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FRACKING AND IRON TRIANGLES: Who makes it into the policy process?

Leah Johnson

#1212541 Dr. Lars Hallstrom & Dr. Dittmar Mundel

POL 424 & IDS 390 Fall 2012

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Introduction

The issue of hydraulic fracturing has slowly been gaining public attention in recent years

with two prevalent discourses framing the issue. Hydraulic fracturing has either commonly been

depicted as a technological savior that will provide oil and gas sources for years to come, or as

an environmentally disastrous procedure that will allow us to continue to contribute to the

destruction of our water and land. Hydraulic fracturing, herein referred to as fracking, is a

controversial procedure of drilling for and extracting unconventional oil and gas sources. Many

landowners, environmentalists, and scientists alike make the argument that fracking

contaminates ground water; is even more environmentally unfriendly than conventional drilling;

uses an enormous amount of fresh water that Albertans cannot afford to waste or lose; and, uses

chemicals in the ‘frac fluid’ that cause myriad health problems. Although not all research studies

have been completed in Canada, comparable studies completed in the United States are able to

provide us with many examples where the concerns linked with fracking have been proven valid

(Bamberger and Oswald, 2012; Kerner, 2012; Rahm and Riha, 2012; Tilley and Muehlenbachs,

2011). However, despite these research findings, research on fracking is often treated as

inconclusive or not definitive enough to put a moratorium on fracking for industry and policy

makers because of the failure to do baseline testing on factors such as water and air quality

(Kerner, 2012; Bamberger and Oswald, 2012). Although there are studies proving the inherent

risks and dangers of fracking, Alberta oil and gas industries have capitalized on fracking

procedures to continue oil and gas exploration, so much so that there are currently 171,000

fracked wells in Alberta (Alberta Energy 2012, Shale Gas) with no foreseeable stop to fracking

procedures in sight.

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Many questions arise concerning fracking and public policy, given the degree of

controversy that surrounds the issue. For example, if the potential dangers have not been

adequately researched through baseline testing, why does the the oil and gas industry continue to

drill at the risk of public and environmental health? Has the Alberta government responded

diligently enough to address the concerns raised about public health and Alberta’s environment?

Although the Energy Resources Conservation Board (ERCB) is in charge of monitoring oil and

gas activities and also investigating public concerns, why has baseline testing not been

implemented and why have landowners been left with little support when their water has been

contaminated? In this paper I will investigate the relationship that exists between the Alberta

government, the ERCB, and the oil and gas industry, in the attempt to understand how public

policy on fracking has been formed and how it also fails to address the concerns present in public

opinion, such as water contamination, water use, and environmental impacts.

When analyzing the formation of public policy, it is important to note that inaction, or the

act of ignoring an issue, is indeed considered a marked policy action. Governments make the

conscious decision when and when not to act or pay attention to public concern. Furthermore,

surrounding the substantive issue of fracking in Alberta, the public constitutes an additional

group, a group which feels powerless in protecting themselves and their environment in the face

of fracking and the dangers it may have. I propose that an iron triangle of public policy exists in

Alberta. This policy structure implies that our democratic system is weak if the government is

failing to represent all its citizens, including those that are unable to penetrate into the iron

triangle in Alberta.

To begin exploring the issue of fracking and public policy, I will first explain what

exactly fracking is and explore some the concerns surrounding this method of extracting oil and

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gas. Secondly, I will describe the theory of iron triangles in public policy and what their

implications are for inclusivity in the policy process. Third, I will address the roles of the four

actors surrounding the issue of fracking in Alberta: the concerned public, the Alberta

government, the ERCB, and the oil and gas industry. Fourth, I will analyze whether or not an

iron triangle exists in Alberta. Finally, I will discuss the implications of such an arrangement in

our policies specifically. I argue that an iron triangle exists in Alberta public policy which is a

significant issue because it implies an impermeability of actors outside of the iron triangle in

affecting public policy which means that there is an inherent weakness in our democratic system

in Alberta as well as the inability to adequately react and address risk.

What is fracking?

Fracking is an industrial process for extracting unconventional, shale, oil and gas in a

well drilled first vertically, ‘typically’ from 800-3000 meters and then horizontally breaking

through the shale stone or coal seams. Unconventional oil refers to the method in which the oil or

gas is obtained, because we can no longer rely on conventional sources, considering they are

continually decreasing in productivity. Conventional oil refers to wells where little energy is

expended to extract oil and gas out of the ground; a well is drilled and the oil or gas either comes

out naturally or can be pumped out quite easily (ERCB 2011, brochure). Although fracking is not

a new method for extracting oil and gas, the first well having been fracked in Kansas in 1947,

there is a large window for error and complication given the complexity, magnitude, and scale of

the procedure that is being used today (Adachi, J., Siebrits, E., Peirce, A., Desroches, J. 2006,

740). Even in its simplest form, fracking is a complex procedure, in comparison to conventional

drilling, because it involves the use of at least three processes: breaking through underground

rock formations with fluid or small scale explosions to create the well, pumping fluid into the

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well at high pressure, and the use of a “fracture propagation”, such as sand, which is used to hold

the fractures open to allow the gas to escape (Adachi, J., Siebrits, E., Peirce, A., Desroches, J.

2006, 739). According to Adachi, et al., there are myriad complications involved with fracking

because of the ‘on the ground conditions’ that cannot always be foreseen in ‘ideal type’

situations in laboratories and studies. It is difficult to foresee all possible complications that can

take place on a job site while in a laboratory or in the planning stage of a job. These

complications can include:

the presence of layers of different types of rock; changes in magnitude and/or orientation of the in situ confining stresses; the presence of a nearby free surface; the leak-off of fracturing fluid from the fracture to the surrounding rock, which is a history-dependent process; the effects of shear and temperature on the fracturing fluid rheology; the transport of suspended proppant particles within the fracture, and modeling of fracture recession and closure (Adachi, J., Siebrits, E., Peirce, A., Desroches, J. 2006, 740).

Fracking is more resource intensive than traditional oil and gas extraction methods and it also

has a higher risk of complication, such as those complications listed above, given the complex

nature of the procedure.

In a 2011 report, the ERCB list the extensive number of challenges associated with

unconventional gas, all of which we can apply specifically to fracking. The cited common

regulatory challenges, which I feel are also included in the public’s concern, include: well

spacing requirements, real or perceived danger to ground water, intra-well communication, water

management (large volumes are necessary and are unsafe to return to the water cycle for human

consumption due to extreme contamination), transportation of water (either fresh or

contaminated), potential spills of fracturing fluid and contaminated water, continuous damage to

the surface environment due to the need for “multiwell pad sites”, poorly constructed well

casings, and air emissions including “nitrogen oxides, hydrocarbons, carbon dioxide” (ERCB

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2011 Report, 5-7). This paper will focus on the issues of water contamination, water use, well

casings, the toxicity of frac fluid and interwell communication.

The challenge in determining the risks associated with fracking, for citizens and policy

makers, is accessing adequate information to allow for educated assessment, understanding, and

judgements. For example, while the standard response of the government, industry, and ERCB is

that there are no documented cases of water contamination due to fracking (ERCB 2011,

brochure; Alberta Energy 2012, Shale Gas; CAPP 2012), there is also unarguably evidence from

landowners in rural Albertan areas that would prove otherwise (Ernst 2012, Ernst vs. Encana;

Cameron and Richards, 2011; Campbell and Campbell, 2012; Tilley and Muehlenbachs, 2011).

However, the evidence provided by landowners is often considered incomplete because they lack

baseline studies of their water or air quality to prove that there has indeed been a change in

quality. According to Bamberger and Oswald, industry and regulators fail to implement baseline

testing, which is the “complete testing of air and water prior to drilling and at regular intervals

after drilling has commenced” (Bamberger and Oswald 2012, 68). The term ‘adequate’ here is

quite ambiguous because while there are studies completed proving the risks and dangers of

fracking, they are still viewed as insufficient by industry and policy makers to make policy

changes, such as implementing baseline testing or requiring that companies publicly disclose all

chemicals used in their fracturing fluids (Bamberger and Oswald 2012, 68; Tilley and

Muehlenbachs 2011, 10). However, as this paper will prove, the failure to do baseline testing is

simply an example of regulators allowing the industry to carry on with their activities without

having to pay for the added costs of such testing that would also hold them accountable if

accidents were to happen.

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It is extremely difficult for landowners and farmers to prove that their water has been

contaminated without baseline testing on water and air quality. Although they are able to

noticeably tell their water is contaminated, through factors such the obvious presence of high

levels of gas, odor, or it is causing skin eye irritation, to list a few, they are unable to prove that

their water has actually changed if they do not have records of their water being clean prior to

drilling. Furthermore, often there are multiple wells on one piece of property or wells that have

“communicated” underground making it extremely difficult to determine which wells

specifically are causing damage to water. Often landowners are unable to know which exact well

is the culprit, therefore they are unable to hold industry accountable (Tilley and Muehlenbachs,

2011). Another problem landowners face is that, after lab results determine that their water has

been contaminated, they are again unable to prove a particular company as the cause, because

industry does not fully disclose what chemicals they use in their frac fluid because it is protected

as a “trade secret” (Ernst, Ernst vs. Encana; Cameron and Richards, 2011; Campbell and

Campbell, 2012).

For example, Shawn and Ronalie Campbell, a couple living in the Ponoka, Alberta area,

had their water first tested in 2005 after “gas began burping from [their] water taps”. They had it

tested and “identified by isotopic comparison with energy gas samples and found it to be

thermogenic in nature, meaning coming from a deep formation”. The water contained methane,

ethane, propane, butane and sour gas (Campbell and Campbell, 2012). Therefore, their water

contained contaminants, natural and industrial, that it previously had not. Although the ERCB

has been involved, they have never definitively drawn a link to contaminants in the Campbells’

water or any particular well, although the Campbell’s land is riddled with oil and gas wells. They

have been left to themselves, without the help of Alberta Environment or the ERCB, to

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determine “why the water started accumulating gas from over 1700 meters below”, which is the

approximate distance where industry had completed horizontal fractures (Campbell and

Campbell, 2012). The standard industry, government, and ERCB response they receive is that

any gas in their water well is naturally occurring.

Barbara Tilley and Karlis Muehlenbachs, both professors at the University of Alberta in

the Department of Earth and Atmospheric Sciences, claim that “methane in an aquifer can come

from microbial sources such as reduction of carbon dioxide or by fermentation, but can also be

thermogenic gas which has migrated from oil, gas, or coal bed methane wells (Tilley and

Muehlenbachs 2011, 1). Therefore, the methane, specifically, in the Campbells’ water could be

naturally occurring. However, Tilley and Muehlenbachs also state that “microbes do not add

ethane, propane and butane to aquifers” therefore “gas in an aquifer may be a mixture of local

microbial gas and a migrating gas from a nearby oil or gas well” because apart from the methane,

the other gases present are not naturally occurring (Tilley and Muehlenbachs 2011, 1-2). They

conclude their study by stating that, although some water wells produce natural gas through CO2

reduction or fermentation, there are also sources of gas that are not naturally occurring:

Years of intensive resource exploitation in agricultural areas have left an impact on some domestic water wells in Alberta. The source of contaminants in groundwater can be best identified by carbon isotope values of ethane which is diagnostic of deeper gas bearing formations beneath the aquifer. Because drilling and completion of resource wells at any given region occurred at multiple depths in different decades, it is often difficult to differentiate between specific putative sources. It is possible to identify specific sources of contaminants in problem water wells if enough isotopic background is available (Tilley and Muehlenbachs 2011, 10).

Again, they argue that having proper baseline data is imperative in completing proper scientific

investigations into the sources of contamination. Without baseline data it is difficult for

landowners, like the Campbells, to determine the sources of the gas in their water wells.

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Another obvious problem, like in the Campbells’ case, is that when there are multiple

wells on a property, drilled by multiple companies varying distances apart, it also becomes a

challenge to hold any one company responsible. A problem associated with fracking specifically

is “intra well communication” (ERCB 2011 Report, 5). When listing concerns associated with

fracking, the ERCB states that “there have been occurrences of intra-zone communication

between wellbores that are being hydraulically fractured and adjacent wellbores, that are either

producing or being drilled, sometimes considerable distances away” (ERCB 2011 Report, 5). As

previously stated, fracking includes physically breaking apart the shale or coal seam through the

use of high pressure fluid or small explosions. This part of the procedure cannot be controlled

because we cannot control how exactly the rock will break, because of “the presence of layers of

different types of rock” and the “changes in magnitude and/or orientation of the in situ confining

stresses” (Adachi, J., Siebrits, E., Peirce, A., Desroches, J. 2006, 740). Intra-zone

communication means that often the fractures underground can end up meeting one another and

a transfer of fluids and gases can take place. Again, this ‘communication’ makes it difficult for

landowners to determine which exact well is causing problems for their water. If they are unable

to determine which well is responsible, they are also unable to hold industry accountable,

considering different companies may own different wells on one piece of property.

However, regardless of the fact that a landowner may not be able to prove which well

specifically to hold accountable, it does not mean that industry is not responsible for

contaminating their ground water. Therefore, fracking can be responsible for contamination

although the standard industry response is that there are no proven cases of groundwater

contamination. That simply means that nobody has been proven to be responsible. It does not

mean that it is not caused by industrial activities as industry would like the public to believe.

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The ERCB also includes casing as one of the known concerns about fracking, stating that

“potential conduits are existing wellbores (or the new well being fractured) with inadequately

cemented casing” (ERCB 2011 Report, 10). Apart from not being able to prove which wells may

be causing contamination, another common tactic the oil and gas industry uses to avoid

responsibility is claiming that fracking does not cause contamination to ground water although

the culprit could be poorly cemented well casings (Kerner 2012, 244). However, casing

construction is an integral step in the fracking process therefore inadequate casings cannot be

seen as a separate issue from fracking because every fracked well must also have a casing.

Furthermore, if improperly constructed casings is the reason for land or water contamination, the

public should be questioning the construction of all oil and gas wells because they all have a

well casing, conventional and unconventional.

Another concern is the amount of water fracking requires and the amount of

contaminants that the water ends up being laced with (Kerner, 2012; Rahm and Riha, 2012). On

average, 5.5 million gallons of water are used to hydraulically fracture one shale gas well,

although it should also be kept in mind that industry often treats and reuses contaminated water

on different drilling sites (Bamberger and Oswald 2012, 52). However, water remains an issue of

concern because once water has been contaminated with frac fluid, it cannot be purified or

returned back to the water cycle for human consumption. To dispose of contaminated water,

industry has to inject the water deep below the ground to ensure that it cannot be re-introduced

into our groundwater, lakes, and rivers (Kerner 2012, 242). Therefore, once industry uses water

to hydraulically fracture a well, the water is considered completely eliminated from natural

hydrological systems and no longer has the possibility of future human consumption.

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According to Bamberger and Oswald, substances in frac fluids range from “the relatively

benign to the highly toxic” (Bamber and Oswald 2012, 52). Furthermore, the following results

were listed in a study of 353 chemicals found in fluids used for natural gas production:

More than 75% of the chemicals could affect the skin, eyes, and other sensory organs, and the respiratory and gastrointestinal systems. Approximately 40–50% could affect the brain/nervous system, immune and cardiovascular systems, and the kidneys; 37% could affect the endocrine system; and 25% could cause cancer and mutations (Colborn, Kwiatkowski, Schultz and Bachran 2011, 1039).

In one particularly extreme example proving the chemicals’ toxicity, a worker was recorded to

have turned off a chemical blender during the fracturing procedure, which caused the fracturing

fluids to spill into the adjacent cow pasture. Within one hour 17 cows were dead after suffering

fatal gastrointestinal, neurological, and respiratory problems (Bamberger and Oswald 2012, 55-

59). Although this example of contamination highlights immediate damage to livestock, there

remains to be limited data proving the cumulative effects of frac fluid contamination on both

human and environmental systems.

According to Kathleen Kerner, speaking about hydraulic fracturing and new methods for

extracting natural gas specifically, “the potential environmental and health cost of mass-

extraction of natural gas seems to outweigh the benefits of the energy resource” (Kerner 2012,

245). She claims that the risks to environmental and human health are too high to try and

outweigh them with economic benefits that accompany oil and gas exploitation (Kerner, 245). If

the risks outweigh the benefits, why is our government allowing the oil and gas industry to

pursue hydraulic fracturing as a means to produce unconventional oil and gas and what policy

theories can be applied to understand the relationships that exist between the different actors

involved in this issue?

Iron Triangles

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In an attempt to understand the relationships present in the issue of fracking, it is

necessary to discuss the different actors as well as the degree of dominance any one actor may

have in effecting the policy process. In Alberta, oil and gas is the primary industry therefore it

has the privileged position of determining and shaping the public discourse because it is such a

great source of the province’s wealth, although whether or not one sees that as individual or

collective wealth is debatable (Hunter, Chrapka, Dwarkin, McKenzie, Plourde, and Spanglet

2007; Mansell and Schlenker, 2006). According to the Alberta Royalty Review Panel, “about

30% of the Government of Alberta’s total revenue comes from oil and gas royalties, and about

one in six Albertans are directly or indirectly employed in the energy sector” which contributes

to about one half of Alberta’s GDP (Hunter, et all. 2007, 45). It is not uncommon to hear the

phrase “Alberta is oil”; this phrase rings true considering that one industry has had the power in a

forty to fifty year period of shaping the province’s economic, political, social, and cultural

systems (Dorow and Gozi, 2011). Howlett and Ramesh state that “in a situation where one idea

set is dominant and unchallenged - such as often is the case for extended periods of time in an

area such as fiscal policy - a form of monopolistic or hegemonic community may develop”

(Howlett M., and M. Ramesh 1998, 471). Therefore, it is important to understand the

implications of having this dominant idea set, here being the dominance of oil and gas in Alberta,

in our society, government, and public policies.

The theory of iron triangles in public policy help us to visualize the nature of the

hegemonic community Howlett and Ramesh speak of. The theory also helps to explain the extent

in which the dominant idea or goal, here being the control and continuance of the energy sector

of Alberta, is unchallenged and remains so.

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Grant Jordan analyzes iron triangles in contrast to other “images of the policy process”,

such as issue networks (Jordan 1981, 95). He claims that iron triangles in the American context

are simply a policy structure composed of three groups, those being interest groups, federal

administrative or bureaucratic bodies, and Congressional committees (Jordan 96). Iron triangles

form a closed network of policy actors because they are stable and have a limited or exclusive

membership. They are characterized by “a degree of stability and predictability over time,

fragmentation limited through departmental recognition of participants, effective decisions

within sectors, closed debate” (Jordan 107).

Jordan contrasts iron triangles with issue networks, which have an unlimited and

unpredictable list of members and lack the authoritative heads in decision making that iron

triangles have (Jordan 96). He claims that issue networks could be more accurate in

understanding the policy process and the actors involved because “iron triangle uses too rigid an

image” while issue networks acknowledge the diverse and constantly changing list of influences

to the policy process (Jordan 116). However, while I do agree that in some cases iron triangles

may be too rigid to accurately demonstrate how all of our policies are formed, I do not think they

are too rigid to describe what is taking place in Alberta regarding energy, which I will explain

later in my paper.

Daniel McCool describes four key characteristics of iron triangles, which enable them to

maintain their dominance in dictating public policy: they mainly concern “distributive policies,

the congressional norms of reciprocity and logrolling, an autonomous decision-making process,

and a high degree of program implementability” (McCool 1994, 8). Distributive policies mainly

concern tariffs, land policies, subsidies, resources, etc., and are characterized as being extremely

stable, containing few actors in the decision making process, and having a high level of

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logrolling (Lowi 1972, 300 and 304). First, McCool states that iron triangles exist around

distributive policies. Money and resources are heavily concentrated in a small number of actors.

Second, reciprocity and logrolling are common place, both terms implying that there is often a

system of favors and economic and political ‘back scratching’ that benefit a closed number of

actors. This system can be in quite obvious ways, through public partnerships or endorsements,

but is also exercised through backdoor deals, making any changes in policy even more invisible

through unspoken acts of incrementalism. McCool states that one of the major consequences of

reciprocity and logrolling specifically is that there becomes an “inability of the government to

plan projects adequately on a comprehensive basis”, which further emphasizes the closed

relationship present in decision making (McCool, 98). Third, iron triangles have an autonomous

and unchallenged decision making process, therefore there is more control, increased exclusivity,

and fewer people with which to share the pie (McCool, 7). Fourth, iron triangles have a high

degree of program implementability; nearly all or most changes to policy or projects are passed

through the system quickly and with little debate (McCool, 8). The lack of debate mentioned, as

well the unchallenged decision making process, is evident when studying industry regulators or

other bodies which appear to keep institutions in check but actually do not.

Another valuable point of McCool’s to note is that iron triangles often have various

subcommittees that are meant to give the impression that the government is dealing with the

issue at hand (McCool, 9). The creation of committees and subcommittees and panels is to boost

the public perception that whatever the topic or issue of concern may be - it is being dealt with.

The public is given the impression that they no longer need to worry about the issue, or they

need not to begin worrying, because an official and powerful body is taking care of it. However,

the subcommittees’ sole purpose is to reinforce the goals of the triangle, rather than change or

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monitor their activities, as we would be led to believe. For example, if the public is increasingly

voicing that we do not have proper regulatory bodies in the oil and gas sector, the government

will claim that they are investigating the issue, like consulting specialists to determine possible

policy actions, or that they have created a new panel to do so, although the panel will have a

number of loopholes that will prevent it from actually being useful. These loopholes can include

appointing scientists that are employed by oil and gas sector or setting a narrow agenda of what

the panel will actually investigate. I will later determine whether or not this is the case in

Alberta.

The underlying implication of iron triangles within public policy is that they promote

undemocratic actions, which are obviously reflected in every stage of the policy process by

restricting the process to a small number of groups or individuals who are “dominating the

process and repelling all outsiders” (Vernon, Spar and Tobin 1991, 4). From identifying

problems, setting policy priorities, formulating and adapting policies, to policy implementation

and evaluation, iron triangles exert their influence and control. Alternative voices from outside

the iron triangle are either silenced, ignored, or publicly humiliated. We cannot talk about the

strength of democracy in our province as long as there is truly only one body, that is the

collective body that creates the iron triangle, which is responsible for every aspect of the policy

process.

Actors

Although there are many actors involved in the issue of fracking, as it is a complex

problem, I choose to identify four: the oil and gas industry, the Alberta government, the ERCB,

and those concerned about the dangers of fracking, whom I have already discussed in the section

on fracking. In this section, I will primarily discuss the first three actors listed above, their roles

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within the topic of oil and gas more generally, and then conclude by discussing what

implications their roles have more specifically for fracking.

I considered eliminating the ERCB from my argument and including the media as a third

actor in its place. While Andrew Nikiforuk refers to the ERCB as the “de facto rubber stamp for

oil and gas development” (Nikiforuk 2012, 181), therefore not really having any role at all, I

thought it was important to include them in my argument because its essential role is to fulfill a

check and balance within our energy industry. Identifying its role and its failures highlights the

lack of accountability that the Alberta government and oil and gas industry would like us to

believe exists.

Jeff Gailus makes a similar argument to mine about information and public policy, but

describes it as a “modern-day Triple Alliance” throughout his book Little Black Lies. A

difference between his argument and mine, beside the obvious difference in vocabulary, is whom

he includes in his “Triple Alliance” (Gailus 2012, 5). While the Alberta government and oil and

gas form two legs of Gailus’ argument, he includes the Canadian federal government as the third

actor in his argument, differing from my choice in including the ERCB. Eugene Lee and Antony

Perl, authors of The Integrity Gap, also draw attention to our federal system’s inability to move

forward with adequate and effective environmental policies. They claim that our governments

are often unable to properly implement environmental policies because of the split in

jurisdictional authority and the conflict between the two levels of government (Lee and Perl

2004, 11). While I do think that identifying the Canadian federal government is a worthy topic of

discussion, I decided that identifying the pitfalls of federalism in topics such as environmental

policy do not sufficiently address the lack of checks and balances within our system in Alberta

specifically.

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In the case of my argument, it is necessary to identify the first actor concerning the issue

of fracking in Alberta which is the oil and gas industry. Oil and gas is a business therefore their

primary objectives are profit and growth. They are not concerned with the social wellbeing of

our communities, the health of environment, or that our democracy is inclusive and participatory.

As a money making endeavor, the oil and gas industry is concerned with making money, which is

clear when reading the goals and strategies that Canadian Association of Petroleum Producer

(CAPP) list on their website.

CAPP represents its members who are producing 90 per cent oil and gas in Canada with a

revenue of about $100 billion per year (CAPP 2012, CAPP’s Mission). They are an useful

organization to include in this study because of their active role in representing Canadian oil and

gas and their activity in the public sector. On the CAPP website they state that their mission is:

to enhance the economic sustainability of the Canadian upstream petroleum industry in a safe and environmentally and socially responsible manner, through constructive engagement and communication with governments, the public and stakeholders in the communities in which we operate (CAPP 2012, CAPP’s Mission).

They continue to elaborate on their mission by stating their goals and strategies, which include:

ongoing improvement of their stewardship of the environment, health and safety while

simultaneously growing a profitable industry; constantly opening access to markets, increasing

growth, and building producer networks; developing a fiscal regime that strengthens the

economic health and continuance of oil and gas exploration; streamline the timeliness and

decrease the cost in which companies can access land; develop a regulatory body that works with

industry goals and operated at the lowest possible cost; work at maintaining and continually

developing a relationship with the government and public to allow for the achievement of their

goals more easily (CAPP 2012, CAPP’s Mission).

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Many of these goals may seem reasonable or acceptable, especially considering that they

include the environment and communities in their mission statement. However, it is important to

recognize that an organization cannot simultaneously try to maximize profit, minimize costs and

care for land through proper regulations while also trying to weaken the regulatory process to

allow for them to meet their goals as quickly as possible. For example, if CAPP’s goal is to help

a member company gain access to land at the lowest possible cost, they cannot at the same time

be overly concerned with giving landowners the fairest price for operating on their land. They

also cannot claim that they are concerned with health of the environment while trying to

strengthen and continue oil and gas exploration, keeping in mind that oil and gas exploration is

inherently at odds with caring for the environment considering the threat of climate change and

the already dangerous levels of carbon in the atmosphere (Warnock 2006, 23-24). Furthermore,

CAPP claims that they are also concerned with the environment but one of its goals is to “build

an efficient regulatory framework that meets industry objectives and that can be effected at the

least cost” (CAPP 2012, CAPP’s Mission). This statement is the equivalent of saying that they

want a strong regulatory body to protect the environment as long as it does not regulate their

activities or increase the cost it takes them to operate. The job of a regulator is to protect the

environment, not to minimize costs. All of the goals and strategies listed by CAPP contradict

themselves in the same manner.

An organization cannot operate through a cost-benefit analysis framework and also claim

to care for the environment and communities because they are not factors that can be quantified

fiscally, which also known as externalities. This point is extremely valuable to keep in mind

when viewing industry websites or advertisements. For example, on their More Facts. Less

Friction webpage, set up to counteract the public’s ‘misperceptions’ about the dangers of

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fracking, CAPP states that “the natural gas industry continues to work with regulators and policy

makers to ensure development is conducted in a responsible manner” (CAPP 2012, More Facts.

Less Friction). However, referring back to their goals and strategies previously mentioned, they

are primarily concerned with increasing profit and expansion and are continually trying to work

with government so that their activities are done as quickly as possible. Therefore, while they

claim that they are working with government and regulators to ensure responsible development,

they by nature of their goals and strategies will also continue to strive for less regulations

because they hamper the speed in which they develop.

The next actor that I will address is the Alberta government. It is not difficult to

understand the role of the Alberta government when looking at the Alberta royalty regime.

Understanding how royalties are being collected helps us understand the role of the government

in oil and gas because they highlight the difference in relationships between the government and

public and the government and industry. Oil and gas royalties are implemented through the

understanding of all actors that “resources belong to Albertans” and the government is merely

the public’s “agent and makes deals with developers to produce from those resources” (Hunter,

Chrapka, Dwarkin, McKenzie, Plourde, and Spanglet 2007, 22). The resources belong to all of us

and energy companies must pay us to exploit our resources, with the government being the

middle actor that must collect our payments. Therefore, we are able to use oil and gas royalties

as a clear example to understand if our government is doing its job in representing us by

determining if it is collecting adequate compensation for the resources that belong to us.

Ed Stelmach, as the new premier in 2007, set up an independent panel to review oil and

gas royalties in response to a growing number of Albertans questioning if we were receiving

adequate compensation for the exploitation of our resources (Nikiforuk 2010, 160). After

21

completing its mandate, the Alberta Royalty Review Panel concluded that “Albertans do not

receive their fair share from energy development and they have not, in fact, been receiving their

fair share for quite some time” (Hunter, et all. 2007, 4). Throughout their report the Panel argues

that through low royalties, tax breaks, and industry subsidies, the government has demonstrated

that they are not protecting the interests of Albertans but are merely enhancing the privileged

position of the oil and gas industry (Hunter, et all. 2007, 5).

According to the Panel, the royalty system in place today is outdated, the last major

changes happening in 1992, as well as unnecessarily complex (Hunter, et all. 2007, 64). The

system primarily only applies to conventional oil as well so it does not incorporate the added cost

to the environment by developing unconventional sources whose impact are more intensive on

the environment, nor has it been adjusted for the consequent rising cost of oil that is

accompanied by unconventional sources (Nikiforuk 2012, 165). That being said, the Panel also

claim that there have been “various tailorings over the years to adjust for particular resource

circumstances or spur different kinds of activity have added further layers of complication”.

These tailorings include: three different royalty tiers for oil and two tiers for gas, adjustments for

both natural gas and oil that account for low-productivity, four special programs for each oil at

the well level, and oil at the project level, and natural gas (Hunter, et all. 2007, 64).

The complexity of the system and number of adjustments and allowances the system

entails reflects the bending and tailoring of the government to maximize the profit margins of the

energy sector. Rather than tailoring the system to maximize the benefit Albertans receive

collectively for the exploitation of the resources that belong to them, the government has chosen

to privilege the oil and gas sector by allowing a complex system of cuts and breaks. The

complexity of the system also reflects a lack of transparency because the public is unable to

22

actually determine whether or not they are receiving their fair share of the profit being generated

by the oil and gas industry. The Panel draws attention to the fact that “the government of Alberta

is the trustee for the resource owners” and as the trustee it must “meet the highest standards of

performance” that come with that role (Hunter, et all. 2007, 93). The only way we can hold the

government accountable to their position “is if all stakeholders have access to the information

needed to assess standards of performance” and “without such information, ‘accountability’ is a

hallow and lifeless concept” (Hunter, et all. 2007, 93). Therefore, the Alberta government must

simplify the royalty regime to allow for full transparency so that Albertans can hold their

government accountable.

The next piece of the iron triangle in Alberta is the Energy Resources Conservation

Board (ERCB), who describe themselves as “an expert tribunal that has been regulating the

province’s energy resources for almost 75 years” (ERCB 2012, Who We Are). The ERCB lists

eight objectives on their webpage: achievement and maintenance of high industry regulatory

standards to ensure public safety, environmental protections, and energy resource conservation;

to be an active body in pinpointing and addressing issues that affect the oil and gas industry and

the stakeholders (including the public) who are affected by these issues; to improve decision

making processes that are just, efficient, and adaptable; to ensure that Albertans are not subject

to industry abandonment and decommission; improve relationships across organizations to allow

the ERCB to be in a position of success. They also list three objectives that relate to a high

standard of customer service and respect towards stakeholders (ERCB 2012, Who We Are).

Again, equal to CAPP, it is useful to understand the underlying implications and contradictions

present when reading the goals or objectives listed by the ERCB because they provide evidence

of the interlacing and reinforcing goals of all corners of the iron triangle.

23

Although they list the environment and the conservation of resources as one of their

objectives, as it essentially is the reason for their existence because their title as the Energy

Resources Conservation Board, they completely contradict this objective in their 2011

publication “Unconventional Gas Regulatory Framework—Jurisdictional Review” (ERCB 2011

Report, 16). They state that “of key importance to unconventional gas operators is efficiency of

development. Costs, delays, and uncertainty caused by regulatory processes will hinder

unconventional gas economics”, without defining what exactly ‘unconventional gas economics’

means (ERCB 2011 Report, 16). Specifically concerning fracking, they also state that “access to

large volumes of water from a variety of sources for hydraulic fracturing will be needed, so

timely assessment and approval of processes are required” (ERCB 2011 Report, 16). In these

statements, they make it clear that they are the same as industry, operating purely on a cost-

benefit analysis framework, rather than protecting and conserving the resources that their name

inherently would imply.

The ERCB’s only concern is that they allow for industry to operate at optimal speed,

efficiency, and with the lowest level of hindrance possible. They are not concerned with quality

assurance, or the protection of the environment, but that development is approved and proceeded

with as quickly as possible. Rather than discussing the environmental cost of using large

quantities of water and the need for strong regulations to ensure that our water is protected, the

ERCB demonstrates that their objective is the rapid approval of development projects. The word

‘conservation’ in their title would lead the public to believe that they are advocating for energy

and environmental conservation. It might even imply that it is concerned with lengthening the

time Alberta can prosper, and that it is operating with future generations in mind. This is

obviously not the case when they claim that additional “costs, delays and uncertainties caused by

24

regulatory processes” are a nuisance to the industry (ERCB 2011 Report, 16). In saying this, they

openly criticize their own existence, further reinforcing the goals that CAPP states on their

webpage.

Iron Triangle in Alberta?

It is now necessary to determine the existence of an iron triangle in Alberta. First,

following Grant’s definition of an iron triangle as a policy structure composed of interest groups,

administrative or bureaucratic bodies and Congressional committees, it is apparent that the oil

and gas industry is a powerful interest group within Alberta, the Alberta government is a

congressional or governmental group, and I am classifying the ERCB as the third actor within

Alberta’s iron triangle as fitting into the bureaucratic or administrative role as a regulator.

However, the groups’ existences alone do not necessarily imply a stable, exclusive policy

structure that form a monopolistic and hegemonic community.

According to McCool’s description of iron triangles, an iron triangle may exist if there is

a rigid policy structure that mainly concerns a distributive policy, a system of reciprocity and

logrolling, an unchallenged and streamlined decision making model, and easy program

implementability (McCool 1994, 8). It has been demonstrated that this is the case in Alberta.

It is apparent that the goals of the oil and gas industry, as illustrated by CAPP, are being

met. As previously stated, the oil and gas industry’s primary concern is with generating wealth

and ensuring the continuance, growth, and development of the oil and gas industry. The

government of Alberta’s role is as the trustee of Albertans’ best interests, which would also

include the health of Albertans’ bodies and in turn their environment. A healthy body cannot

exist if the environment that it is placed in and sustains it is being polluted and is unhealthy,

therefore in the case of this paper, the health of the environment and the health of the human

25

body are seen as being the same. The ERCB’s role is to regulate the oil and gas industry and

ensure the stewardship and protection of our environment. Although the goals of the Alberta

government and ERCB appear to both demonstrate a concern and responsibility for Albertans,

their actions depict that they are indeed working to reinforce the goals of the oil and gas industry.

According to McCool, “interest groups are critical to the success of an iron triangle”

because “they form the organizational nucleus” of the policy structure (McCool 1994, 25). The

oil and gas industry, as the interest group in Alberta’s iron triangle, are unarguably the

organizational nucleus that McCool speaks of because their mission, goals, and strategies have

largely been adopted by both the Alberta government and the ERCB. As previously stated,

CAPP’s mission is to ensure the oil and gas industry’s economic sustainability which can be met

by a fiscal regime that strengthens the economic health of the oil and gas industry and a

regulatory body that works with industry to ensure the timeliness and efficiency of development.

The Alberta royalty regime reinforces CAPP’s goals of a fiscal regime that ensures their

economic growth and sustainability. The ERCB also reinforces CAPP’s goals of having a

regulatory body that allows for rapid development and that strives to allow them to operate at

low cost. The ERCB also demonstrates McCool’s theory that iron triangles contain bodies or

committees that lead the public to believe that issues they are concerned about are being looked

after, while in reality they are only meant to reinforce the goals of the triangle rather than address

the problem. They work in a system of agreement with one another, rather than maintaining a

system of checks and balances to guarantee accountability and responsibility as they are

supposed to.

Implications

26

The first underlying implication of an iron triangle in Alberta is that it prevents our

democracy from functioning in the manner that it is meant to. According to D. F. Thompson,

“democracy itself affirms that the citizens bound by laws should have a voice in making them”

(Thompson 2010, 18). He continues by stating that “democratic government is supposed to be

responsive”, responsive implying that it acts to address to the danger and risks citizens are

subject to (Thompson, 18-19). Considering the evaluation in this paper of the presence of an iron

triangle in public policy, the citizens of Alberta are clearly not welcome participatory members

in their democratic system and or encouraged to help shape the public policy that directly affects

them. If citizens are not included in the policy process, or not heard when their water has been

polluted by industry or when risks to their basic health are ignored, than it is clear that our

democratic system is not working as it should or in the way that citizens are lead to believe.

The key issue that D. F. Thompson discusses thoroughly is how democracy should also

work for future generations (Thompson, 2010). The iron triangle present in Alberta demonstrates

extreme presentism, which means a “bias in the laws in favor of present over future generations”

(Thompson, 17). Fracking demonstrates a clear example where present generations are the only

population being considered because the benefits are concentrated in the hands of a few

individuals which are living today. Although this paper has demonstrated that our democracy is

weak today, it also implies that it will only continue to weaken because our laws are built to

ignore and strip the rights of future generations. Future generations will have to bear the

cumulative effects of risky industrial activity, such as the impact on clean water. The current

policies concerning fracking, and the policy structure that make them, are shortsighted and lack

the institutional diversity to adapt and consider the myriad complications that are involved with

the issue.

27

Furthermore, it is not surprising that fracking is taking place at the risk and threat to

public health and the health of our environment because strong regulations and the guarantee of

public health are not a major concern, as demonstrated by the iron triangle’s collective focus on

the industry’s present growth and economic sustainability. The danger present here is that we

lack the institutional diversity to produce policies that protect us from risk. According to Klinke

and Renn, academics focussing on risk governance, institutional diversity is beneficial because it

can:

offer considerable advantages when complex, uncertain, and ambiguous risk problems need to be addressed because, first, risk problems with different scopes can be managed at different levels, second, an inherent degree of overlap and redundancy makes nonhierarchical adaptive and integrative risk governance systems more resilient and therefore less vulnerable, and third, the larger number of actors facilitates experimentation and learning (Klinke and Renn 2011, 274).

Not only are rigid policy structures, like those present in Alberta’s iron triangle, not reflective of

democracy because they are inherently authoritarian but they also put us at risk of vulnerability

generally. The presence of fracking is merely a reflection of overlap and redundancy within the

policy process because the three actors in the iron triangle reinforce and advance the same goals,

rather than bringing a diverse set of perspectives and knowledge. Considering the complexity of

the issue, an iron triangle does not have the ability to address all of the sub-issues associated with

fracking because it by definition is rigid and closed to actors with diverse experience and

knowledge.

As demonstrated, fracking is a complex and ambiguous policy problem. Complex

problems can be understood using complexity theory, which attempts to identify “systems or

processes that lack the order and stability required to produce universal rules about behaviour

and outcomes” (Cairney 2012, 347). Fracking can be seen as a complex policy problem for

28

multiple reasons. There are multiple stakeholders involved, which also include the actors who

make up Alberta’s iron triangle, the public whose water and land is being damaged, as well as

the scientists who have produced the information that I have used in this paper. Many

stakeholders involved have different values and world perspectives entirely, such as industry

viewing the world and environment in terms of profit and production which is contrasted with

landowners who see their land as the home of their families, their families’ past and future

histories, and communities more generally. There is the need to balance monetary and non-

monetary factors, meaning balancing the potential wealth fracking could generate and the

potential harm to environmental and human health which cannot be reduced to strictly economic

terms. There is also the added layer of known and unknown risks. There are examples of

immediate damage caused by fracking, such as the example of dead livestock, but the cumulative

damage the use of fracking could cause fifteen, twenty, or fifty years down the road is still

largely unknown. Furthermore, another point of analysis in understanding the complexity of

environmental problems is that human and non-human systems are interwoven and impact each

other, at which the theory of complex ecologism is presented. Cudworth and Hobden argue that

“rather than seeing a separation between the human and the non-human, complex ecologism sees

the human world as embedded within the natural world, with the variety of human social systems

intersecting with those of other natural systems” (Cudworth and Hobden 2011, 54). What is clear

is that how environmental issues are understood and how policy makers approach complex

problems, such as fracking, are not linear, clear, or static processes.

According to Thomas Homer-Dixon, a Canadian academic and author, our societies

generally are “becoming steadily more complex and often more rigid” (Homer-Dixon 2007, 6).

In the face of complex problems, like fracking, the present institutions are unable to adapt and

29

create solutions unless they “are comfortable with change, surprise, and the essential transience

of things” (Homer-Dixon, 282). Therefore, unless the policy structure in Alberta diversifies and

becomes more open to different perspectives and ideas, it will have the crippling inability to

adapt in the future if the cumulative effects of processes like fracking indeed have catastrophic

effects on our environment and health. The present shortsightedness of our institutions may not

only affect a few rural landowners, but could drastically and negatively alter the ways the entire

society operates.

Conclusion

This paper has discussed some of the risks associated with fracking, such as water

contamination, water use, leaking well casings, toxicity of frac fluid, and interwell

communication. It has answered how fracking continues to take place, at the risk of

environmental and human health, through the presence of a rigid policy structure that I have

identified as an iron triangle in Alberta. This iron triangle is composed of the oil and gas

industry, the Alberta government, and the ERCB. Through the discussion of CAPP, the Alberta

royalty regime, and the ERCB, it has been exemplified how the iron triangle in Alberta operates

and reinforces the power of the oil and gas industry in dictating public policy through a series of

mutually reinforcing goals and objects. Finally, this paper has identified how the existence of an

iron triangle the policy process undermines democracy, which also puts Albertans at risk when

faced with complex problems. The best approach for improving the responsiveness of our

institutions and strengthening our resiliency, in the face of dangerous industrial procedures such

as hydraulic fracturing, is increasing our institutional diversity in the policy process. Institutional

diversity is key to successful risk governance because it allows for diverse perspectives and

30

knowledge sets to permeate into the policy process, which in turn also allows a greater degree of

creativity, skill, and adaptability to be incorporated into our public policies.

31

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