Environmental board revokes Nexen water licence for fracking

The Fort Nelson First Nation has won a three-year long legal challenge to stop a natural gas company withdrawing water from a small lake for its fracking operations, but the battle may not be over.

On Sept. 3, the Environmental Appeal Board, an independent government agency, decided to revoke a water license issued to Nexen Energy by the Ministry of Forests, Lands and Natural Resource Operations. The board found the provincial government "failed to consult in good faith" regarding the license.

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"This decision sends a clear message to the B.C. government and to the fracking industry that the LNG dream will not happen at the expense of our lakes, rivers, and treaty rights," said Fort Nelson First Nation Chief Liz Logan in a statement

“Granting this license was a major mistake by the province… By approving this license, the province demonstrated it is not protecting the public interest in water."

Under the ruling, Nexen, a subsidiary of Chinese government-owned CNOOC Limited, can no longer withdraw water from North Tsea Lake for use in its fracking operations. Under the license, issued in 2012, Nexen could have withdrawn water from the lake until 2017.

The battle may not be over, however, as Nexen and the province are both considering their next moves.

“The province is carefully reviewing the Environmental Appeal Board’s decision and determining next steps, which could include an application for judicial review through the B.C. Supreme Court,” said a spokesperson with the Ministry of Forests, Lands and Natural Resource Operations in an email.

The issue dates back to 2009, when Nexen first applied for a long-term water licence. The company began withdrawing water under temporary licenses while it awaited its long-term licences.

The consultation process and other appeals process took many years, during which Nexen withdrew water on short-term water licences.

The panel found that at one point— while the ministry was arranging meetings to discuss First Nations concerns -- emails between government managers showed they intended to issue the licences regardless of any other future meetings with the First Nation.

"The Ministry appeared to take the view that further consultation with the First Nation would simply delay the inevitable issuance of the licence," the panel found.

"It is apparent from the correspondence that the provincial Crown was saying one thing to the First Nation, but saying another thing internally.”

Fort Nelson First Nation filed an appeal over the licence in August 2012.

The court battle included more than 19 days of spoken testimony and more than 2,000 pages of written evidence.

First Nations witnesses used their decades of personal and family knowledge to testify to the importance of Tsea Lake.

“Several members of the First Nation testified that they had seen Trumpeter Swans, ducks, moose, black bear, and beaver at or near North Tsea Lake,” the panel wrote. “They hunt moose and gather eggs from ducks in the area as well. Further, certain wetland vegetation is gathered for food, traditional medicine, and other uses such as canoe construction.”

The panel also found that in making its licence application, Nexen used incorrect assumptions, and did not sufficiently justify its withdrawal methods.

The panel also noted that Nexen indicated a willingness to consider different water sources outside of North Tsea Lake.

In a follow up interview, Logan said there were a number of messages sent out by the decision, including that there must be meaningful consultation with her First Nation and others when lake and river areas might be impacted by water extraction, and that water models must be based on valid scientific models and adequate data.

"We are ready to engage with any companies who are extracting water in our territory, whether through long-term water licenses or shorter term approvals," Logan wrote in an email.

"Water is a vital resource for us, and we will make, and have made, the same points with other companies as we have with BC and Nexen."

She added that Fort Nelson First Nation has given the green light to more than 115 oil and gas authorizations in the band's traditional territory.

"The Tsea withdrawal is an example of the risk that this type of large scale extraction can pose," Logan said. "Under the Licence, Nexen kept pumping huge amounts of water... Water is the source of all life. Where lakes, rivers and streams are affected, everything that depends on water is affected."

Nexen spokeswoman Diane Kossman said the company is reviewing the board's decision and has not decided on its next steps.

"We had significantly slowed the pace of exploration and development in the region due to depressed commodity prices, therefore this decision does not have any immediate impacts to our operations," Kossman said in an email. "Nexen will be examining our options with respect to securing water rights in the area."

Kossman said Nexen has implemented "new processes and technologies" to reduce its water use in the region.

"Nexen has also implemented an extensive water monitoring and management program in NEBC to ensure protection of water resources," Kossman said.

Nexen is not the only company that has been issued a long-term water license.

As of 2015, there were 18 active oil and gas-related water licences, according to a B.C. Oil and Gas Commission report.

From January to June 2015, these long-term licences had meant the withdrawal of little more than 945,000 cubic metres of water, enough to fill about 378 Olympic-sized swimming pools.

In 2014, about 2.8 million cubic metres of water was withdrawn under these long-term water licences, the same report stated.


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