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Cabinet ministers lock horns on B.C. offshore Anderson dismisses Dhaliwal’s hopes of a decision by early 2004 on removing a federal moratorium; meanwhile, B.C. Energy and Mines Minister Richard Neufeld says B.C. ready to strike out on its own Gary Park Petroleum News Correspondent
They both come from British Columbia and they’re both cabinet ministers in the Canadian government, but they might as well be from different planets when it comes to opening up the province’s offshore to oil and natural gas exploration.
Natural Resources Minister Herb Dhaliwal and Environment Minister David Anderson appear destined for a head-on collision over the future of a federal moratorium on drilling what could be a petroleum-rich region.
Dhaliwal, in announcing the start of a review of scientific data and a public consultation process, said March 28 his government would be in a position to make an “informed decision” by early 2004.
Anderson scoffed at that notion during an environmental conference in Vancouver on April 2. He bluntly suggested Dhaliwal’s timetable is too ambitious, and the decision might be taken by “future politicians.” He said he has no idea how long it will take to complete the latest round of studies, but argued the estimated cost of about C$100 million should be paid by the private sector.
Lifting ban will face resistance Vancouver Island consultant Brian Peckford, who played a key role as Newfoundland premier in setting up his province‚s offshore regime, warned in an interview with the Financial Post last month that British Columbia has a battle on its hands to get the ban removed.
“It will be very difficult for the feds to give this a fair shake,” he said. “Any proposal relating to the oceans in Canada automatically triggers this very extensive, complicated review.”
But Peckford said advances in offshore drilling technology that have enabled development of Canada’s East Coast to occur in an environmentally safe way should be applicable to the B.C. coast as well.
Tired of squabbling and slow progress in the federal government, B.C. Energy and Mines Minister Richard Neufeld said the province may break ranks with the Canadian government and open one of its four offshore basins to oil and natural gas exploration. He said April 1 that opening up the Georgia Basin between Vancouver and the lower portion of Vancouver Island is “always an option” if the federal government drags its feet on lifting a 1971 drilling moratorium.
Canada rates offshore potential Preliminary estimates by the Geological Survey of Canada rate the potential of the Georgia basin at 6.5 trillion cubic feet of natural gas. The Queen Charlotte basin is assigned a potential of 9.8 billion barrels of oil and 25.9 tcf of gas, while the Winona and Tofino basins have a combined 9.4 tcf of gas.
Georgia comes under exclusive provincial jurisdiction, according to a 1984 Supreme Court of Canada ruling, while control of the other three is shared by the federal and provincial governments.
Neufeld said he is holding Dhaliwal to a pledge last summer that the federal government would make a decision on the Queen Charlotte moratorium before the end of 2003.
Federal projections challenged While the political haggling continues, fresh doubt is being cast over the actual potential of the offshore.
The Canadian Gas Potential Committee, an independent, voluntary group of scientists who periodically update Canada’s existing and potential hydrocarbon prospects, has challenged the Geological Survey of Canada’s numbers that assume there is a 100 percent certainty of finding gas and apply no risk.
The gas potential committee noted in a 2001 report that West Coast offshore basins contain only conceptual plays that have yet to yield discoveries.
In fact, Shell Canada Ltd. — one of the three leaseholders in the Queen Charlotte basin — drilled 18 dry holes more than 30 years ago, prompting people such as Scott Trollope, Shell's chief geologist and frontier manager, to caution that even if exploration proceeds and discoveries are made it could take at least 12 years to bring the gas on stream.
The gas potential committee has rated the gas in place for the four basins at less than 14 tcf, including 7.5 tcf for the Queen Charlotte Basin. By applying average results from the Western Canada Sedimentary Basin, that number shrinks even further, to 8.4 tcf — a far cry from the estimate touted by the British Columbia government.
Toss in the complex geology of the region and the costs of drilling at about C$50 million per well and there is strong support for the National Energy Board’s forecast that production is unlikely before 2017.
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