Canadian fracking firm Nexen had its water use license cancelled by the BC Environmental Appeal Board (BCEA )in a potentially precedent-setting decision. BCEA cited Nexen’s fundamentally flawed science and its failure to consult in good faith with the nearby Aboriginal community known as the Fort Nelson First Nations.

Prior to the decision, Nexen was allowed to pump over 49 million cubic feet of water per year from Tsea Lake and the Tsea River. The company claimed that the water used at their operation would not cause adverse environmental effects, but in their decision BCEA stated, “The evidence before the panel established that excessive water withdrawals may cause adverse effects on the habitat of aquatic and riparian species, including species that the First Nation depend on for the exercise of their treaty rights.”

Nexen will be able to use the remaining water that it has accumulated prior to the decision.

Fort Nelson chief Liz Logan commented on the decision, “Our members have always used the Tsea Lake area in our territory to hunt, trap and live on the land. The company pumped water out of the lake, even during drought conditions.”

Nexen is actually owned by Chinese oil giant CNOOC Ltd., which is China’s largest producer of offshore crude and natural gas. The company has encountered other legal troubles in Canada this year, with recently issued suspension orders on 25% of operations at its Long Lake facility in Alberta, for failure to comply with regulations. The suspension followed a rupture at the same facility in July, which is what first drew the attention of regulators.

The Nexen decision comes amid a rising trend of increased scrutiny on fracking operations in Canada, with Quebec and New Brunswick having placed temporary bans on the technology. These were implemented due to the heavy water consumption of the practice, as well as increased hospitalization rates of those living near fracking areas.

Because energy prices have dropped dramatically in the past year, Nexen representatives stated that their development plans had already been largely scaled back, lessening the impact of the board’s decision. Fracking operations in the U.S. have similarly slowed, but other fracking firms in Canada like Suncor Energy and ConocoPhillips are continuing to move ahead with their nearly finished sites in a move that will maintain downward pressure on energy prices.

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