For now, Nova Gas Transmission continues to handle about 80%(4.5 Tcf in 1997, or 12.3 Bcf/d) of Canadian gas on its provincialgathering grid because Alberta remains both the biggest producerand center of growth in output. But expectations of serious growthin British Columbia showed clearly when the National Energy Boardvisited the province’s resource development frontier of Fort St.John for regional hearings on the Alliance Pipeline Project
Up to 500 MMcf/d of Alliance Pipeline’s 1.3 Bcf/d is expected tocome from near Fort St. John, BC. By B.C. standards, “this is big,big stuff,” Fort St. John Mayor Steve Thorlakson said in aninterview. “The next three to five years look very, very strong.”Even if Nova and TransCanada succeed in holding up Alliance duringthe regulatory marathon, there are signs increasing production willcome from B.C. Gas already crosses the provincial boundary intoAlberta, then into the established long-distance export pipelinesvia connections between Westcoast and Nova and via new links builtby rivals to Westcoast including Novagas Canada. The connectionsare steadily expanding. As a development frontier, B.C. is toAlberta as Alberta is to Texas. Just as Alberta has one well forevery 10 in Texas, B.C. is only one-tenth as explored as Alberta.
Industry spending in northern B.C. – which is almost entirelyfor gas because oil is scarcer than bears there – reached anestimated C$1.7 billion (US$1.24 billion) last year. This wintersaw 65 drilling rigs working in northern B.C. In 1997, industrydrilled 575 wells in northeastern B.C. or 25% more than in 1996 anda five-fold increase compared to the annual average for thepreceding five years. Among the western provinces, only B.C. had anincrease in the number of well licenses granted in January asenergy prices weakened. After setting a record of C$217 million(US$158 million) in 1997, provincial sales of oil and gas rightsstayed high at C$28 million (US$20 million) in January. That wasoff compared to the previous January’s C$33 million (US$24 million)but the 16% drop was less than the erosion of Canadian gas pricesover that time
Besides Alliance and geology, B.C.’s expansion as aninternational gas supplier is encouraged by a series of otherdevelopments. Costs were cut by a 1997 incentive rate settlementbetween Westcoast and its shippers, then by a rare exemption foraround-the-clock drilling rigs from overtime pay rules in afamously strict B.C. labor code. A recent landmark agreementbetween industry, native communities, conservationists and B.C.’sleft-leaning New Democratic Party government kept 75% of gas-richbut environmentally-contested foothills open for drilling
B.C. Premier Glen Clark, after talks with the CanadianAssociation of Petroleum Producers, has committed his cabinet tolook for ways to lighten B.C.’s notoriously heavy regulatory andtax burdens. And in the eyes of B.C.’s up-and-coming gas community,Nova and TransCanada practically guaranteed Alliance will be builtby declaring their intentions to merge the two major establishedCanadian pipeline systems. “The National Energy Board will makesure there’s competition out there,” predicted Brian Surerus, deanof pipeline construction contractors in northeastern B.C.
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