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BC Plans Review of Coastal Drilling

BC Plans Review of Coastal Drilling

A target of May 1 has been set to complete a review, and a poll suggests the majority is receptive to change, but gas hunters still face an uphill effort to remove a moratorium from a highly-rated exploration target offshore of Canada's West Coast.

The British Columbia government set the date for a report by a provincial consultation panel on a review of B.C.'s ban against drilling in the Queen Charlotte Islands region. At the same time, industry got some encouragement from a poll commissioned by the B.C. Business Summit, an alliance of 52 business organizations and professional associations with membership rosters representing 95% of private sector employment in the province.

A preliminary review has already been conducted by a consultant, to establish procedures for reconsidering the moratorium that ensure all sides are taken into account. It is well accepted that any change is bound to arouse potent political and legal opposition from native and environmental groups that inspired the moratorium in the first place. The plan has been to craft the review so well that any decisions can withstand procedural challenges.

The poll by Ipsos Reid, a widely-used specialty house in Canada, found that 77% of British Columbians agree with the statement, "Unless we make major change to how we do things in B.C. our best days will be behind us." Four-fifths believe B.C. could be the strongest economy in Canada based on its natural resources. The poll follows forecasts by Canadian bank economists that oil and gas-driven Alberta, despite a smaller population and much less attractive climate, will soon overtake B.C. as the third most productive of Canada's 10 provinces after Ontario and Quebec. The findings also follow long slumps in B.C.'s mainstays of forest products, mining and real estate, with gas development in the northeastern corner of the province standing out as the lone bright growth spot.

The conflicting signal, indicating that it will still be a struggle to lift the moratorium, came from B.C.'s left-leaning New Democratic Party government. In the provincial capital of Victoria, Premier Ujjal Dosanjh issued a statement that "our oil and gas moratorium will not be revisited until science is able to address the dangers from earthquakes and potential spills to safeguard our coastal waters." But Dosanjh may not be in a position to make that stick too much longer. He has yet to prove he has staying power in office. He became premier by winning the NDP leadership after his predecessor, Glen Clark, was forced to resign over a scandal involving the granting of a gambling licence to an associate. Charges have been laid. Dosanjh did not call an election and will be forced by Canadian law to hold one within a year or two.

Drilling along B.C.'s coastline dates back to 1913. The moratorium was imposed in 1959 as a result of opposition in the fishing and environmental communities. The ban was lifted in 1966 but reinstated in 1972 as a result of renewed concerns stoked by tanker traffic between Alaska and the lower 48 United States. A 1986 review panel recommended ending the moratorium, but the 1989 Exxon Valdez spill intervened and the ban was extended indefinitely.

The early exploration, plus 14 wells done during the 1966-72 open season, generated results that continue to tantalize the Canadian industry. In a 1995 report, the Geological Survey of Canada estimated the region has 20 Tcf of gas and 2.7 billion barrels of oil. Subsequent estimates, using revised calculating methods, have as much as doubled the projected resource endowment. Shell Canada, Chevron Canada, Petro-Canada and ExxonMobil Canada continue to hold about three million acres of long-term drilling leases in the area. The companies say they continue to be interested in exploration if they are given a chance, although adding there will be no activity until there is a clear indication that the area will be opened up. In 1997, they made a striking show of good faith by donating the 320,000 most scenic and sensitive acres of their prospects to the Gwaii Haanas National Marine Conservation Area, a "transition zone" between deep waters and an island national park.

Gordon Jaremko, Calgary

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