The British Columbia Oil and Gas Commission (OGC) hired Ernst & Young (E&Y) to assess B.C.’s regulatory framework governing hydraulic fracturing. The OGC asked E&Y to:
- assess the OGC’s current framework, including legislation, regulation, guidance, leading practices, policies, permit conditions and industry standards;
- develop a detailed map of the relationship between existing regulatory instruments and the key issues presented by hydraulic fracturing;
- conduct a high-level scan of six selected jurisdictions with an industry and geology similar to B.C.;
- identify opportunities to improve BC’s regulatory framework; and
- based on a set of co-developed guiding principles, develop leading-practice recommendations.
E&Y concluded that overall hydraulic fracturing is well regulated in B.C. and that the overall regulatory framework in B.C. is robust. More than 75% of B.C.’s natural gas production is from hydraulically fractured wells.
The scope of E&Y’s assessment focused on three groups of issues identified as the top concerns relating to hydraulic fracturing according to interviews and independent research by the Canadian Council of Academies in 2014:
- Water lifecycle issues: issues related to the sourcing, use, storage and safe disposal of the water used for hydraulic fracturing.
- Induced seismicity issues: issues related to seismicity caused by hydraulic fracturing or the disposal of flowback water in deep disposal wells.
- Quality of life issues: issues related to disturbances to local quality of life caused by hydraulic fracturing activity.
E&Y’s assessment was intended to be a review of B.C.’s regulatory regime, rather than a science-based, technical or comprehensive review of all oil and gas regulations.
Although E&Y’s assessment of B.C.’s current regulatory framework identified a number of instances where it concluded that B.C. is demonstrating leadership or regulating particularly effectively, E&Y also identified some opportunities for improvement, including opportunities with respect to data collection, monitoring and the enhancement to more comprehensively regulate specific issues.
A copy of E&Y’s report can be found here.