• Court Gives Deference to OGC’s Water Act Approval Policy
  • November 11, 2014 | Authors: Paul R. Cassidy; Selina Lee-Andersen; Monika A. Sawicka
  • Law Firm: McCarthy Tétrault LLP - Vancouver Office
  • On October 10, 2014, the British Columbia Supreme Court (“Court”) issued reasons in Western Canada Wilderness Committee v. British Columbia (Oil and Gas Commission), 2014 BCSC 1919. In this case, the petitioners, Western Canada Wilderness and Sierra Club of British Columbia Foundation (together, the “Petitioners”), brought a judicial review application against the British Columbia Oil and Gas Commission (“OGC”).

    At issue was the proper interpretation of the Water Act as it relates to the granting by the OGC to the oil and gas industry of short-term water use approvals under s. 8 (“Approvals”). The issue focused on whether recurrent Approvals may be granted, and whether such Approvals may extend beyond the 24-month maximum term specified in the Water Act. According to the Petitioners, the OGC consistently acted in contravention of the Water Act by granting repeated Approvals which, in effect, authorized companies to use and divert water for more than one term and for more than 24 months. The Petitioners’ main concerns were the negative effects of water use for hydraulic fracturing (or “fracking”) purposes.

    As the majority of the subject Approvals were issued to Encana Corporation (“Encana”), Encana was also a respondent in the proceedings. The Court ultimately dismissed the petition.

    1. Issue of Standing

    As a preliminary matter, the Court addressed the issue of the Petitioners’ standing. The Court decided the Petitioners had standing to bring the matter to the Court, as the Petitioners were not appellants who could bring an appeal to the British Columbia Environmental Appeal Board under the Water Act. Further, the Petitioners received public interest standing, as: (a) the matter involved an important issue of statutory interpretation affecting an important resource owned by British Columbians; and (b) the Court’s proceeding was the only reasonable and effective way for the Petitioners to adjudicate the issue.

    2. Standard of Review

    In deciding the standard of review was reasonableness and deference should be afforded to decisions of the OGC, the Court reasoned, among other things, that the Water Act is a statute the OGC has particular familiarity with, and the OGC has considerable expertise in performing its mandates under that legislative framework.

    3. Interpretation of Section 8

    The Court held the proper interpretation of s. 8 of the Water Act is such that Approvals may be granted on a recurrent basis, as is currently done by the OGC. In reaching this conclusion, the Court emphasized that: (a) there is no prohibition against consecutive Approvals in the Water Act; and (b) recurrent Approvals are granted pursuant to fresh applications which are reviewed by the OGC on a de novo basis, thus providing necessary “checks and balances”. The Court ultimately held the OGC’s policies associated with Approvals are reasonable and entitled to considerable deference.

    As an aside, the Court noted the Water Act is soon to be replaced by the Water Sustainability Act, which will specifically provide that Approvals may be recurrent.

    4. Notes on the Oil and Gas Industry

    In its reasons, the Court also highlighted several interesting facts from the evidence in regard to Approvals and the oil and gas industry, including:

    • In 2009, oil and gas companies were authorized to use a maximum of 0.0058% of all surface water allocated for use through licences and Approvals in British Columbia. The hydro power industry was allocated 98% of surface water during the same period.

    • For the 12-month period ending December 2012, the OGC granted Approvals for a total of 20.4 million m3 of water, of which 7 million m3 was used for fracking.

    • 54% of water used for fracking in 2012 arose from Approvals - a number which was substantially lower than that in 2009.

    • The OGC developed specific policies regarding the granting of Approvals for fracking purposes. Generally, Approvals for fracking are not issued for terms longer than 12 months.