Environmental, Indigenous and Natural Resources Blog

The public comment period on the Province’s proposed new Water Sustainability Act has now closed.  With well over 400 submissions, interest in the new (potential) water regime remains very high.  Issues of particular note that have been raised include:

• the applicability of the new Act to oil and gas operations, including a possible exemption for deep saline groundwater;

• pricing of water use, particularly by commercial and industrial users; and

• trade law implications and associated sovereignty issues potentially arising from long-term water use licenses.

All submissions on the proposed new Act can be found here.

The legislature is expected to sit again in February, 2014.  Will the 100-year wait to modernize the Water Act finally come to an end?

A significant factor may be whether a change in the regulation of water use in BC is likely to impede or advance the Province’s efforts to develop an LNG-export sector in BC.

The Province’s determination to  create an LNG export sector cannot be overstated.  Premier Christy Clark is currently on a two-week trade mission to Asia, her fourth in two years, leading a 120 person delegation with a focus on LNG investors and market participants.  A key issue for all resource and infrastructure investors is regulatory certainty:  the more certainty, the more likely it is that development proceeds.  Will a new water use regime, one that for the first time regulates groundwater resources and puts environmental concerns four-square into the decision-making process, increase or decrease regulatory certainty for LNG development?  The answer probably depends on whether one believes a change in the regulatory framework is inevitable.  If it is, then a change that happens sooner than later increases regulatory certainty;  if change is not inevitable, then why not push it out another 5 years?  Or 10?  After 100 years of the Water Act, one could be forgiven for believing that a change to the water use regime in BC still may not happen anytime soon.

On the other hand, the existing water use framework is under continuing strain, and creates its own uncertainty.  The recent court challenge by environmental groups who seek to quash water use approvals issued to EnCana, and orders declaring the Oil and Gas Commission’s alleged practice of issuing multiple short-term approvals unlawful, is telling.   The Commission has the authority under section 8 of the Water Act to approve the use or diversion of surface water for periods of up to 24 months without a licence.  In a petition filed in BC Supreme Court on November 13, it is alleged that the Commission issues repeated section 8 approvals to the same company, for the same location and for the same purposes, inconsistent with the substantive requirements of section 8.   Regardless of the merits of the petition, the time to resolve the petition and the need for legal certainty on this key issue means a legislative solution might be seen as desirable, and would make it more likely that the Province will introduce the new statute in the next sitting of the legislature.