Matt Simmons, Local Journalism Initiative Reporter, Kate Schneider, The Narwhal

This investigation is a collaboration between The Narwhal and Investigative Journalism Foundation.

On a warm mid-August afternoon in 2022, a BC Energy Regulator inspector drove to an oil and gas site in the northeast part of the province.

The inspection was one of more than two dozen stops for the compliance and enforcement officer that day, and it wasn’t long before they discovered problems.

“I found that the diesel tank containment was about half full of water and sludge/sheen,” the inspector wrote in their notes, referring to a system designed to prevent diesel leaks from contaminating the environment. “Upon looking closer at the fluid, I noticed that there were six (6) dead birds floating in the diesel/water mixture. … The birds were black (like a small raven or a crow) but also had what looked like moss on parts of them, so I think they had been in there probably most of the summer, obviously not real recent.”

The inspector, a compliance and enforcement officer with the government regulator, wrote they spoke to the facility operator, who agreed to clean out the container after being shown the dead birds. The operator did not follow up with the government agency to confirm whether the company finished the clean up, the notes added.

“Having the containments cleaned out before the things are half full of water and being aware of the hazards associated with dirty containments should be observed prior to dead wildlife being found,” the inspector added in their notes. Yet, despite an apparent infraction of laws and regulations that led to the death of wildlife, the inspection concluded with a confirmation the site was in compliance.

This is not a story about one company being given a passing grade after an inspector identified potential infractions. BC Energy Regulator officials have frequently given companies the benefit of the doubt after inspectors identified potential infractions, according to an investigation by The Narwhal and the Investigative Journalism Foundation.

The numbers suggest a widespread pattern: the regulator is failing to hold oil and gas companies accountable when they potentially violate regulations.

In more than 1,000 instances, inspectors documented a series of apparent environmental infractions, yet the sites were marked as compliant with regulations designed to protect public health and the environment, according to more than 40,000 records released through freedom of information legislation.

The BC Energy Regulator is a provincial agency with a mandate to protect public safety and the environment from infractions by energy industry stakeholders in a range of activities, including pipelines and major projects in oil, gas, fracking, liquefied natural gas, geothermal and hydrogen. But in many cases, the records reviewed for this investigation suggest the watchdog — which is largely funded by the oil and gas industry — is overlooking infractions that could cause damage to ecosystems or threats to public health and safety.

Nancy Olewiler, a retired professor from the school of public policy at Simon Fraser University, said the internal records demonstrate a troubling pattern that shows the government isn’t serious about ensuring oil and gas companies follow the rules. This erodes public trust in the province’s ability to prevent ecological damage and protect communities, she said.

“It undermines whatever policy stance they take — if you have transparency and accountability, you will have more credibility,” she said. “Why is this going on and what are we missing and will it have a legacy that we’ll find out we poisoned drinking water or killed off a bunch of caribou or something else?”

The Narwhal and Investigative Journalism Foundation reporters spent several months reviewing records of BC Energy Regulator inspections conducted between 2017 and 2023. To sort through the tens of thousands of inspection reports, the Investigative Journalism Foundation created a program that used OpenAI’s GPT-4o model to flag reports marked as in compliance with provincial regulations but which included comments that suggested potential infractions. Each report identified by the model was then manually verified by The Narwhal to remove any incorrectly flagged reports. (Read more at the bottom of this story about how we used artificial intelligence, and how we navigated concerns about accuracy and ethical use.) As part of this investigation, journalists asked government officials dozens of questions and spoke to several experts familiar with oversight of the oil and gas sector.

B.C. Premier David Eby’s office declined an interview request, referring questions to the energy ministry, which, in turn, referred questions to the regulator. The BC Energy Regulator also declined an interview request and did not directly answer many questions. In an unsigned emailed response, the regulator said compliance and enforcement officers use a “graduated enforcement model” to address situations where a company is failing to meet government regulations.

“The action taken to address a specific non-compliance is dependent on the nature of the non-compliance and case-specific circumstances,” the email said. “The [BC Energy Regulator] is confident in the processes and systems in place to manage compliance of industry in ensuring the protection of the environment and public safety.”

The email also said the regulator’s role was to provide “sound regulatory oversight” of industry and to “ensure companies comply” with provincial laws and their permit conditions.

“We do not advocate for industry or solicit economic development.”

‘Serious’ problems regularly found at B.C. oil and gas sites

Hundreds of the apparent infractions described in the reports appear to relate to potential contraventions of provincial regulations, including emissions leaks, fuel and chemical spills, high levels of explosive gases present at industrial sites, strong odours emanating from well sites onto public and private land and other issues. The documents also include hundreds of apparent administrative errors, such as active gas wells and pipelines marked as deactivated or vice versa, outdated equipment and missing or illegible signage warning of the presence of flammable or explosive gases. None were flagged for non-compliance in BC Energy Regulator databases.

The process of addressing infractions starts with issuing non-compliance notices and escalates to warnings and orders, according to the regulator’s compliance and enforcement manual. Of the records reviewed by The Narwhal and Investigative Journalism Foundation, BC Energy Regulator inspectors flagged 2,527 separate instances of non-compliance. During the same period, the regulator issued 112 warning letters, 165 orders, 121 tickets totalling $7,820 and 45 administrative penalties totalling $651,750, according to publicly available records. None of that enforcement action was related to the files reviewed for this investigation.

Dozens of the records marked compliant with oil and gas regulations included apparent infractions noted as “serious,” or were described by inspectors in terms that indicated significant non-compliances. In some cases, the records reveal inspectors concluded sites were out of compliance but noted they would give the inspection a pass in the regulator’s official records.

The investigation found some sites were given a pass despite notes indicating hydrogen sulfide leaks, methane leaks (often at levels considered highly explosive), more than 80 improperly deactivated pipelines, abandoned and vandalized oil or gas well sites, chemical and hydrocarbon spills and leaks and damage to fish-bearing streams and other watercourses. Among the findings BC Energy Regulator enforcement officers deemed to be in compliance with provincial rules were :

• Evidence of wildlife frequenting a contaminated area: “Upon gently poking a stick in the bottom of the flare pit, a strong hydrocarbon odour was detected. Due to system limitations, this inspection will show as a PASS, however, there are concerns about the contaminated flare pit and the style of fencing to keep wildlife out.”
• A spill of approximately 30,000 litres of oil onto Crown land.
• Failure to clean up a facility, rendering years of restoration work ineffective: “Unfortunately, due to delays this site will see more than seven years of vegetation growth destroyed and a new disturbance will have been initiated.”
• Numerous mentions of “serious” gas leaks, including several longstanding issues: “It has been deemed a serious [leak] since 2008.”
• Potential contamination left for more than eight years: “There are numerous wildlife tracks attracted to the area… The same request was required in October 2014 but nothing was received.”
• Dangerous levels of harmful and explosive emissions: “I put a latex glove over the surface casing vent and the glove inflated immediately and blew off of the vent in approximately 30 seconds. My personal monitor over-ranged on [low explosive limits] when the glove blew off and I bent over to pick up glove. This well will be tested again sometime this summer I suspect?”
• Potential impacts on ecosystem health: “a waxy substance on top of the liquids and covering the bullrushes.”
• References to issues inspectors appear to consider egregious but are not officially marked as such: “Normally, this would be a SERIOUS deficiency.”

Numerous inspection notes named specific breaches of rules and cited the applicable government regulations, but the files were still marked as being in compliance. Several notes referred to “system limitations” that prevented officers from flagging a company for non-compliance. Some inspection notes suggested companies — and the regulator — were aware of problems for years and, in many cases, noted repeated apparent infractions raised by the compliance and enforcement officers on multiple subsequent inspections.

According to the BC Energy Regulator’s compliance and enforcement manual, officers have discretion to take “appropriate actions” when finding non-compliances, which range from “non-compliance notices to more formal, statutory enforcement actions.” The manual does not direct inspectors to note instances of potential non-compliance in their notes.

The regulator said its staff consider several factors, “including the severity of actual or potential impact to the environment and public safety, the factual circumstances of the non-compliance, the compliance history of the permit holder, as well as how to achieve the best remedy and reduce the likelihood of repeat non-compliance.”

“Comments, as part of inspections, are often used as a mechanism to identify issues that are not in non-compliance to permit conditions, regulations or [laws], but that officers still want to identify to a permit holder,” the regulator said. “This communication approach builds a compliance record that can then be utilized in future inspections.”

‘Permitting systematic pollution’: investigation reveals apparent pattern of lax enforcement in northeast B.C.

Asked why inspection reports and field notes by inspectors are not routinely made public, the BC Energy Regulator said inspection reports “can contain personal and/or confidential information and are subject to [freedom of information] review to allow for proper redaction of such information.”

The Narwhal has previously reported on inspection records released through freedom of information legislation that did not include significant personal information apart from names of compliance and enforcement officers — information publicly available through an online government directory.

When asked why the provincial regulator does not simply remove personal information and publish the reports — a method used by the Canada Energy Regulator — the regulator said B.C. conducts about 4,000 inspections annually and doesn’t have the resources to publish all of them. The regulator noted it publishes summary information about infractions on its website. This means any potential infractions inspectors do not mark as non-compliant are only included in their notes — which are not routinely made public.

B.C. Energy Minister, Adrian Dix recently boasted about the energy regulator during a press conference, telling reporters: “The BC Energy Regulator is known for its transparency.”

Dix declined an interview request and referred questions to the regulator.

Deborah Curran, executive director of the Environmental Law Centre at the University of Victoria, said the glimpse into the regulator records reveals a “systemic pattern showing that the approach of the [BC Energy Regulator] is just to work hand in hand with the oil and gas industry, not to protect the environment.”

When the regulator was created in 1998, then called the BC Oil and Gas Commission, it assumed all responsibility for the burgeoning fossil fuel sector in the province. At that time, it was tasked with being a “one-stop shop” for oil and gas companies wishing to do business in B.C., Curran said. While its mandate has evolved in the intervening decades as its responsibilities expanded, she said the regulator’s origins set the stage for the widespread lack of enforcement, which she noted is “always discretionary.”

“There’s nothing that mandates enforcement,” she explained. “Basically the regime of the [regulator] is permitting systematic pollution of the entire northeast. There’s an undercurrent of, ‘well, there’s no one out there, so who cares.’ That’s a very problematic kind of thing to get over. If it was adjacent to Vancouver, there would be tons of complaints going on. In the northeast, there’s the impression it’s just this vast wasteland.”

Several inspection records noted complaints from landowners living near oil and gas development about numerous issues, including odours emanating from nearby wells, soil contamination, spread of weeds and invasive species to private fields, crude oil “spray on close by crops” and, in one case, a “dead cow” found near an old well site.

None of these findings were marked as non-compliant in the inspection reports.

Former regulator employee says process to hold companies accountable is cumbersome

Curran suggested the regulator may be reluctant to make use of its full powers because it’s afraid companies can fight back with legal action, which would effectively “hamstring” the regulator’s resources.

As an example, she explained how B.C.’s environmental management legislation allows the province to issue a clean-up order, but it struggles to enforce these orders due to the power dynamic between companies and provincial officials.

“Every single cleanup order that’s been issued against an oil and gas company, like for a leaking underground storage tank of a gas station, for example, has been challenged in court,” she said. “Then it just gets bound up in court such that the province doesn’t issue those orders.”

Even when compliance and enforcement officers want to cite companies for failing to meet regulations, the process to escalate a non-compliance in the regulator’s systems is onerous, time-consuming and requires multiple levels of government staff to weigh in, according to one former BC Energy Regulator employee. The Narwhal and Investigative Journalism Foundation agreed to protect their identity because they still work in the oil and gas sector and could face repercussions for speaking with the media.

“You need to have the approval and sign off of the senior management team … especially if it’s considered a large case or it’s in the public interest or one of those that’s going to end up or potentially end up in the news,” the former employee said. “It then has to go through a screening to make sure that it is okay to be able to move it forward into charges. And from there, prosecutor services will take a look at it and they’ll have a whole suite of questions that they have to go through in order to say yes.”

They added the regulator is in frequent communication with the company during that process, which can take several months.

“If they come back and go, ‘Well, we’re going to do X, Y and Z,’ sometimes no charges will go forward [because] they’ve now gone ahead and fixed whatever the issue is. So it stays off their record and it doesn’t become something that can hang over them in the event that there’s a second incident or a third incident.”

17 enforcement officers, 3 technical advisors and 7 supervisors are responsible for entire province

B.C. is on the cusp of a significant expansion of natural gas development to supply the new liquefied natural gas (LNG) export industry, while more than a dozen other energy projects are being fast-tracked for development, in part to address tariff threats from U.S. president Donald Trump.

“I think a year ago our current government would have had a harder time supporting oil and gas development because climate and environment was a little higher in the order,” Olewiler said. “Now it’s: ‘Oh my god, what are we going to do when the border is screwed up?’ If you’re thinking about the next three-and-a-half years under our imminent hoped-for takeover by a foreign hostile and you’re looking for new markets and a way to sustain the B.C. economy, you’re going to look at gas.”

Gas exploration and production has already surged in the northeast, where the vast majority of BC Energy Regulator’s inspections are conducted. In 2024, Shell — one of five companies behind Canada’s first major LNG export project, LNG Canada — conducted initial work on 73 B.C. gas wells, roughly equivalent to the total amount it has drilled over the past six years, according to BOE Report, an industry publication.

The B.C. government is now expanding the regulator’s responsibilities to include renewable energy projects and major transmission lines, including a new 450-kilometre transmission line which will largely supply electricity to industrial infrastructure, including LNG plants. Yet, the regulator currently employs just 17 compliance and enforcement officers and three technical advisors to conduct field-based inspections. Those employees report to seven senior staffers, who also have “a role in conducting field compliance, from inspections to investigations,” according to the regulator.

The former regulator employee also noted how the prevalence of administrative errors, which at face value appear to be minor offences, but could lead to larger problems.

“Left unchecked, it turns into a potentially bigger nightmare down the road,” they said.

Olewiler said this raises the question of whether B.C. is prepared for the impending uptick in natural gas development.

“You’ve got a regulator and you’ve got regulations that are clear — why isn’t there the action? It’s a responsibility on the part of the companies and on the regulator.”

Editor’s note: The Investigative Journalism Foundation used a two-step system to analyze the BCER inspection reports: AI analysis of the over 40,000 reports followed by human review of the reports flagged as concerning. We used OpenAI’s GPT-4o via Microsoft Azure’s API to classify the reports from 2017 to 2023 based on their content. The goal was to flag cases where an inspector marked a site as compliant despite including comments that suggested environmental or safety hazards. This process was designed to assist, not replace, human judgment, enabling a reporter to efficiently review reports of interest and making the analysis of over 40,000 records possible. We followed the Investigative Journalism Foundation’s policy on AI use in reporting, which has detailed guidelines on the ethical best practices to follow when doing AI-assisted reporting.

We merged two datasets—one from BCER’s older Kermit system and another from its newer CM-IS system—standardizing column names and data values where necessary. After testing the classification model on 300 reports and manually verifying the results, the model achieved approximately 90 per cent accuracy. Adjustments were made to the prompt based on misclassified cases, and technical refinements were implemented to handle API errors.

The classification process excluded reports already marked as non-compliant by BCER inspectors and processed over 20,000 remaining reports in batches of 1,500. The final classifications were saved in CSV format and reviewed by a reporter.

It’s important to emphasize that our methodology prioritized accuracy and we erred on the side of undercounting concerning reports. Specifically, we relied on GPT-4o to identify concerning reports and then a reporter verified them. There may be concerning reports that GPT-4o did not catch in the initial analysis and therefore the total number of problematic reports may be higher.

Learn more about our News Monitoring here.

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