Friday, April 1, 2011

Auditor General: oil and gas production oversight needs improvement

The Auditor General of BC today reinforced warnings raised repeatedly at Northern Insights about the inadequacies of oversight and regulation in the northeast oil and gas industry. Mainstream media in this province have ignored these issues and, in the case of Global TV and the now Postmedia Network newspapers, joined industry in the campaign "A New Energy Future" aimed at ameliorating public concerns about environmental contamination by producers.

One troubling aspect of this report from the Auditor General is its limitation in scope. They sought to determine if the province is "providing adequate oversight of upstream oil and gas site contamination risks." (Upstream processes include exploration, well completion and production.) However, in the 48 page report there is no mention of hydraulic fracturing or fracking. Water is barely mentioned.

Nevertheless, the AG notes that a range of site contamination can occur and there exists a potential for environmental and human health impacts. The report also identifies the risk of operators not fulfilling their statutory responsibilities, resulting in costs transferred to the public. Regardless of specific details, the Auditor General finds:
  • "... oversight of the environmental and financial risks associated with oil and gas site contamination needs improving.
  • "Improvements in the regulatory information collected and oversight procedures are needed.
  • "Public information provided by the [BC Oil and Gas Commission] on oversight activities is not sufficient to allow the Legislative Assembly and public to understand how effectively oil and gas site contamination risks are being managed."
The BC Liberal Government has followed a strategy of budget cutting that has eliminated much of its former capacity for oversight, relying instead on self-regulation by the parties responsible for threats to the environment. Truly, a case of foxes guarding the hen houses.

I asked the Auditor General if a separate examination is underway to review hydraulic fracturing and industrial water use in the northeast but have not yet had reply.

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