to respond before you revoke a permit, and we didn’t have that opportunity. We are in the appeal process, and we think we’ve been treated unfairly. We think we should either get our permit back, or if BC Hydro wants to expropriate our well they can do so. But we don’t think it’s right just to take our permit away and bear 100 percent of the loss.” A full copy of Canada Energy Partners’ appeal can be read below.

The Oil and Gas Commission’s Director of Communications Phil Rygg said in an email that since 2014, no new requests for subsurface rights within 5 kilometres of the WAC Bennett, Peace Canyon and Site C dams have been accepted by the OGC. “In terms of tenure that existed before 2014, the BC Oil and Gas Commission considers public safety or environmental protection when issuing any permits,” stated Rygg. “The Commission took action in order to have the time to better understand how this activity could potentially trigger ground movement that might have an impact on the dam.”

In a statement on March 27th, BC Hydro said that, “Water disposal activity can cause significant ground motion that has the potential to damage our facilities when in close proximity. Disposal wells have been known to cause stronger seismic events over a larger area than those caused by fracking, so a 5-kilometre buffer zone will not be sufficient for these projects. As a result, it is our understanding that the suspension order will remain in place until the OCG, working with BC Hydro, determines the appropriate course of action.”

In their appeal, Canada Energy Partners refutes BC Hydro’s claim that disposal wells can cause stronger seismic events over a larger area than those caused by fracking. The company says that their well was limited to 6,200 kPa injection pressure, and that the pressure has never exceeded 5,200 kPa. This compares to the nearest analog disposal well, which CEP says was granted a maximum limit of 14,000 kPa.

On August 17th, 2016, the Canadian Centre for Policy Alternatives published a report that said that BC Hydro has been worried about damage to its dams caused by fracking-triggered earthquakes for years. According to the report, this isn’t the first time senior officials at BC Hydro were concerned about Canada Energy Partners operations in the area of the Peace Canyon Dam.

In December 2009, Hydro’s concerns were about the plans of Hudson’s Hope Gas, a CEP subsidiary, to extract methane gas from coal seams near the dam. Ben Jones says that his company later scrapped those plans after natural gas prices continued to stay low after falling in 2008. A full copy of the CCPA’s report, titled “Big dams and a big fracking problem in BC’s energy-rich Peace River Region” can be read below.

 

The Oil and Gas Commission’s Executive Director of Public and Corporate Relations Graham Currie says that the Commission is assessing further technical information to decide if continued suspension of the disposal well is warranted. At this time, it is not known when the appeal will be heard by the Oil and Gas Appeal Tribunal.