Oil and Gas Development: Done Responsibly for the Right Reasons

Contributed to BC Oil & Gas Report
Geoff Morrison
Manager British Columbia
Canadian Association of Petroleum Producers
September 01, 2015
British Columbia has a long, successful history of responsible natural gas development that’s contributing significantly to the economic prosperity of the province.

We have world-class resources, and we develop them under an excellent regulatory regime and world leading industry best operating practices. These are designed to ensure natural gas and oil are produced in an environmentally and socially responsible manner.

Upstream natural gas and oil operations in British Columbia are regulated by the B.C. Oil and Gas Commission, an independent regulator with a mandate to ensure oil and natural gas resources are developed in the best interest of the province, protecting the public and the environment.

Natural gas and oil resources have been developed in northeastern B.C. for decades. Wells have been hydraulically fractured since the early days, but innovation in drilling has meant more gas has become commercially viable. Technology enables industry to access natural gas from the source rock deep underground in addition to conventional geological formations.

Transparency is important to ensure public trust, and as of January 1, 2012 the public has been able to review the composition of fracturing fluid and water volumes used in any well drilled in B.C. at www.fracfocus.ca. After decades of operations in B.C., about 9,000 wells have been hydraulically fractured without a documented case of impact on drinking water, according to the B.C. Oil and Gas Commission (OGC).

The OGC publishes a Quarterly Oil and Gas Water Use Summary which reports all short-term water use and water license data. Building on the existing strong water stewardship regime of the OGC, and five ministries with water management responsibilities, the B.C. Government announced the Northeast Water Strategy in spring 2015. The Strategy is a long-term approach for the sustainable use and management of water resources by all resource sectors in Northeast B.C.

The strategy’s goal is “the responsible use and care of water resources through conservation and sustainable practices to ensure human and ecosystem needs are met now and into the future.”

The B.C. Ministry of Health’s Northeast Oil and Gas Human Health Risk Assessment Study was released in March 2015 after three years of consolations and research.  It included an extensive review of peer-reviewed scientific literature, regulatory and policy frameworks, and industry operating practices focusing on assessing emissions from natural gas processing plants and oil and natural gas production facilities. The study concluded public health risks associated with the development of natural gas and oil in the region around Fort St. John are low.
The International Energy Agency estimates that global demand for natural gas could increase up to 55 per cent by 2040. B.C. produces four billion cubic feet per day, or 1.5 trillion cubic feet annually – one year of natural gas production is enough to meet the residential demand of the entire province for 21 years.

B.C.’s ability to operate at a leading standard in combination with abundant energy resources means there is an opportunity to supply global markets. For example, the Montney Basin is just one of four major unconventional natural gas basins in the province and has an estimated 271 trillion cubic feet of marketable gas.

Of the 1.5 trillion cubic feet produced each year, 16 per cent is used in B.C., 43 per cent goes to the rest of Canada and 41 per cent is exported to the United States. Our traditional markets in Central Canada and the United States, however, are declining because of abundant supplies closer to these markets. For example, the U.S. Energy Information Administration estimates that by 2030, the U.S. the U.S. will be producing enough natural gas to match the consumption of the entire United States and all of Canada.

While the entire province benefits significantly from resource revenues, royalties and land right sales, many northeastern B.C. communities depend on the natural gas industry to support their families.

According to the Canadian Energy Resource Institute, B.C.’s natural gas industry employs 12,000 people and that number could rise to 40,000 by 2035. The provincial government states that in 2014/15 fiscal year the natural gas industry paid nearly $1.4 billion in royalties and rights acquisitions. This money helps pay for public infrastructure such as roads, schools and hospitals.

Economic benefits and responsible resource development are achievable together, and B.C. is in position to continue to develop resources at a world-class standard all the while providing economic growth, jobs and government revenues.