Nova Gas Transmission continues to handle about 80% (4.5 Tcf in1997, or 12.3 Bcf/d) of Canadian gas on its provincial gatheringgrid because Alberta remains both the biggest producer and centerof growth in output. But expectations of serious growth in BritishColumbia showed clearly when the National Energy Board visited theprovince’s resource development frontier of Fort St. John forregional 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 BC 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 BC 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, BC is toAlberta as Alberta is to Texas. Just as Alberta has one well forevery 10 in Texas, BC is only one-tenth as explored as Alberta.

Industry spending in northern BC — which is almost entirely forgas because oil is scarcer than bears there — reached an estimatedC$1.7 billion (US$1.24 billion) last year. This winter saw 65drilling rigs working in northern BC In 1997, industry drilled 575wells in northeastern BC or 25% more than in 1996 and a five-foldincrease compared to the annual average for the preceding fiveyears. Among the western provinces, only BC had an increase in thenumber of well licenses granted in January as energy pricesweakened. After setting a record of C$217 million (US$158 million)in 1997, provincial sales of oil and gas rights stayed high at C$28million (US$20 million) in January. That was off compared to theprevious January’s C$33 million (US$24 million) but the 16% dropwas less than the erosion of Canadian gas prices over that time.

Besides Alliance and geology, BC’s expansion as an internationalgas supplier is encouraged by a series of other developments. Costswere cut by a 1997 incentive rate settlement between Westcoast andits shippers, then by a rare exemption for around-the-clockdrilling rigs from overtime pay rules in a famously strict BC laborcode. A recent landmark agreement between industry, nativecommunities, conservationists and BC’s left-leaning New DemocraticParty government kept 75% of gas-rich but environmentally-contestedfoothills open for drilling.

BC Premier Glen Clark, after talks with the Canadian Associationof Petroleum Producers, has committed his cabinet to look for waysto lighten BC’s notoriously heavy regulatory and tax burdens. Andin the eyes of BC’s up-and-coming gas community, Nova andTransCanada practically guaranteed Alliance will be built bydeclaring 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 BC.

Gordon Jaremko, Calgary

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