Offshore oil a no-go for B.C. despite the value

Barbara Yaffe
Vancouver Sun
February 23, 2008

Early this month Ottawa invited bids from oil companies for further exploration of the environmentally sensitive Beaufort Sea in the Arctic.

And, of course, everyone knows development of Alberta's oilsands is going gangbusters. This, despite the fact environmental groups are sounding serious alarm bells about the devastation the project north of Edmonton is generating in terms of greenhouse gas emissions, use of valuable natural gas and water pollution.

Oddly, in the midst of all this activity, a calm has settled over British Columbia's coast, where even discussion about drilling has stopped.

Judging from this week's provincial budget, carbon is now the enemy in B.C. Which won't come as good news to those hoping for an offshore oil industry. "B.C. is under the only federally imposed provincewide ban on offshore oil and gas in Canada," laments John Hunter, of the Victoria-based Ocean Industries B.C. "We can't even look, let alone touch."

In the wake of the federal announcement on the Beaufort, Hunter is wondering why B.C. is being discriminated against.

Past estimates have put the B.C. bounty at some 10 billion barrels of oil in four subsea basins.

It was with that in mind, back in 2004, that B.C.'s Energy Minister Richard Neufeld boldly declared: "Our goal is to develop this rich B.C. resource by 2010."

The province optimistically intended to leapfrog over a web of jurisdictional and environmental problems and start pumping the crude in time for the Winter Olympics.

That's not the intention any longer, provincial spokesman Jake Jacobs acknowledges. Despite the fact that the price of oil has gone due north.

A B.C. energy ministry website vaguely states an intention to "work with the federal government, communities and first nations to advance offshore development in a scientifically sound and environmentally responsible way."

A B.C. Energy Plan, released a year ago, reported the province was still committed to an offshore oil industry. It noted an intention to uphold its longstanding request to Ottawa to lift its moratorium on offshore exploration, imposed in 1972.

A major roadblock for B.C., of course, is the federal government. Because the resource is undersea, the feds have a big say, whereas Alberta's oil is on land. On-land resource development is strictly a provincial concern, so Alberta does as it wishes.

Both the B.C. and Ottawa governments are pro-development. But the chance of the Harperites becoming involved in a debate about a West Coast offshore oil industry is as realistic as Neufeld's pledge to get the project off the ground by 2010.

With a minority government, Conservatives have nothing to gain politically by advancing the cause, given the messy complications that offshore development would inspire.

In the past, the feds have said they were studying lifting the moratorium. But this week, in response to an inquiry, Ottawa stated: "At this time, the government of Canada is not considering lifting the moratorium."

An offshore industry was far easier for Ottawa to encourage off the East Coast because Atlantic provinces were much hungrier for jobs and less doctrinaire about environmental issues.

Even if B.C. were undaunted by environmental opposition to a Pacific coast industry, the native people would contest ownership of the offshore resources.

For good measure, there would doubtless be a donnybrook about whether the federal or provincial government should collect a lion's share of resource royalties.

Resolution of the ownership issue alone would entail years of discussion. It can take decades to launch an offshore oil industry.

If B.C. were serious about development it would move to secure a mandate from voters in a provincial referendum. Then it would initiate ownership negotiations; no company would undertake a serious exploration program on disputed land.

But the Campbell government has done none of this. Instead it has been busy fostering an image of B.C. as the greenest province in the country. Few missed the fact that Finance Minister Carole Taylor wore green shoes on Tuesday to promote her budget.

It would appear the window of opportunity for an offshore oil industry in B.C. has come and gone.

byaffe@png.canwest.com