| Editor’s Note: APEGGA's
Environment Committee is committed to keeping members informed
on environmental issues that
may affect professional practice. Alberta's water resources,
particularly the use of fresh water, have recently been an
area of intense public interest.
The latest focal point for stakeholders interested in the
use of Alberta’s water resources was an Alberta Environmental
Appeal Board hearing. This hearing dealt with a decision
made by Alberta Environment's Central Region under the Water
Act, regarding an oil-and-gas company's application to use
fresh water for enhanced oil recovery.
Following is the executive summary from the recently released
Environmental Appeals Board report and recommendations.
ALBERTA ENVIRONMENTAL APPEALS BOARD Report and Recommendations:
Mountain View Regional Water Services Commission et al. v.
Director, Central Region, Regional Services, Alberta Environment
re: Capstone Energy (26 April 2004), Appeal Nos. 03-116 and
03-118-121-R (A.E.A.B.).
Alberta Environment issued a Preliminary Certificate and
associated Proposed License to Capstone Energy Ltd. (Capstone)
for the diversion of water from the Red Deer River for oilfield
injection at SW 4-36-1-W5M near Red Deer, Alberta. The Mountain
View Regional Water Services Commission, Mr. Gerald Oxtoby,
the City of Red Deer, Mr. Terry Little, and Mr. Kelly Smith
(the Appellants) appealed Alberta Environment’s decision.
The Appellants argue that fresh water is a scarce resource
and it should not be used for oilfield injection. The Appellants
believe that once fresh water is injected into the ground
in this way, it is gone forever. In considering these appeals,
the Board highlights the importance of fresh water; it is
essential for human existence and it is a limited resource.
The Board is also aware of the importance of the oil and
gas industry in Alberta and the work they are undertaking
to reduce their use of fresh water in keeping with the principles
of sustainable development. The Board must balance the protection
of our fresh water supplies with sustaining this essential
element of our economy.
With respect to these appeals, the Board accepts the Appellants’ argument
that when fresh water is injected into the ground in this
way it is, for all practical purposes, lost from the hydrologic
cycle. Section 2 of the Water Act, in our judgment, requires
that any use of water resulting in the loss of fresh water
should undergo much greater scrutiny. Further, where fresh
water is being used in this way, there should be no distinction
between surface water and ground water, because the overall
effects on the environment are the same.
Based on all of the evidence received in these appeals, the
Board has concluded that the Preliminary Certificate and
Proposed License should be upheld, but subject to a number
of changes, including a reduction in the quantity of water
and a staggered, shorter term for the license. The Board
encourages the Government to provide direction through an
oilfield injection policy that focuses on minimizing the
use of fresh water regardless of its source. In the Board’s
view, if fresh water is going to be used for oilfield injection,
the Water Act requires that an alternatives analysis be conducted,
looking at the technical, economic, and regulatory feasibility
of the alternatives and demonstrating that the fresh water
will be used not only efficiently, but as the last option
considered.
In the Board’s view, the amount of water allocated
should be reduced to 600 m3/day, for a total allocation of
219,000 m3 annually.* The reduction is consistent with evidence
provided by Capstone that 150 m3/day of produced water is
possibly available elsewhere and that the amount of water
to be used during the first year of the project is less than
peek requirements. To encourage the use of alternate water
sources, before the Proposed Licence is issued, Capstone
should provide Alberta Environment with a report detailing
a more complete investigation of alternate water sources.
Subject to certain conditions detailed in this Report and
Recommendations, the amount of water finally allocated in
the Proposed Licence may be further decreased if alternate
water sources are available.
In all of the circumstance, even though past policies are
contradictory and data is lacking, the Board believes Alberta
Environment did its best to consider the effects of the Proposed
License on other users, including recreational users, and
on fish and wildlife. However, as water shortages have occurred
in the last number of years, and to protect our aquatic ecosystem,
an additional safety margin of 10 percent should be added
to the minimum residual flow level. Further, to provide additional
protection to other water users, a number of the clauses
in the Proposed License should be varied to provide greater
certainty, particularly in dealing with complaints.
The Board recommends that the Minister order that the term
of the Proposed License be staggered or phased with shorter
terms. In this case, the initial term should be for a one
year, and the second term should also be for one year, unless
an applicable plan, guideline, or change in regulations provides
otherwise. If no applicable plan, guideline or change in
regulations is in place after the second one year term, any
subsequent renewals of the Proposed License should not exceed
a term of three years. Every renewal of the Proposed License
should require that an alternatives assessment be conducted
based on a list of criteria that should be part of the application
process.
* The Preliminary Certificate and Proposed License issued
to Capstone allows for a diversion of 328,500 m3
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