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Preamble:
WHEREAS the Alberta Energy Regulator (AER) and Alberta Environment and Protected Areas (EPA) have duplicate responsibility to regulate fresh water use and approval of diversion licenses; and
WHEREAS EPA’s primary responsibility is to protect and enhance Alberta’s environment and ecosystems to ensure a sustainable future, making life better for Albertans; and
WHEREAS the AER is currently issuing fresh water Temporary Diversion Licenses (TDLs) for use by industry without verifying approvals have met the processes and policies developed by the EPA; and
WHEREAS residential and agricultural use of water should be prioritized above industry needs for hydraulic fracking; and
WHEREAS TDLs are not appealable and neither the AER nor EPA will accept statements of concern from the public prior to industry utilizing the TDLs;
Operative Clause:
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate to the Government of Alberta (GOA) to develop alternatives to the use of fresh water for hydraulic fracking;
FURTHER BE IT RESOLVED that the GOA require the oil and gas industry to reduce water use proportional to all other users if drought restrictions are implemented;
FURTHER BE IT RESOLVED that that the GOA amend the Responsible Energy Development Act to remove from the mandate of the Alberta Energy Regulator (AER) “to consider and decide applications and other matters under the Water Act in respect of energy resource activities” to ensure that all authority for granting water licenses falls to Alberta Environment and Protected Areas and that the AER continue to be responsible for industry compliance;
FURTHER BE IT RESOLVED that that the GOA, without exception, require all Temporary Diversion License (TDL) applications, including those diversions from alluvial aquifers, follow the process outlined in legislation, policy and directives and that the information on which the approving authority has used to issue the TDL be made available to the public.
Member Background:
On July 10, 2024, the office of the Alberta Auditor General shared the findings of their inquiry into the management practices of surface water in Alberta. The Surface Water Management Report of the Auditor General (July 2024) identifies four key findings that further support the resolution:
We appreciate that the oil and gas industry is a major economic engine for Alberta, and do not intend for the suspension of hydraulic fracking practices utilizing freshwater. Rather, this resolution aims to achieve the following:
It is important to increase transparency in the decision-making process regarding TDLs, ensuring applications and subsequent decisions are public information so that the public has confidence that all the criteria have been met and are complete.
In discussion with the Alberta drought response team the current process that should be followed is: the Alberta Energy Regulator (AER) regulates non-saline (i.e., fresh) water use for the oil and gas sector. The use of non-saline water must be licensed under the Government of Alberta’s Water Act. An application for a Water Act license is guided by the Water Conservation Policy for Upstream Oil and Gas Operations, and must identify the proposed location of water diversion, along with the maximum volume, rate and purpose, among other requirements. To discourage the use of fresh water, this policy requires applicants to demonstrate that they have considered and documented alternatives to fresh water as part of the application process. Another important aspect of the application process is to determine the risk level of water extraction from each water source.
However, in practice we observe the AER does not require demonstration of an applicant having considered non-saline water supplies, such as wastewater effluent or produced water, and that licenses are issued based on what the applicant asks for in terms of volume and rate. In cases where there is access to aquifer sources (through gravel extraction operations), the AER considers these volumes low risk and does not require policy to be followed. We believe the public would be much more understanding of freshwater use in oil and gas operations if the approving authority could demonstrate that they have made the applicants undertake all considerations as per policy, prior to accessing any fresh water sources.
According to the Surface Water Allocation Directives, there are clear guidelines for determining if license applications may be considered low risk. If the screening criteria are met, the Director may issue a license with standard protective clauses and conditions after having considered any matters of cumulative allocation and other timing or species-based criteria or limits as required by this directive. It has been brought to our attention that this directive is not being followed and screening criteria are not required when the AER deems the water body a low risk (examples are, but not limited to, alluvial aquifers).The directives do not state anywhere that the AER has their own discretion regarding low risk water bodies, and only that the screening criteria must be met.
Further examples of concern are TDLs being issued for spring fed water bodies/ponds/dugouts that have been created where none existed before, without the appropriate EPA approvals.
It is understood that in most levels of government, organizations within government tend to be both the approving and regulating authority. This holds true as well for municipal governments who are both the approving authority as well as responsible for compliance. However, we believe that with respect to water, the Legislation (Water Act) is clear that “The property in and the right to the diversion and use of all water in the province is vested in His Majesty in right of Alberta”. Much like municipal councils being unable to delegate their authority for land use decisions, we believe Alberta Environment and Protected Areas should not be able to delegate approvals for water licenses. The Water Act legislation falls under EPA and therefore we believe the only way for the province to take a holistic approach to water conservation is that all applications to divert water for any use should be approved by EPA only. The AER should continue to be the regulator of the TDLs and manage the compliance and complaint process.
We strongly encourage the Government of Alberta to implement a red tape reduction effort, if required, to make wastewater effluent more accessible (through policy changes if required) for alternative uses such as hydraulic fracking.
We have requested information on many occasions on how fresh water currently being utilized in oil and gas operations fits into the drought mitigation plans at the provincial level. It appears that the current requirements that would curtail freshwater usage for hydraulic fracking may not meet the moral obligations that most Albertans have regarding the hierarchy of how fresh water should be prioritized and allocated. We encourage the Government to implement clear triggers for reduction of freshwater usage for oil and gas operations in their drought mitigation plans so that Albertans can feel confident that we have struck a balance between industry use and residential and agricultural needs.
Relevant legislation, policy and other documents considered:
RMA Background:
2-23F: Amendments to the Municipal Government Act – Section 619
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta urge the Government of Alberta to amend Section 619 of the Municipal Government Act to state that decisions made by provincial regulators in granting licenses, permits, approvals and other authorizations under their jurisdiction must be consistent with municipal statutory land use planning related to the protection of productive agricultural lands, impacts on municipal infrastructure, existing land uses, and other possible local project impacts.
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Alberta Environment and Protected Areas
The RMA’s resolution is timely as EPA is engaging in opportunities to address barriers and enhance water availability. The department will ensure the RMA’s resolution is considered as an opportunity identified to enhance water management as part of this engagement. EPA staff appreciate the RMA’s input to the engagement process so far, and if you would like more information on the process, it is available at alberta.ca/water-availability-engagement. Please note the water availability engagement has been extended until January 24, 2025.
The AER’s assessment of TDL applications is undertaken in accordance with Alberta’s Surface Water Allocation Directive. Many energy development activities can use freshwater alternatives; however, there can be technical and logistical challenges, along with an increased environmental risk if spilled. The provincial Water Conservation Policy for Upstream Oil and Gas Operations and Aer’s companion document, Manual 025: Applications Under the Water Conservation Policy for Upstream Oil and Gas Operations, include specific requirements to identify alternative water sources and examine the environmental net effects of using potentially available alternatives. In 2023, the AER made additional regulatory changes (found in Directive 077: Pipelines – Requirements and Reference Tools) to encourage the use of alternatives to non-saline water by enabling poor-quality water to be stored and used for operations and providing options to move water between sites using temporary pipelines.
Under the Water Act, if drought restrictions are implemented, all water licensees are required to reduce water use. Implementing drought restrictions is based on the terms and conditions of each licence, including the maximum rate of water extraction, and the water level at which extractions must cease to ensure water is available for other users (based on licence priority). TDLs are generally first to be suspended or cancelled because they have no priority.
It is important to note the above mechanism for implementing drought restrictions is distinct from the 2024 water sharing agreements applied in southern Alberta, which are voluntary in nature. Earlier this year, major water users voluntarily agreed to reduce their water use so that drought restrictions could be avoided.
For new TDLs issued during drought conditions, drought response measures may vary depending on the location and seasonal factors. In some instances, EPA may issue low-flow advisories that restrict the approval of new TDLs. At such times, the AER would adhere to department’s direction and guidance, which may result in TDLs being issued for water sources such as borrow pits, dugouts, or reservoirs in preference to natural sources.
Development:
Although the Government of Alberta response acknowledges some of the concerns and requests highlighted in Resolution 7-24F, it does not make commitments towards the specific action items in the resolution’s operative clauses. It is encouraging that EPA references past actions taken to limit freshwater usage by industry in Directive 077. However, the response does not address the lack of adherence to this policy concerning the requirement for industry applicants to consider all other alternative water sources to discourage the use of freshwater, as highlighted in the resolution. Additionally, the government response does not address one of Resolution 7-24F’s operative clauses which calls for amendments to the Responsible Energy Development Act that would ensure license granting authority for only EPA instead of the Alberta Energy Regulator as well. RMA assigns this resolution a status of Intent Not Met and will continue to participate in the ongoing Water Availability Engagement and monitor other opportunities for input related to this resolution.
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