Encompass Magazine Article— Volume 3 Number 3, Feb. 1999. "The Downside of Downsizing." By Chris Severson-Baker. It’s easy to dismiss the acts of vandalism in Northern Alberta as ecoterrorism. But the seriousness of the issue warrants a closer investigation. Many people are questioning whether the regulatory authority is up to the task of monitoring the oil and gas industry effectively. With increasing evidence linking oil and gas activity to human and animal health impacts, the public is calling for stronger industry regulation along with better monitoring and enforcement. Some individuals are extremely frustrated with a regulatory system that is tailored to meet industry needs but leaves landowners feeling isolated, ignored and powerless. The Alberta Energy and Utilities Board (AEUB) regulates, monitors and enforces Alberta’s powerful oil and gas industry. Initially established to promote the exploration of oil and gas reserves, the AEUB has since been charged with ensuring compliance with requirements intended to protect the environment. However, beginning in 1994, sweeping changes have taken place in response to deep budget cutback and rapid expansion of oil and gas activity. The result is an almost total absence of comprehensive monitoring and enforcement of the AEUB regulations over the last five years. Budget and Staff Cuts Ironically, budget cuts of approximately 20 percent occurred at the same time that oil and gas activity in the province boomed. Oil and gas application at the AEUB have increased form 4000 in 1993 to 12 000 in 1997, in 1997/98 the AEUB issued a record 14 474 well licences (up by 12.25 percent form 1996/97). One of the ways the AEUB reduced staff levels was by slashing field staff positions in its offices by over 60 percent and by reducing in-the-field time for remaining regional staff form 70 percent to 35 percent. A radically different monitoring and enforcement system was required to deal with these cuts. The New Regime Before 1994, the AEUB had sufficient field staff resources to provide a physical presence in the oil patch. Accidents, cleanups, sweet and sour gas plants, and new activities were likely to receive visits by AEUB personnel. Cruising inspectors ensured that any act of non-compliance carried the risk of exposure by the AEUB. In theory, the new program, designed to do more with less, looked pretty good. It called for: the oil and gas industry to know the rules and implement them; a comprehensive system to monitor the industry; the use of information to target activities and companies with added scrutiny; random and focused inspections to instill the fear of being caught; and the use of "escalating enforcement ladders" to reign in repeat offenders. Unfortunately, the severe budget and staff cuts imposed by the Alberta government did not give the AEUB sufficient time and resources to develop and implement the replacement system. After five years, key components of the new program are still not in place. In the meantime, a de facto system of voluntary compliance has emerged. An example of partial implementation is the regulation for one time on-site land treatment of oilfield waste. This is the spreading of oilfield waste on the surface of a lease so that the hydrocarbon contaminants will degrade. This questionable practice relies more on the dilution of salts, metals and other compounds and the vaporization of lighter hydrocarbon compounds than it does on the treatment of hydrocarbons. The AEUB expects companies to know and comply with this regulation without its involvement. There is no application, notification or information requirement of any kind except that the company is expected to document the activity and produce this information on request. Virtually no AEUB staff supervision or application processing time is required. But it does require a commitment by the board to audit documentation and conduct field testing of a small percentage of the industry to ensure that companies understand there is a risk of being caught of they do not follow the rules. The AEUB doesn’t even have the capacity to provide this basic level of auditing and inspecting. In addition, with exception of two instances the AEUB’s "escalating enforcement ladders," have not been implemented. Problems with Voluntary Compliance A review of enforcement initiatives in British Columbia and the Yukon conducted by Environment Canada in 1998 found that when the government relied on a system of voluntary compliance there were high levels of non-compliance. The report "Enforcement vs. Voluntary Compliance: An Examination of the Strategic Initiatives Implemented by the Pacific and Yukon Regional Office of Environment Canada" reviewed 19 different regulatory groups and found that industrial sectors that relied only on voluntary compliance had a compliance rating of 60 percent versus the 94 percent average-compliance-rating of industries subjects to all regulations combined with an inspection program. This is a serious concern because in B.C. there are only seven full-time inspectors, three investigators and five emergency response officers in the federal department of environment. Yet the number of sites to which federal regulations apply has risen over the last 10 years from 5600 to 17 000. Given the range of the oil and gas industry in Alberta — from wells sited on busy farms to remote and ecologically sensitive environs — the potential for impacts to health and the environment resulting form industry non-compliance is significant. And add to that the shift within the industry over the last decade from 70 large companies to more than 1200 small to mid-sized companies with fewer resources. Opportunities abound for irresponsible behaviour. Procedural Meltdowns The inability to keep pace with growth in oil and gas activity in the face of budget cuts and staff reductions has been demonstrated by a number of recent procedural breakdowns by one of the AEUB’s most seriously under-resources areas: oilfield waste management. Two classic examples are the questionable application process for an oilfield waste treatment facility and the past practice of burying oilfield waste in roadbeds. Edson Oil Cleaning By 1997 the AEUB had reduced the number of staff who reviewed oilfield waste treatment application to one full-time position. This was at a time when the number of applications for new facilities had quadrupled. Swamped with work and repeated complaints about delays from industry, the board began to allow projects to be publicly advertised before ensuring the applications were complete. As a result, some applications either lacked very basic project information or were inaccurate. The board also allowed companies to proceed with the construction of facilities, before issuing an approval. Edson Oil Cleaning’s application for the Brazeau oilfield waste treatment facility was one such application. The information was highly inaccurate and was missing important sections, including hydrological and hydro-geological assessment information, needed to justify the site selection. Also, the company was allowed to construct the facility before it was known if a hearing into the project would be needed. The AEUB was ultimately forced to hold a hearing to address objections to the proposed facility. The hearing revealed there were serious problems with the site selection, and the design of the facility was substandard. Despite these findings, the AEUB conceded that the company has followed its published guidelines (highlighting a certain weakness in these regulations) and approved the facility on June 15, 1998 without substantive changes or conditions. It is not known what impact the fact the facility had already been built had on this decision, but the hearing panel did recommend that the AEUB stop allowing companies to proceed with construction before receiving approval. Any question that the AEUB had failed to require adequate standard be followed by Edson Oil Cleaning to protect the environment was answered when the facility was taken over four months later by another waste treatment company. Canadian Crude Separators immediately set about making significant improvements. The waste storage pit was emptied, tested for contamination and reclaimed; all open tankage (rail transport cars cut in half) was removed; contaminated soils around these tanks were reclaimed; and the site drainage was altered so that the site surface water would actually drain to the surface water containment pond. Road Burial of Oilfield Waste In July 1997 a small group of citizens in the Elk Point area, concerned at what appeared to be burial of oilfield waste in area roads, contacted the AEUB. (Road burial uses produced sand and slop oil as road construction material to build up the grade of a road.) The group discovered that the board had been permitting road burial of oilfield waste in roads in the Bonnyville, Elk Point and Cold Lake area for two years. Further investigation by the citizens revealed that the AEUB did not have guidelines to regulate the practice of road burial and had not yet assessed the environmental implications. Responding to pressure from companies in northeastern Alberta that were stockpiling huge quantities of produced sand and other oilfield waste generated during the rapid expansion of heavy oil production in the area, the AEUB has abandoned due process and unilaterally decided to permit road burial of oilfield waste. Ultimately, the public and media pressure forced the AEUB to put a stop to the practice. A multi-stakeholder task force was organized to evaluate the practice and to develop guidelines. Emerging Evidence of Industry Impacts on Human and Animal Health New evidence of health impacts and risks has recently emerged. Prompted by a Freedom of Information Request, the Alberta Research Council finally released the results of a 1994 study on the effects of a multi-phase pipeline spill on the health of cattle from two ranches on the Red Deer River. The natural gas, sour gas and crude oil released into the ice-covered Red Deer River started on January 6, 1994. Direct emissions and emissions from the cleanup attempts that included two separate ignitions of the spill, exposed cattle on Ranches A and B to a mixture of gases including sour gas, hydrocarbon vapours and sulphur dioxide. Emissions from the first ignition forced the residents of both ranches to evacuate. One of the households evacuated as a result of emissions from the second ignition. The study concluded that:
Other recent studies pointing to the link between the oil and gas industry and health affects and health risks: Cows are the canaries of the fields (as difficult as this is to visualize). They respire 81.5 litres per minute of air. They can ingest up to 450 kilograms of oil per year while grazing. They drink 45 litres of water per day. Cattle have been known to ingest oil and oilfield waste when they come into contact with it in their environment. Apparently, they are attracted by what smells and tastes like a potential source of nutrients and salts. Unlike humans, they live outside in close proximity to oil and gas facilities 24 hours a day in all different weather conditions. Because they are almost always either pregnant or feeding a calf, they are more prone to environmental stress. Landowners and Industry in Conflict The Red Deer River pipeline spill study also provides insight into the types of disruptions and impacts some landowners who live with oil and gas activity in their backyards experience. In assessing the impacts of the pipeline spill on cattle health, it was necessary to rule out other potential causes for the health impacts that were found. This necessitated a review of the other pollution incidents that had occurred on Ranches A and B before and after the incident in question. The results demonstrate the extent to which the oil and gas industry can impact landowners. Landowners must live with the consequences of accidents and problems caused by oilfield activity on their lands. Changes in AEUB regulations and reduced monitoring/ enforcement must have forced landowners to be more vigilant in protecting themselves against potential impacts. Further, while the new scaled-down, centralized, hyper-efficient AEUB may meet the needs of industry, it does not meet the needs of a landowner having difficulties with industry operations. Individuals can quickly become frustrated and feel overpowered by the "system" when seeking information or action from government. Change is Needed Public tolerance for the oil and gas sector in many areas of the province is decreasing. Resurgent health and safety concerns mix with reports of weak AEUB regulation and reduced monitoring/enforcement — a dangerous combination. Bombings and other acts of sabotage — an estimated 160 incidents have occurred to date — in northwestern Alberta, and the murder of an oil company executive in southern Alberta in 1998, are startling indications of a growing animosity among landowners toward the oil and gas industry. Premier Ralph Klein acknowledged this problem by announcing on January 13 1999 that his government plans to increase the number of field staff who monitor emissions, inspect equipment and deal with residents. As well, a dispute resolution panel will be established to address concerns. No details or timelines have been provided by the Premier, but these would be good first steps if acted on. However, more is needed: § The AEUB must complete its enforcement plan and ensure a minimum level of auditing and inspection coverage for all regulated activities. § More research is needed on the potential human and animal health effects and ecological impacts of oil and gas pollutants. § Wilderness must be monitored by AEUB because there is no landowner surveillance. The government should establish a bonafide Environmental Advocate independent of government control and oil and gas industry funding. This tale of downsizing and deregulation is not limited to AEUB. A similar story could be told about Alberta Environmental Protection (AEP). Since 1992, there has been a 37 percent decrease in staff positions. Consequently, AEP also suffers from limited human resources and an over-reliance on voluntary compliance. In addition, the government has committed to cut environmental regulations in the province by 50 percent. Severson-Baker, Chris. "The Downside of Downsizing", |
