Petronas subsidiary failed to get regulatory approval before building at least 16 large dams in BC to trap freshwater for fracking operations, CCPA investigation reveals

May 3, 2017

VANCOUVER – A subsidiary of Malaysian state-owned Petronas, the company behind a massive Liquefied Natural Gas plant proposal near Prince Rupert, has built at least 16 large unauthorized dams in northeast BC to trap water used for fracking operations, the Canadian Centre for Policy Alternatives has learned. 

Two of the dams built by Petronas subsidiary Progress Energy are higher than five-story apartment buildings, which means they qualified as “reviewable” projects by the provincial Environmental Assessment Office (EAO) and should have been assessed by that office prior to any construction taking place. 

But the EAO was never contacted before the dams were built and is only now investigating, five years after construction began. In 13 additional cases, Progress/Petronas has applied retroactively for water licenses and dam approvals for structures already built, which must now be vetted by BC’s Oil and Gas Commission (OGC). In yet another case, a dam built by Progress was ordered dewatered last year after the OGC concluded the structure, upstream from a gas processing facility, could fail. 

The dams are part of a wider network of structures built by fossil fuel companies that may number in the “dozens,” according to information a senior provincial dam safety official provided to the CCPA. The province’s former comptroller of water rights told the CCPA the number of large unpermitted dams is likely more than 100. 

These revelations prompted CCPA resource policy analyst Ben Parfitt to undertake a special investigation, including visiting one of the dams. His expose reveals a troubling breakdown of the regulatory system meant to oversee water usage and the energy sector in BC. 

“The sheer number of these structures is troubling,” says Parfitt. “The companies did not submit engineering designs to provincial dam safety officials before building them. One dam has already shown signs of failing and was shut down. How many more unsafe structures are out there? And how much environmental harm are all these structures causing?” 

Parfitt says the risk of dam failures may be increased considerably because the dams are purposely located near where companies drill and frack for natural gas. In 2015, Progress Energy triggered a 4.6 magnitude earthquake felt 180 kilometres away when it pressure-pumped 160,000 cubic metres of water below ground in a fracking operation. 

The CCPA has learned that dam safety officials with the provincial Ministry of Forests, Lands and Natural Resource Operations (FLNRO) have known of problems for months, as have investigators with the EAO’s office and the OGC, but these officials do not appear to have issued any public news releases or advisories on the extent of the situation. The CCPA began investigating the problem in March after receiving a tip. 

First Nations in the region most impacted by the dams do not appear to have been properly consulted. 

“There appears to be a major breakdown by government in protecting public health and safety and the environment,” says Parfitt. 

The CCPA is calling on the Province to address a number of questions including:

  • How widespread is the construction of dams by energy companies?
  • Which companies have built unauthorized dams?
  • Where are these dams, and how large are they?
  • Which dams are now under retroactive review by the Environmental Assessment Office and/or the Oil and Gas Commission?
  • How many of these dams have been ordered decommissioned due to safety concerns?
  • Why have these reviews and investigations not been made more public?
  • Have any fines or penalties been levied to date? If not, why not?
  • Which government ministries and agencies became aware of these structures, and when?
  • How is it possible that so many unauthorized dams could be constructed without earlier intervention by the relevant authorities?

This investigation was undertaken as part of the Corporate Mapping Project (CMP). The CMP is a six-year research and public engagement initiative jointly led by the University of Victoria, the Canadian Centre for Policy Alternatives’ BC and Saskatchewan Offices, and the Alberta-based Parkland Institute. This research was supported by the Social Science and Humanities Research Council of Canada (SSHRC). 

Read the report 

For more information and to arrange interviews please contact Jean Kavanagh, Director of Communication, 604-802-5729, [email protected]