Thursday, 16 February 2012

CAPP bold in bringing its power to bear on NB

The reach of the Canadian Association of Petroleum Producers lobby in New Brunswick and how the province is quietly going along 




By Cheryl Norrad

Last month provincial media became aware Angie Leonard, a member of the province's steering committee on shale gas, was hired by the most powerful oil and gas lobby in Canada, The Canadian Association of Petroleum Producers (CAPP). But overlooked in the discovery of that knowledge was an agreement made between CAPP, and a locally created provincial lobby group headed by employees of CAPP and industry.

"As part of a memorandum of agreement reached in December 13th, 2011, CAPP and the New Brunswick Oil and Natural Gas Association have formed a task group comprised of representatives from both associations. The task group's objective is to engage with communities, business leaders, governments and people interested in an open, fact-based dialogue about natural gas and oil development.," wrote CAPP spokesman Markus Ermisch in a press release dated January 18, 2012 to online financial publication, Canada Newswire.

CAPP made no mention of Ermisch's announcement on it's own website, and there is no information available online for The New Brunswick Oil and Gas Association (NBOGA). Leonard, and CAPP manager for Atlantic Canada, Paul Barnes, who is co-chairman of NBOGA, are the only two publicly noted as being part of this gas association lobby group in the press release.

However, when contacted, Ermisch said the group is comprised of about 9 members, including SWN general manager Tom Alexander and Corridor's Phillip Knoll.

It seems the full court press for industry is on and bearing down on little NB. 

After formally releasing it's principles for the hydro-fracking industry a few weeks ago, CAPP's Vice-President of Operations, David Pryce, spoke on behalf of the companies he represents during a two-day media tour here, telling the province what it should do to implement CAPP's principles. 

"What we're saying is if these things make sense, we'd certainly encourage the province to look at how they might adopt them and apply them in a regulatory world...there is a gap that we're trying to fill," said Pryce in an interview with Terry Seguin of CBC's Information Morning Fredericton a few weeks ago.  

The province, on the other hand, has been reluctant to admit it's close relationship with CAPP, and didn't reveal the Leonard defection to the lobby until it's hand was forced by local media. The Alward government has often been truculent in it's dealings with media since coming to power, but has been especially so on the shale gas file, keeping reporters at bay by ignoring e-mail and telephone inquiries.

However, research on how CAPP and the province became connected is revealing.
 
A spokesman for CAPP said recently the New Brunswick government sought out the services of the powerful energy advocate after leaning of it's work in British Columbia and Nova Scotia. Members of the Alward government visited these provinces as part of a learning tour about shale gas after the administration came into power in 2010.

"A request for submissions went out by the New Brunswick government to BC and Nova Scotia for information on our work in those provinces," said Travis Davies from his CAPP office in Calgary.

In learning of the request, Barnes got in touch with the New Brunswick government to advise the province on how to proceed with its burgeoning shale gas industry, bringing with him the power of an organization that advocates for companies producing about ninety per cent of the country's natural gas and oil.

Ermisch also said CAPP has been involved over the past year with the shale gas industry in New Brunswick, but got "directly involved" when Angie Leonard came on-board.

This contradicts the impression the Alward government is projecting on this file in formulating what it calls it's own unique set of regulations for the province's shale gas industry. Four were created and announced last June in response to growing public worries over environmental effects of shale gas fracking expected to begin within the next few years. They are as follows:
  • conduct baseline testing on all potable water wells within a minimum distance of 200 metres of seismic testing and 500 metres of oil or gas drilling before operations can begin. These will be minimum requirements and may be increased depending upon the situation;
  • provide full disclosure of all proposed, and actual, contents of all fluids and chemicals used in the hydraulic fracturing (fracing) process; and
  • establish a security bond to protect property owners from industrial accidents, including the loss of/or contamination of drinking water, that places the burden of proof on industry.
  • The provincial government has also committed to develop a formula so landowners and nearby communities can share in the financial benefits of the natural gas industry.
"These are some of the toughest regulations in North America," said Natural Resources Minister Bruce Northrup.

However, those regulations have yet to be officially legislated as part of the province's Oil and Gas Act.

In fact, the government was caught with it's pants down last fall when shale gas companies Windsor Energy and SWN Resources were discovered to have broken municipal laws by not informing local communities of seismic exploration work within their boundaries. There were no existing rules to deal with the violations, showing regulations that had been established to be inadequate.

Both Premier Alward and Northrup called for regulations to be tightened, with the Natural Resources department announcing in December it was working on doing so. However, the influence of CAPP on the process has never been directly acknowledged.

"Considerable work has been done so far by several departments, and we look forward to releasing full details of the world-class regulations..." said Natural Resources Minister Bruce Northrup in a press release dated December 14, 2011.   

Pryce also claimed in his interview with Seguin that, to his knowledge, CAPP has had no input in the province's regulatory process. But the optics beg to differ. 

This publication noticed a link to CAPP last fall on the new shale gas website set up by Natural Resources. When inquiries were made twice via e-mail about whether CAPP was working with the province to formulate regulations, there was a reluctance to acknowledge the presence of the biggest oil and gas lobby group in Canada, or that there was already a link to it on the website.

"Everyone will have a chance to input on any change to regulations as is the case with any regulation changes made by government...We would fully expect that CAPP...will be sending us feedback when they are put on the site," said Marc Belliveau, a spokesman for the Natural Gas Group.

It was after these questions about CAPP the link to it on the shale gas website disappeared, never to return. Perhaps it was due to the the company's mission statement:

Maintain a positive, collaborative profile for the industry with governments and the public, thereby facilitating achievement of the goals of CAPP
  • Maintain a proactive communication plan that supports CAPP's mission and goals
  • Implement issue-specific communication plans that deliver consistent and effective messages to internal and external audiences.
Belliveau also claims only a vague awareness of NBOGA, deferring to CAPP as having a better knowledge of who is operating within this province.

"I saw reference to them in a news release by CAPP a few weeks ago. It's a fairly new reference, but it is the group of oil and gas producers and exploration companies working within the province. You may want to check with CAPP for a more detailed explanation though of the organization," he said.

Obviously a relationship exists between CAPP and the province. But it seems no one wants to come clean about how deep into the regulatory framework CAPP has penetrated. 

In September 2011, CAPP released it's Guiding Principles for Hydraulic Fracturing to industry members, outlining the obligations it formulated for member companies to follow.

The language of the CAPP document is very similar to that found in Northrup's release on December 14, 2011 about tightening up regulations, which itself was entitled Guiding Principles for Natural Gas Regulations.

The September CAPP statement: 

  • We will safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical.
  • We will measure and disclose water use with the goal of continuing to reduce our effect on the environment.
  • We will support the development of fracturing fluid additives with the least environmental risks.
  • We will support the disclosure of fracturing fluid additives.
  • We will continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmental risks of hydraulic fracturing.

The December DNR statement:
  • monitoring to protect water quality;
  • addressing the need for sustainable water use;
  • protecting public health and safety;
  • protecting communities and the environment;
  • reducing financial risk and protecting landowner rights;
  • addressing potential impacts of geophysical (seismic) activities;
  • taking steps to prevent potential contaminants from escaping the well bore;
  • verifying geological containment outside the well bore;
  • managing wastes and taking steps to prevent potential contaminants from escaping the well pad;
  • addressing air emissions;
  • maintaining an effective regulatory framework; and
  • sharing information.
The provincial announcements have comparable language and buzzwords to that of CAPP. And with Angie Leonard jumping from the Natural Gas Group steering committee to NBOGA, which also has CAPP personnel onboard, the influence is unmistakable.

Although the government said it wants regulatory input from other stakeholders, the Conservation Council of New Brunswick (CCNB), a leading provincial environmental lobby on the other side of the debate, has yet to be consulted. When Minister Northrup was asked by this publication in December for the reason, he stated the government has it's own experts for that work.

CCNB spokesperson Stephanie Merrill isn't surprised by what looks like double-teaming by industry lobby groups to hold sway over the government as it forms it's regulations.

"As the shale gas debate continues to remain heated, we would expect to see more and more lobby by professional oil and gas associations. It is tough to compete with the money and influence backing these lobby groups. We would hope however, that the provincial government would give the respect due to the people of this province, to listen to them first and foremost, as the people who have the most stake in the future of this province."

In January, CAPP announced it's operating practices for the hydraulic fracturing industry Canada-wide. The Alward government is set to unveil it's finalized regulations in March.