CPABC Industry Update Summer 2014 - Page 28

Separating Rhetoric from Reality – Part II (cont’d) integrity of the casing barrier. BC was the first jurisdiction to implement fracking fluid disclosure. In terms of quantity, less than 1% of the annual water supply available in the region is used for fracking. Of this, a growing percentage is recycled, with nonpotable sources largely being re-injected in deep reservoirs as per the regulatory standards that have ensured no aquifer contamination. However, as LNG development stimulates an increase in upstream activity, water management and planning will become more important considerations. Appropriately, BC’s new Water Sustainability Act provides for better groundwater regulation. This will be a key step in making what is already a high-quality regulatory framework even more effective – allowing for continuous improvements as the sector grows. Methane Leakage There is a growing discussion regarding the extent to which methane leakage from shale gas drilling negates the significant CO2 benefits of burning natural gas versus both oil and coal. What is not debatable is that methane leakage does occur, and that above a certain percentage of leakage (roughly 4-6%), the benefits of natural gas can largely disappear in comparison to the use of other fossil fuels from a GHG emissions perspective. Leakage rates reported in the United States are significantly below the inflection point. With a leading-edge regulatory regime in place, there is no reason to believe BC’s shale gas drilling programs would have significantly higher leakages. There are a (small) number of ‘super leaker’ wells that can skew the data. These sites are anomalies. A focus on the right technology and regulatory activities on these sites is important; but such sites are not commonly found in BC. Nevertheless, since methane is more potent than CO2 as a GHG, methane leakage is an issue worthy of attention. page 28 | I N D U S T R Y U P D AT E Fortunately, there is a convergence of incentives to continue improving outcomes since methane leakage directly reduces the volume of natural gas available to sell. This provides an economic signal to both companies and government to act to limit leaks. On a net life-cycle basis, LNG does produce significant climate change benefits. Seismic Activities — Earthquakes Scientific analysis in the US and Canada has shown that fracking processes can stimulate minor seismic activities. On rare occasions, based largely on poor site selection for waste-water storage, a few jurisdictions have recorded small-scale seismic events. The BC Oil and Gas Commission’s review of seismic activity related to shale gas development found that some minor seismic activity was induced by fracturing. The report found no human injury or property/infrastructure damage from these events. Research indicates that fracking-induced seismic activity is rare and minor in nature, and the potential for more significant induced seismic events can be eliminated through effective planning. While there may be a general impression that those involved in the fracking process are indiscriminately injecting materials into the earth to crack the shale and release the gas, this is incorrect. In fact, the extraction process requires precision, and work in this area has led to more innovation and a new field of study in the sector called micro seismicity. Cumulative Impacts Another LNG-related area of environmental concern is cumulative impacts. If LNG development moves ahead, there would be a substantial increase in industrial activity in northeastern BC and at proposed LNG facility locations on the coast.