Flawed science, lack of consultation cited as ruling ends fracking water licence

VICTORIA – A First Nation with a treaty in the heart of British Columbia’s oil and gas territory says the provincial government can’t allow energy companies to dry up streams and lakes to support fracking operations.

Fort Nelson First Nation Chief Liz Logan said B.C.’s Environmental Appeal Board sided with her members and overturned a water licence granted to Nexen Inc. (TSX:NXY), no longer allowing the Calgary-based company to pump water from Tsea Lake.

“We want sustainable, maintainable development that’s going to be there for a long time, and they have to do it right,” Logan said. “They’ve got to use good science. They’ve got to use good data. They’ve got to talk to us. They just can’t arbitrarily say, ‘I’m flashing this licence, I can do whatever I want.’”

The First Nation appealed the decision almost two years ago after Nexen was permitted to use billions of litres of water for shale gas fracking in northeast B.C.

The three-member board ruled the licence was based on “serious technical flaws,” and “serious flaws in the consultation process.”

Nexen can use water it has stored in area pits, but can no longer take water from the lake.

“The ministry appeared to take the view that further consultation with the First Nation would simply delay the inevitable issuance of the licence,” said the decision issued last week.

The Forests, Lands and Natural Resource Operations Ministry said it was reviewing the decision and considering a B.C. Supreme Court judicial review.

“Government takes its duty to consult seriously and remains committed to working closely with local First Nations throughout the province on resource development,” it said in a statement.

Related: Alberta regulator says Nexen can reopen utility pipelines at oilsands operation

Nexen also said it is reviewing the decision to determine its next steps.

“Responsible water management is a priority across all of our operations,” the company said in a statement. “Specifically, in northeast B.C., we’ve emphasized the development and implementation of new processes and technologies to reduce our water use and our impact, and protect water sources.”

Nexen, a wholly-owned subsidiary of China’s CNOOC Ltd., was recently permitted to reopen some of its Alberta pipelines after a leak at its Long Lake operations of about five million litres of a mixture of bitumen, produced water and sand.

Logan said the appeal board ruling reinforces aboriginal rights that governments and resource developers have a duty to consult with First Nations about projects that could impact their territory.

The appeal report said there was evidence that water withdrawals in 2012 contributed to observed changes in shoreline vegetation and fish habitat.

“Our people work in the oil patch, but they are our eyes out there,” Logan said.

Northern B.C. First Nations leaders, including Logan, sent a letter to Premier Christy Clark on Tuesday saying the government has ignored significant legal victories and blocks them from managing their own territories.

They cited decisions such as one granted to the Tsilhqot’in Nation in June 2014, when the Supreme Court of Canada ruled for the first time that First Nations have title to land they call their territory.