Kootenay coalbed methane big headache for Liberals

VICTORIA - B.C. hasn't even tapped into its newest energy resource, and already the province is in a war of words with the U.S.
The government sees big money and new jobs from coalbed methane, a natural gas found in coal deposits. B.C. has lots of coal, and lots of coalbed methane - perhaps enough to equal 100 years worth of current natural gas production.
So the Liberals have been continuing the effort begun during the NDP years to exploit the gas fields. The first auction of leases, covering land in the East Kootenay, ended this week. Within a few days we should learn how much companies were willing to pay.
But there's a problem. Coalbed methane development is untested in B.C., and a relatively new industry in North America. That means some people are bound to be nervous about damage to the environment.
It's easy enough to find reasons to be concerned.
Conventional natural gas is usually found in large pockets, under pressure. Companies drill a well, the gas flows out and when it's gone they cap the well and move on. It's relatively tidy, and familiar.
But coalbed methane is found within the coal seams, so companies need to drill a lot more holes.
And the methane is usually trapped beneath underground water that must be pumped out before the gas will flow. Clean water is no problem. But if it's contaminated with salt or other pollutants, it has to be pumped back underground to prevent environmental damage.
Some early development efforts in the U.S. did significant environmental damage. But coalbed methane now makes up about five per cent of U.S. gas production, and the companies have about 20 years of experience. With care and appropriate regulation coalbed methane can be safely produced.
Not everyone agrees. The Liberals have run into a wave of opposition to their plan to launch the industry by selling drilling rights in the Kootenays.
Many local people - including municipal politicians - are worried about the number of wells that will have to be drilled and potential environmental damage. They've joined forces with powerful Montana politicians who are concerned about cross-border pollution that would affect Glacier National Park. (Montana has big plans for its own coalbed methane development, but relatively little has happened so far, in part because of the threat of environmental lawsuits.)
Things got worse this week when federal MP David Anderson weighed in on the side of the Americans. Anderson, environment minister until he was dropped by Paul Martin, wrote current Environment Minister Stephane Dion calling for a federal review of B.C.'s plans.
The provincial government argues - convincingly, in my view - that it has taken the necessary steps to ensure development will only go ahead if it's safe, setting a string of conditions on the leases and writing stiff regulations.
The problem is that those claims rely on trust - trust that the rules will be enforced, trust that the government will cancel leases if development is risky. And trust is in short supply.
It's a mess. And one that could have been avoided.
The Kootenay leases are the first ones auctioned off because energy companies said they'd like a shot at the area.
But there are other parts of the province with good potential, where local residents are familiar with the energy industry. Any one would have been a better place to launch the industry, even if the initial return was lower.
This kind of brawl is in no one's interests. Uncertainty about the legal threats to development will force down the price companies are prepared to bid for the leases. Future wrangling will damage the province's reputation among resource companies as a safe place to invest.
The government has held consultations in the region, and sent a delegation to Montana.
But it hasn't been able to sell coalbed development.
That challenge will be every bit as touch as the technical hurdles.
Footnote: Energy Minister Richard Neufeld is responsible for coalbed methane. He's been more combative than conciliatory with both local citizens and Montana politicians, questioning everything from their motives to their judgment. So far, it's been an ineffective approach, reinforcing the impression the government isn't listening to concerns.