The Changing Regulatory Scheme in Northeast British Columbia

Abstract

The Northeast British Columbia (NEBC) oil patch is undergoing a boom in land tenure sales, exploration, and production. This comes at a time of increasing public concern over the use of hydraulic fracturing (or “fracking”), an unconventional technology that ushered in a new era of production in NEBC, along with several new contentious issues. Recently, four significant regulatory changes have been enacted or planned for the immediate future. The first, likely in response to public concern over fracking, occurred in October 2010 with an overhaul of the decades-old Petroleum and Natural Gas Act and the coming into force of the bulk of the provisions in the Oil and Gas Activities Act. The changes primarily affect production and environmental management, and several new provisions have a direct impact on fracking. The second change under development is the creation of a long-awaited groundwater licencing regime, marking a stronger environmental presence in the NEBC, and possibly abrogating pre-existing extraction rights. The third change arises from the expiry of Crown-First Nation Consultation Process Agreements (CPAs). Recent jurisprudence continues to point to the need for improved consultation and accommodation, but current negotiations may or may not succeed in arriving at a more comprehensive successor to the expired CPAs. Finally, under British Columbia’s contaminated sites regime, new measures expand the liability exposure of oil patch operators for contaminated sites in both civil actions and government enforcement proceedings.