Critics slam B.C. commission's report on oilpatch compliance

Larry Pynn
CanWest News Service; Vancouver Sun
Wednesday, November 15, 2006

VANCOUVER - B.C.'s Oil and Gas Commission is coming under sharp criticism for claiming the oilpatch in northeast B.C. has a near-perfect compliance record despite more than 2,500 known infractions last year, two-thirds of them officially rated major or serious.

''It boggles the mind that the commission could characterize this kind of blatant and consistent rule-breaking as being in any way acceptable,'' Wayne Sawchuk, an award-winning conservationist and former member of commission's advisory board, said from his home near Dawson Creek, B.C.

''It looks like there's a free-for-all going on up in the oilpatch. This is plainly unacceptable. It calls into question the abilities of the commission to effectively police the companies.''

Fearing that ''no one is minding the store,'' Sawchuk called for an independent body to regulate the industry rather a commission that exists under the wing of the Ministry of Energy, Mines, and Petroleum Resources.

At issue is the way the Oil and Gas Commission, the Fort St. John, B.C.,-based provincial body overseeing oil and gas exploration, reports and calculates compliance in the oilpatch.

The 2006 inspection and compliance report shows that commission staff found 2,643 infractions 874 minor, 1,645 major and 124 serious while inspecting 116,248 items at 2,547 oil and gas sites.

The commission divides 2,643 by 116,248 to produce a compliance rate of 97.7 per cent, a figure that makes both the commission and industry look very good.

Sawchuk counters that one could just as easily use the same figures to conclude a failure rate of 100 per cent, since an average of more than one infraction was found at each individual site.

''What troubles me is the conclusion of 97 per cent compliance,'' said B.C. NDP energy critic John Horgan. ''It's fun with numbers. It's misleading at a minimum and does nothing to instill confidence in our communities in and around the northeast that regulations are being met.''

Kin Lo, an associate professor in the Sauder School of Business at the University of B.C., criticized the commission, in making its calculations, for not distinguishing between the seriousness of the items inspected.

''In legal circles, one would never add together the number of homicides with misdemeanors,'' said Lo, adding it's ''a little troubling'' the commission added all three categories of non-compliance together to arrive at a non-compliance rate of 2.3 per cent.

Commission communications director Steven Simons said the inspection and compliance report for the 2005/06 fiscal year represents a new way of reporting on industry compliance. He noted the commission last year issued 22 ''operating penalties'' and seven temporary closures of oil and gas sites.

Dave Pryce, vice-president of western operations for the Canadian Association of Petroleum Producers in Calgary, noted that the cost of shutting down a productive operating well is generally much higher than any financial penalty the commission might assess.

''What are the consequences?'' he said. ''Companies don't want to be out of compliance. They'll react accordingly.''

Simons said, however, a deficiency on one item of an inspection should not imply non-compliance overall, especially in cases where the inspector looked at a large number of items and found the vast majority to be compliant.

Vancouver Sun

© CanWest News Service 2006