In the next two weeks, the British Columbia government is expected to unveil a plan that could lift the moratorium on exploration and development offshore. Up to 22 million acres, located in an environmentally sensitive area near Queen Charlotte Islands, have been closed to producers for years, but with a currently depressed economy, the stakes are growing. The offshore region is estimated to hold up to 25.9 Tcf and 9.8 Bbbl — about three times the reserves in the Hibernia field now being drilled off Newfoundland. More important, however, the reserves would eventually translate into about C$21 billion in provincial royalties.

To lift the moratorium may be tricky. The newly elected Liberal government, which has indicated it favors lifting the ban, will have to persuade its residents to ignore the environmental data presented about the region in the past decade. However, with the fishing and forestry industries in decline and tourism also suffering, lifting the moratorium could come at the right time.

Following the release of a report and recommendations earlier this month by Northern Development Commissioner John Backhouse, the “Backhouse Report,” as it is known, is causing a stir among stakeholders who want to either lift or continue the drilling moratorium. BC Energy Minister Richard Neufeld said the newly elected government wants to move even faster than the Backhouse Report, which calls for public hearings this fall and a decision on ending the moratorium by March 2002.

Backhouse’s team, which began its work under the previous New Democratic government, was given a mandate to develop a process to move the discussion forward, and it does not implicitly favor one position or another. However, it calls for a long process to ensure involvement of every stakeholder in the far northwestern and coastal regions of British Columbia.

“When you look at the two sides, you’ve got the economic situation and a great deal of interest in reviving the economy…, but there’s also a great deal of concern about the environment,” Backhouse told the BC Report. “This issue is too big and too emotional to go into without the necessary background information.” However, Neufeld thinks delaying a decision on lifting the moratorium until next March may take too long.

Neufeld wants the issue moved forward “in an expedited fashion,” and the Liberal government, with support from producers and other stakeholders, has already indicated it would drop the ban if drilling could be done in an environmentally responsible way.

Although politics are obviously involved in the process, the Canadian government, British Columbia officials and aboriginal communities all will weigh in on making a final decision, and the Backhouse Report is expected to be a blueprint for any process moving forward. Backhouse’s report recommends that there be about 15 meetings in BC’s northwestern and coastal communities.

While Neufeld agrees that public hearings should be held, he said the substantive issues still have to be answered, which can only be done with input from the experts. Meanwhile, the Canadian Association of Petroleum Producers, eager to access the offshore reserves, said it would not become involved until a moratorium is lifted. Petro-Canada and Shell Canada still hold exploration rights to parts of the banned area, and also are likely to be involved in the process.

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