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Oil wells will dot the horizon if the dreams of the North Coast Oil and Gas Task Force are fulfilled. *




A Crude Attempt

The North Coast Oil and Gas Task Force is traveling around the north lobbying to smooth the way for the lifting of the moratorium on oil and gas exploration. In this story writer Ian Lordon has discovered that there is a big difference between what they are saying and what the real picture is.

by Ian Lordon

SideBar: Monitoring the regulators who regulate the monitors who monitor the regulators.


Bill Belsey has done this a few times before.

The vice-chair of the North Coast Oil and Gas Task Force is speaking to a handful of business people about the potential for a new kind of industry in the northwest. Today, it's at the Tlell River House and his audience is the QCI Chamber of Commerce. Earlier, it was the Old Massett Village Council office and the audience was the village council. Tomorrow - another day, another council...

Belsey is on the islands for three days. He's lobbying local politicians, business people, property owners, and anyone else who will listen to support the Task Force's bid to lift the moratorium on oil and gas exploration on the west coast. He's paying for the whole trip out of his own pocket, and tonight he's spreading his good-news message to the Chamber members:

There's gold in them thar abyssal hills! Black gold that is.

In just one year of existence the Task Force has infected a number of communities with gold-fever in this, the latest rush to hit the northwest. So far Prince Rupert, Port Edward, Kitimat, Terrace, Stewart, and Port Clements have all thrown support behind the Task Force and its goal of killing the moratorium.

The enthusiastic response isn't surprising - after all, Belsey makes a compelling case.

First come the numbers.

Belsey tells the Chamber there are nearly three billion barrels of oil and twenty trillion cubic metres of gas begging to be pumped out of Hecate Strait, Dixon Entrance, and Queen Charlotte Sound. If the numbers are on the money, it's a deposit three times the size of Hibernia in Newfoundland. But now, and Belsey says this with widening eyes and a confiding grin, recent rumour has it the deposit may be as much as ten billion barrels of oil.

Then the benefits. Belsey predicts airlines, hotels, transport companies, helicopters, and tug operators ­ just for starters ­ will immediately see new business. The huge assortment of contracts and spinoffs brought on by the oil rush will unleash fat wads of cash rolling through the northwest.

Next are the arguments.

Belsey says spills are uncommon, they don't do as much damage as we originally thought, the technology for preventing them is improved, and the industry is strictly regulated. Bad weather is no big deal, they can drill in summer. Earthquakes? Belsey has heard the Geological Survey of Canada recently downgraded the risk of quakes in the area. Won't the companies just be taking it all away? No, the government will see to it communities get what's coming to them.

Last are the political hurdles. Belsey assures his listeners the federal Minister of Natural Resources, Ralph Goodale, is on record having said he would happily lift the moratorium if BC were only to request it. Although Dan Miller hasn't publicly endorsed offshore exploration, he has sent the Task Force a letter saying the province is in favour of striking a committee to investigate lifting the ban. Miller even requested the Task Force make recommendations regarding structure and candidates for it. There are some aboriginal concerns but they can be addressed with an attractive (perhaps even revenue-sharing?) agreement.

It's a sunny portrait of a new economy for the northwest and it's attractive now that fishing and forestry are failing us. But is it accurate? Well, not exactly. But first, a little history...

In 1972 the Canadian government made an intelligent, visionary decision. Remarkably, for once it did not seem to be influenced by any interest in making money. But seventeen years later, on the verge of reversing that same decision, the government was presented with a dramatic example of why it was made in the first place.

In 1972 the federal government banned oil tanker traffic and offshore exploration from Hecate Strait, Dixon Entrance, and Queen Charlotte Sound. The government was reacting to the new trans-Alaska pipeline about to begin delivering thousands of barrels of oil to the port of Valdez, Alaska. The new pipeline had the potential to open a flood of tanker traffic up and down BC's coast, and the perceived threat of an oil spill posed by that traffic was enough to precipitate the moratorium.

The moratorium had two immediate effects. First, it forced every north- and south-bound tanker 100 miles off-shore. Second, it hailed an end to exploration efforts in the Hecate, Dixon, and Queen Charlotte Sound.

Forcing tanker traffic out into the open Pacific may well have spared Haida Gwaii and the BC coast the sort of calamity Prince William Sound endured when the now-infamous Exxon Valdez ran aground the night of March 23, 1989. One of the most significant oil-spills ever recorded, the Exxon Valdez dumped well over 200,000 barrels of crude in the water. The huge slick washed on-shore like a black tide, leaving oil-soaked fish, whales, birds, and habitat suffocating in its wake.

The images of destruction broadcast around the world from the site of the spill were disturbing enough to dispel any thought of allowing offshore oil exploration and drilling to resume in BC after a 20-year reprieve.

But it very nearly did.

Charlie Stewart was manager of communications for Chevron Canada throughout the 1980's and he retains the post today.

Chevron owns leases to the lion's share of offshore drilling rights in Hecate Strait and Queen Charlotte Sound, acquired from Shell Canada in 1971. Shell had abandoned exploration in the area after a small series of test-wells in the late sixties produced less than encouraging results. Chevron had a mind to pursue the program further, but any plans were quashed when the moratorium was imposed a year later.

"Nothing happened until the early eighties," Stewart said, "when the federal government approached Chevron and Shell and asked how to go about lifting the moratorium."

Interest in lifting the moratorium was kindled by a 1983 Geological Survey of Canada (GSC) report claiming deposits in the order of 300-million barrels of oil and 3-trillion cubic feet of natural gas were lurking beneath the waters surrounding Haida Gwaii.

Hard on the heels of the GSC report, a Memorandum of Agreement between the provincial and federal governments was signed committing the two parties to publicly review the potential effects of lifting the moratorium.

The review took shape in June 1984 when the five-member West Coast Offshore Exploration Environmental Assessment Panel was appointed with a mandate to examine the effects of renewed exploration and present recommendations 'under which offshore petroleum exploration could proceed in a safe and environmentally responsible manner.'

Stewart spearheaded Chevron's participation in the review, spending much of the next two years answering questions, providing information, attending meetings and public hearings. When all was said and done in April 1986, the panel released a report containing 82 recommendations it felt needed to be addressed before exploration could resume in the area.

"We could live with all 82 of those recommendations," Stewart recalled. But before Chevron could hit the waves the report had to wind its way through a long line of bureaucratic approvals. And then, "just as they were going to lift the moratorium, the Exxon Valdez hit the rocks."

The moratorium was never lifted. Which is why oil rigs don't grace the horizon at Jungle Beach. Why there are no pipelines along the bottom of Queen Charlotte Sound, no tankers steaming through the Hecate, and no anchors to tangle the gear of fishermen. It is also why we have never had to worry about Burnaby Narrows looking like Prince William Sound in the spring of 1989.

It is also why Bill Belsey was on-island speaking to the QCI Chamber of Commerce at the Tlell River House in April 1998. Only there were a few details missing from Belsey's presentation.

First the numbers.

The three billion barrels of oil and twenty trillion cubic metres of gas is from a Geological Survey of Canada report released in March 1995. North Coast MLA Dan Miller told the Victoria legislature in late April that the GSC has recently suggested there could be as much as ten billion barrels of oil and forty trillion cubic metres of gas.

What no-one, apart from Sue Kopel-man and the Prince Rupert Environmental Society, is saying is that these estimates are all based on the results from little more than a dozen holes drilled during the sixties. There is no new data but the estimated deposit just keeps on growing. Maybe by next year there will be 50 billion trillion barrels of oil and 7.8 zillion trillion billion cubic metres of gas waiting to be pumped out of the Hecate.

Then there are the benefits. Hotels, helicopters, airlines, tugboats, and transportation companies are not going to single-handedly turn around the economy in the northwest (But most of these businesses are represented on the Task Force).

Oil rigs are staffed by trained employees with specific skills. Skills unemployed loggers and fishermen do not possess. The jobs generated by oil exploration or drilling will not go to locals. Certainly not in the short term, and in the long term only if training facilities are made accessible to them. The price of gas will not go down in Prince Rupert or Masset, and the oil will be hauled away, by tanker, to provide jobs at refineries a long way from Port Clements.

Topping off the benefits, an offshore oil patch actually stands to damage the local tourist industry. After all, what are tourists boating south to Hotspring going to say of the view as they sail past Louise Island? It's clearcuts onshore, and oil rigs offshore. An unforgettable wilderness experience they'll be sure to share with their friends.

Next there are the arguments.

Oil spills are common. Globally, and only counting tankers, there is on average a spill of more than 20,000 barrels every month, and every year a spill the size of the Exxon Valdez. Technological improvements have reduced the risk of blowouts on offshore rigs, but they continue to happen.

To date, Belsey says the Task Force has failed to find one major oil company interested in drilling the Hecate Basin or Queen Charlotte Sound. Only minor companies have indicated interest and unfortunately the occurrence of blowouts tends to increase dramatically among smaller operators who cut corners and can't afford new technologies. The largest recorded oil spill in history was a blowout from a rig off the coast of Mexico in the late seventies. It released more than 7.5-million barrels of oil into the water before it was eventually contained.

Then the earthquakes. Belsey erroneously claims the Geological Survey of Canada has downgraded the risk of earthquakes in the area.

"I don't see how we could have done that," Dr. Robert Horner, a GSC researcher responded. "There is a greater risk of earthquakes there than anywhere else in the country." Not to mention the Queen Charlotte Fault was the site of the most severe earthquake ever recorded in Canada. Magnitude 8.1 on the Richter scale, 1949. "It's analogous to the San Andreas Fault in California," Dr. Horner concluded.

Finally, the politics.

Belsey claims federal Minister of Natural Resources, Ralph Goodale, will endorse any provincial move to lift the ban. However, Mr. Goodale's staff was quick to deny that claim, first stating and later confirming that the Minister has not taken any position on the issue at all.

As for North Coast MLA Dan Miller, recent remarks in the legislature indicate he is interested in pursuing the matter further but he remains firmly non-committal. After all there are a lot of ifs about this:

"If there is a desire, if the resource is there, if we think we can do it in a safe manner, how do we move this forward? I do believe that there has to be broad public acceptance that this is something that's desirable for British Columbians. Clearly we are interested in economic opportunity in British Columbia. If it proves that this has that potential, then I'd like to keep this thing moving forward."

But with stumpage revenues going the way of lumber prices, clearly the provincial government is interested in finding a new royalty cash cow. Mr. Miller's letter to the Task Force does not constitute the endorsement of offshore exploration Belsey may believe it is. And although it does ask for suggestions, the letter does not assign the Task Force with the job of structuring and selecting a committee to investigate lifting the ban - yet.

Here is Mr. Miller's letter to the Task Force in its entirety:

"Thank you for the good wishes in your letter received February 24, 1998. As you indicated, bringing stability and prosperity to the North is my greatest wish.

As for lifting the moratorium, the idea will be brought forward in a number of fora over the next few months. In the meantime, I would appreciate hearing from the North Coast Oil and Gas Task Force regarding your recommendations for a full consultation process, led by yourselves or another party, including funds required. While I cannot promise any funding at this time, your ideas on how public consultation should be carried out in the region would be most helpful."

Even with government, aboriginal, and public approval, in the end it will be Chevron and Petro-Canada, owners of close to ninety percent of the drilling rights in the area, who will decide if offshore oil will become a major industry on the west coast. Petro-Canada declined to participate in the panel review during the eighties, and seems content to sit out this time around as well. Petro-Can representatives say these days the company has its hands full on the east coast, while at Chevron...

"We haven't really been asked our opinion on lifting the moratorium," Charlie Stewart said. "Sure we're interested. But we're not going to be pursuing this without some signal from government. We're not masochists."

Which begs the question, are the members of the North Coast Oil and Gas Task Force?

* composite photo by InHouse/SRs

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