Water prices a fracking big deal
by Dan Fumano
“For companies using B.C.’s water for fracking, the highest water rental fee paid to the province is $1.10 per 1,000 cubic metres. That’s less than $3 for enough to fill an Olympic swimming pool.”
Critics are raising alarms that oil and gas companies are getting a “free ride” from the provincial government for the billions of litres of water used in fracking operations every year.Last week, the B.C. government released a proposal for the new Water Sustainability Act, which would update and replace B.C.’s century-old Water Act. Experts have said the proposal is a welcome, if long overdue, sign the government is taking water resources more seriously — but they say the gifting of free or very cheap fresh water to industrial users is an issue that requires attention.
Hydraulic fracturing, or “fracking,” is a process of injecting a mixture of water, sand and chemicals underground at very high pressure, in order to fracture rock formations and release natural gas. Fracking is one of the main methods for extracting liquefied natural gas, or LNG, which has been promoted by Premier Christy Clark as the biggest economic opportunity B.C. has had in a century.
In Clark’s Speech from the Throne this year, she said the LNG industry could produce royalty revenues of more than $100 billion for the province, and tens of thousands of jobs. But the practice has also been the subject of controversy for its ecological impacts.
For companies using B.C.’s water for fracking, the highest water rental fee paid to the province is $1.10 per 1,000 cubic metres. That’s less than $3 for enough to fill an Olympic swimming pool.
A ‘FREE RIDE’
“They’re getting a free ride, absolutely,” said Ben Parfitt, a resource analyst for the Canadian Centre for Policy Alternatives. “I think that charge is egregiously low, and I think that there is a real opportunity for the government, having taken a significant step in the right direction in introducing this proposed legislation, for it to … deal with the whole issue of water pricing.”
If B.C. continues to expand LNG production as expected, Parfitt said, it would bring “an unprecedented rush on water,” and make the issue of water price and use all the more vital.
“We need to send the signal now, before that activity ramps up, that … companies are going to have to pay a reasonable dollar for that water. If we don’t do that, then basically we’re sending the signal that this is a resource that we in British Columbia just take for granted,” he said.
Parfitt said he was encouraged to see the public concern over the lack of groundwater regulation in the wake of The Province’s reports on Nestlé and bottled water companies taking BC’s fresh water without paying anything to the government.
“I think the Nestlé issue really highlights that. People feel very strongly that multinational companies should not be getting our water for free,” he said.
FRACKING DEMAND MORE THAN BOTTLED WATER
But, he said, the volume of fresh water used by oil and gas companies in fracking operations around the province dwarfs the amount used by bottled water companies.
According to a B.C. Oil and Gas Commission annual report, “In 2012, a total of 7,054,704 m3 of water was used for hydraulic fracturing.” That’s about 2,800 Olympic swimming pools.
Nestlé’s total water withdrawals last year in B.C. — 265 million litres — would make up a little less than four per cent of the total water used for fracking in B.C.
FRACKING WATER PRICE ‘AN INSULT’
The current going price for water used for fracking is “an insult,” said Eoin Madden, a campaigner from the Vancouver-based national conservation group Wilderness Committee.
“Our message to the provincial government is, if you’re going to price water, be serious about it. You don’t joke around with our most important resource, the one thing you can’t live without.”
The current fee structure is more about “optics” than about assigning a value to the resource, Madden said. “It’s a nominal fee that makes people believe it’s being taxed, it’s being regulated. And it’s not. That amount of money, it’s pointless.”
A spokesman from the Ministry of Environment said Friday that the government is “contemplating changes to both the pricing structure and rates for water.”
The Water Sustainability Act proposal is up for public engagement and discussion until Nov. 15.
Source: The Province.