Offshore Oil and Gas Provincial Context UBCM Offshore

Offshore Oil and Gas Provincial Context UBCM Offshore Working Group February 17, 2006 Jean Dragushan Offshore Oil and Gas Division Ministry of Energy, Mines and Petroleum Resources 1

BC’s Offshore Basins Ministry of Energy, Mines and Petroleum Resources 2

BC’s Offshore Oil and Gas - History • 1960’s: Initial exploration • 1980’s: Federal-Provincial Review • 2001 -2002: Technology Review/Scientific Panel – – no fatal flaw issues that would rule out development no inadequacy of science or technology applied in context of regulatory framework • 2003: BC Offshore Team established • 2005: ‘Offshore Team’ now a ‘Division’ in Ministry of Energy, Mines and Petroleum Resources 3

Offshore Oil and Gas Arguments Against • Potential negative environmental impacts • Unresolved aboriginal rights/title • Gaps in scientific knowledge • Use alternative energy Ministry of Energy, Mines and Petroleum Resources 4

Offshore Oil and Gas Arguments For • Future Supply and Demand - Forecasts show clear need for hydrocarbons + clean energy • Hydrocarbons will remain primary energy for some time to come • Funding to support vital services – at 2005 prices resource value of Queen Charlotte Basin alone is Can$225 billion • Jobs and business opportunities Ministry of Energy, Mines and Petroleum Resources 5

Federal Review of Moratorium on Queen Charlotte Basin Three Parts: • Science • Public Review • First Nations Engagement Ministry of Energy, Mines and Petroleum Resources 6

Federal Review Science Review • “Provided an adequate regulatory regime is in place, there are no science gaps that need to be filled before lifting the moratorium” • “The Present restriction on tanker traffic entering the coastal zone should be maintained” Ministry of Energy, Mines and Petroleum Resources 7

Federal Review • Public Review (Priddle Panel) – 4 Options for next steps • First Nations Engagement – Concern about environmental impacts, interest in benefits Ministry of Energy, Mines and Petroleum Resources 8

BC’s Approach: Communities & First Nations • Consider views of coastal residents in determining how to develop offshore oil/gas • UBCM Offshore Working Group offers opportunity for discussion of key issues: – benefits (provincial and local); regulatory regime; environmental assessment • Meet obligations regarding First Nations rights and interests – role for First Nations in management and share in benefits Ministry of Energy, Mines and Petroleum Resources 9

One Company’s Assessment Technical Economic Commercial Organization al Political/societ al Prospectively highly uncertain, technology exists, environmental must be addressed (appears doable) Costs and economics uncertain Market outlook very favourable Industry capability exists, limited current capacity for West Coast Offshore Jurisdiction, fiscal, regulatory framework are undefined, meaningful First Nations engagement required…mixed stakeholder messages Ministry of Energy, Mines and Petroleum Resources 10

The Future • New Federal Government – Potential for Decision on Moratorium? • Next Steps Ministry of Energy, Mines and Petroleum Resources 11