Moving right along on the road to increased Canadian productionand exports, the provincial government in British Columbia hastaken the first step toward removing regulatory roadblocks bycreating a single agency to deal with the oil and gas industry andlocating it in producer territory. The B.C. government alsoanounced it has made peace with native communities on behalf of theindustry.

Access to B.C. is a key ingredient of the Canadian gascommunity’s growth strategy. Alliance Pipeline Project’s proposedroute to Chicago originates in northeastern B.C. The 1.3-Bcf/dexport route is expected to set off aggressive drilling there if,as widely expected, it receives approval from the National EnergyBoard before Christmas.

Even without Alliance, B.C. is a hot drilling target whereexploratory wells into virgin reserves have yielded productiontests exceeding 80 MMcf/d. Multiple, overlapping jurisdictions,delays in obtaining government approvals and poor communicationsamong the bureaucracy, gas producers and native communities havelong been major industry grievances in B.C.

The new British Columbia Oil and Gas Commission has a mandate tosort out the mess and will have its headquarters in Fort St. John,the capital of industry activity along the northern Rocky Mountainfoothills. To head up the agency as commissioner, the provinceappointed a veteran civil servant, politician and specialist innative affairs, David Porter. He has a long list of credentials ininitiating and implementing northern Canadian resource developmentagreements, including gas pipeline projects in environmentallysensitive regions where Indians are the dominant population group.

B.C. Energy Minister Dan Miller described Porter’s role as”bringing the various interests in the province to a common table”to foster “a healthy and open environment” for the oil and gasindustry. The new commission’s C$8 million (US$5.7 million) annualbudget will come entirely from user fees and production levies onthe industry. Miller said creation of the commission, as one ofnumerous changes covered by agreements with Canadian producers,will contribute to a “three-year economic strategy to cut taxes,cut red tape and stimulate investment.” B.C., in tandem withindustry leaders, forecasts up to C$25 billion (US$17.5 billion) ininvestment will double the province’s gas production over the next10 years.

The B.C. government also reached new agreements with Indiancommunities on improving the investment climate. MOUs or memorandaof understanding with three of the area’s six Indian nations-FortNelson, West Moberly and Halfway River-acknowledge treaty rightsand provide funds to cover costs of consultation with companiesplanning to drill on traditional territories. Besides an end toantagonism that has spilled over into court cases, gas producersexpect to gain greater predictability of costs, schedules andoperational requirements. West Moberly Chief George Desjarlaiscalled the pacts a “new approach to a hundred-year old issue.”

Gordon Jaremko, Calgary

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