BC’s Oil and Gas Commission: a captured regulator

—Industry demands trump public interest—
August 14, 2019

British Columbia’s Oil and Gas Commission bears many of the hallmarks of a captured regulator. 

Too often, the interests of the industry it regulates take precedence over the interests of the public it is also meant to serve. 

Consider these three glaring examples: 

In spring 2017, reports surfaced that companies drilling and fracking for natural gas in northeast BC had built dozens of dams without once bothering to submit their dam-building plans to anyone. 

It was later discovered that one of those “illegal works” (as deemed by BC’s Environmental Assessment Office) was as tall as a seven-storey building. Many others were so poorly built they were at risk of collapse—posing grave public safety and environmental dangers. 

The Commission (OGC) never once fined any of the companies that built the dams. 

Later in 2017, news emerged that numerous natural gas wells that companies had drilled and fracked were leaking and contaminating groundwater supplies. The OGC knew this in 2013, but sat on the information and only acknowledged its existence four years later after a suppressed copy of the “internal” report was leaked to an investigative journalist. 

Then, in spring 2018, word surfaced that the OGC had deliberately held onto another damaging report, again for four years. That report showed that oil and gas companies systematically violated rules to protect some of BC’s most critically threatened caribou populations. 

All these violations and more happened under the previous government’s watch, which should mean the door is wide open for the current government to reform the agency as Premier John Horgan indicated he was prepared to do more than a year-and-a-half ago. 

“At the end of the day, our systems fail if the public has no confidence in them,” Horgan told veteran political affairs columnist Vaughn Palmer. “We’re going to do what we can to make sure that the existing Oil and Gas Commission regulatory regime is either being enforced, and if it’s not, we’ll bring in others to do so.” 

But with less than half its mandate remaining, the government is running out of time. It needs to act quickly to reform the OGC or it won’t happen at all. One of the most effective things it could do is create an arm’s-length agency to oversee compliance and enforcement efforts in the fossil fuel sector.

Currently, the OGC both issues approvals for oil and gas industry activities like fracking and is responsible for ensuring that companies abide by the rules. 

Clearly, the latter is not working as the shockingly long list of violations attests. 

There is precedent for recommending such a separation of powers. In the horrific aftermath of the Mount Polley mine tailings dam failure, BC Auditor General Carol Bellringer said there was an inherent tension within the Ministry of Energy and Mines between promoting mining activities and policing them.

“MEM’s role to promote mining developments is diametrically opposed to compliance and enforcement. This framework of having both activities within MEM, creates an irreconcilable conflict,” Bellringer concluded. 

Another simple requirement that the government can insist on is for the agency be more transparent. There is no excuse for holding onto documents that are clearly in the public interest and that should be available to compliance and enforcement personnel for their investigations of companies that violate provincial laws. 

With prospects for a major liquefied natural gas plant or plants in our province looking more likely, it is imperative that the government not allow a captured regulator to continue to be at the helm. Maintaining the status quo only deepens public distrust. 

Ben Parfitt is a resource policy analyst with the BC office of the Canadian Centre for Policy Alternatives and author of the just-released report Captured: British Columbia’s Oil and Gas Commission and the case for reform.