NEWS BULLETIN

June 11, 2001 --- Vol. 7, No. 67June 2001

Oil patch hopes to benefit from change of British Columbia government

British Columbia has traded its left-wing New Democratic Party government for a pro-business Liberal Party administration in one of the most resounding victories in Canadian political history.

After 10 years of NDP scandals and bungling, the voters awarded the Liberals 77 of the 79 legislative seats and, within 24 hours of being sworn in last week, Premier Gordon Campbell slashed the personal income tax rate by 25 percent to the lowest level in Canada.

Business leaders are now counting on the government to do the same for them by lowering corporate taxes and reducing the regulatory burden by one-third within three years.

But Campbell and newly appointed Energy Minister Richard Neufeld have been vague about what the oil and gas industry can expect despite their hopes of creating an investment boom and reviving the ailing forestry and mining sectors.

Neufeld said the government has had no reason to draw attention to the robust state of the oil patch, which generated C$650 million in government royalties and license sales last year.

"When you have a forest industry that's totally on its knees you're going to hear more about that," he said.

Even so, he said, the Liberals' tax-cutting and regulation-streamlining measures will help oil and gas companies reap higher profits, although corporate tax cuts will have to await a more detail review of the province's finances.

Pierre Alvarez, president of the Canadian Association of Petroleum Producers, met with Campbell and Neufeld during the campaign to lobby for tax and regulatory changes.

"We've been clear about our priorities in terms of reducing the cost of doing business in B.C.," he said.

In addition to taxes, the industry is pressing for fast access to exploration land and clarification of aboriginal disputes that have hindered development in northern British Columbia.

Also on the table is a moratorium on exploration of the shallow waters off British Columbia's northern coast at the southern tip of the Alaska panhandle.

The 25-year ban was extended after the Exxon Valdez spill in 1989 and an NDP document in 1999 estimated it would take five to 10 years to complete studies and hearings before any drilling could occur.

Campbell said he will look at a review currently under way and assess the economic benefits and environmental risks of offshore exploration.

The Geological Survey of Canada has estimated reserves in the region at 43 trillion cubic feet of gas and 10 billion barrels of oil, with the potential for 490 trillion cubic feet of gas and 19 billion barrels of oil.

Neufeld said he supports development, but cautioned that a lengthy public consultation and study process is essential, given environmental concerns and unresolved aboriginal land claims.

He said the "quickest way to stop any drilling on the North Coast" would be for Campbell to say "We're going to drill."

Members named to Joint Committee on Natural Gas Pipelines

Members of the Joint Committee on Natural Gas Pipelines, established by the Legislature in May, were named June 7 and 8 by Senate President Rick Halford and Speaker of the House Brian Porter.

Appointees from the Senate are: Senators John Torgerson, R-Kasilof, Rick Halford, R-Chugiak, Pete Kelly, R-Fairbanks, and Johnny Ellis, D-Anchorage. Sen. Donald Olson, D-Nome, was selected as an alternate member.

Appointees from the House are: Representatives Joe Green, R-Anchorage, Brian Porter, R-Anchorage, Scott Ogan, R-Palmer, and John Davies, D-Fairbanks. Representatives Mike Chenault, R-Nikiski, Hugh Fate, R-Fairbanks, and Reggie Joule, D-Kotzebue, were selected as alternate members.

Sen. Torgerson was selected to chair the committee and Rep. Green was chosen as the vice-chair.

The committee will hold hearings and hire consultants and experts as needed.

"We do not have the luxury of waiting until next January to resume our study of project proposals and how we can facilitate them, so this committee was established to continue working over the interim between legislative sessions," Torgerson said.


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