Fracking in BC’s northeast

Last summer I got out of Vancouver and toured northern BC. While the trip was mostly for pleasure, my inner economist could not resist some industrial tourism and visits to resource towns and major industrial sites that are the heart and soul of BC’s resource economy. Forestry dominates near Prince George, fishing at Prince Rupert, mining up along the Stewart-Cassiar highway, and oil and gas in the northeast.

Since I work on climate and energy issues I was particularly interested in new developments related to liquefied natural gas (LNG), fracking and pipelines. 

In Kitimat, the new LNG Canada plant is being built adjacent to the Alcan Rio Tinto aluminum smelter that created the town in the 1950s. The Shell-led LNG Canada consortium includes the major Asian buyers for BC’s gas (South Korea’s KoGas, Japan’s Mitsubishi, Malaysia’s Petronas and PetroChina) and expects to export 14 million tonnes of LNG per year when complete in 2025. 

Near the LNG Canada construction site are rows upon rows of modular housing for the temporary workforce building the facility and related infrastructure, including BC Hydro upgrades to provide electricity to the plant. Once completed, LNG Canada will employ far fewer people, about 350-450 workers on an ongoing basis. For now, legions of buses transport workers around the flurry of construction.

The gas for the LNG Canada plant comes from the other side of the Rockies, on the northeast part of BC that is adjacent to Alberta. The two would be connected by the Coastal GasLink pipeline, which hit the national stage in early 2020 as RCMP raids on the Wet’suwet’en territory reignited conversations and protests surrounding the recognition of Indigenous rights and title over the land.

As I drove down the Alaska highway from Fort Nelson to Fort St. John the presence of the oil and gas industry cut into the lush northern boreal forest. Some facilities are just off the main highway but many more are along the sideroads. Near Wonawon was a big surge of development including modular housing just off the highway. All of the trucks going down unpaved roads were bringing a lot of dirt onto the main highway, and in the wet conditions I experienced mud flying off the tires of these large trucks into a muddy spray on my windshield.

Historically industrial activity tends to be in a centralized location—a mill or a plant—whereas today’s oil and gas industry is highly distributed over the land base. Tapping new supply comes from fracking (hydraulic fracking and horizontal drilling) operations that pump water, sand and chemicals several kilometres below the surface to crack gas out of shale rock formations. In 2017 some 92% of all wells drilled (and 77% of gas produced) were in the Fort St. John area, known geologically as the Montney formation.

I was able to meet up with a couple of farmers in the Dawson Creek and Fort St. John area who showed me the impacts of oil and gas development on and near their land. Neither wanted to be named due to potential consequences in their dealings with the companies, and one because he had cousins working in the industry, noting they made incredibly good money compared to other opportunities in the area.

Farmers cannot say no to exploration on their land and to eventual development through the installation of new roads, pipelines, fracking sites, compressor stations, processing facilities and water hubs. Both had tried to fight in the past only to end up in BC Oil and Gas Commission tribunals facing a small army of high-priced lawyers and technical experts. With fighting too costly, they try to make the best of the situation by negotiating better terms of surrender around siting specific infrastructure to be less damaging.

For many decades the farmers went through their annual cycles of plant and harvest and hoped the amount of rain and sun was just right. But they had not realized that they lived atop a massive oil and gas reservoir until just over a decade ago. Oil and gas companies started to move in with fracking operations and in the ensuing time they have transformed the region’s once-bucolic landscape into one littered with fossil fuel infrastructure.

When a frack is happening it’s a big deal with lots of equipment and materials on site for about a month. Fracking sounds like a jet engine to nearby farmers and it goes continuously 24-7, causing small earthquakes in the area. Next is pressure testing which is also very loud I was told. One site I saw had 54 wells on it. In addition are large trucks blasting past the house every few minutes carrying water and sand. 

As well as frack sites are compressor stations, water treatment hubs, and near one farmer, a major new gas liquids processing plant with a six-foot wide flare going off of it. Trees were dying nearby and land that had been disturbed did not grow food as well. A leak of poisonous hydrogen sulfide (a component of the raw gas extracted) from a facility with the right wind could kill within minutes, well before a leak is detected.

By night the flare stacks normally hidden by trees can be seen lighting up that normally dark rural area, plus all of the lights that illuminate the oil and gas infrastructure. 

Farmers, it turns out, have less control over their land than they had thought. They own the surface for agriculture, but the mineral rights below have been sold elsewhere. The companies have their own right to access the land to exercise their claims. For each quarter-section of land (160 acres) oil and gas companies can take over up to 40 acres (25%) for their purposes. 

Both farmers noted that their land is part of BC’s Agricultural Land Reserve (ALR), and it cannot be subdivided for agriculture. But oil and gas development overrides the ALR and companies can subdivide the land for their purposes.

Farmers do get lease payments for use of their land but the payment is based on the amount of area disturbed. So, the money is better if one site has a lot of wells compared to something smaller when it’s a similar amount of land disturbance but they don’t get as much money in lease payments.

The cold and wet conditions prevailing through June and July made 2020 a particularly bad year for farmers. That makes them even more dependent on additional lease income from oil and gas operations on their land.

Big companies can put in new roads to access their facilities on areas previously farmed, where a road was permitted but did not exist. Companies dig up substantial amounts of land to put in local pipelines for water and gas. New water hub facilities have been built to recycle water used in fracking operations (there are limits to this due to all of the contamination) as the industry’s thirst for water for fracking otherwise removes water from the natural water cycle.

Public infrastructure is also implicated. New electricity lines have been installed to provide “clean” power to oil and gas operations, part of the government’s Clean BC plan which aims to reduce emissions from gas extraction and processing while growing the amount of gas exported. Public roads also face more rapid deterioration as trucks roar down some gravel roads at a clip of more than a dozen vehicles per hour. In some cases the companies rebuild the roads, in other cases they seek out the BC government to pay for rebuilding. 

Things looked good for the industry a decade ago when gas prices were high, but they no longer are. Fracking has been a victim of its own success, with record volumes coming out of the ground, with the BC government subsidizing production in various ways, making the problem worse. Companies are having a tough time across North America and are now trying to make profits on razor-sharp margins. This means sometimes they seek to pay lower lease rates to the farmers, or cut jobs, or fail to put away reserves for cleaning up sites once the valuable fuel has been extracted. 

Clean up is a sword of Damocles hanging over the head of BC taxpayers who will have to step in to pay the bill. Already, bankruptcies have exposed sites that are un- or under-funded for remediation. And that typifies the industry: get in quickly, extract what is profitable and leave the mess for the public to clean up.

This post is part of the Corporate Mapping Project, a research and public engagement project investigating the power of the fossil fuel industry in Western Canada, led by the University of Victoria, the Canadian Centre for Policy Alternatives (BC and Saskatchewan Offices) and Parkland Institute. This research is supported by the Social Science and Humanities Research Council of Canada (SSHRC).

Topics: Climate change & energy policy, Environment, resources & sustainability, Fracking & LNG